Thank you very much, and thank you for the invitation and the opportunity to present. You often hear it said in the NWT that the way to start a small business in the north is to start a big one and wait a couple of years. The statement perhaps unintentionally reflects the reality of the many barriers to business development in the NWT.
For discussion purposes, I've separated the barriers into two broad categories. The first one I'll discuss is the barriers that are experienced directly by businesses and communities when they attempt to develop, and the second is the barriers that are often faced by development organizations that try to provide assistance to those organizations.
First we'll start with the businesses in the communities. The obvious one, the elephant in the room, is that the cost of doing business is higher in the NWT than in southern Canada, not only direct costs such as materials and labour, but you also have to consider freight, transportation, heat, and power, which is a big one. We always hear about trying to make power rates similar across the NWT, but it's never happened, so it's a big disadvantage. Of course, increased costs can mean that businesses lose the ability to compete.The problems are not only evident when we compare the NWT as a whole to southern Canada, but even when you're comparing smaller communities or disadvantaged communities to larger, more populous communities.
One possible solution--and I assume this is the way you want me to present, barriers and solutions--is we just thought that you could possibly provide some kind of incentive, tax break, or subsidy to small business in the north, similar to those that are provided to individuals in northern areas, such as the northern living allowance that all government employees receive, or the northern residents tax reduction that's offered to all northern residents. That's in the short run. In the long run, of course, we can always ask you to continue to work with local and territorial governments in attempting to reduce the costs of operating businesses and living in the NWT.
Second is education. Many areas in the NWT still suffer from low levels of education. Many small and medium-sized enterprises lack the skills and capacity to take advantage of even small-scale opportunities, and often require intensive one-on-one assistance. One possible solution is to aid the business development organizations that are out there by providing funding, or more staffing somehow, so that we can improve the staff-to-client ratios, build better relationships, and try to bring that education to them.
They also need more training specific to the start-up and operation of business. There could possibly be a workshop series introduced, and if those types of things already exist, perhaps some medium to make businesses more aware of the training opportunities that do exist. Just in the last couple of years, the NWT has been linked up with Alberta, and we have access to video conference facilities now that provide some of that kind of material, so it doesn't always have to be in person.
Of course, we can always ask that entrepreneurs be made aware of the ramifications of not starting their business on the right foot. They always end up in trouble, especially with CRA, five years down the road.
Another one that was noted was the educational funding provided to employees of organizations and to tradespeople for upgrading and skills development, and that kind of stuff. Small businesses that have owner-operators who actually do the work, not just hire employees to do the work, are often not eligible for that type of funding and can't take advantage of the funds that are set aside to go to upgrade their services or perhaps get some specific training in a new area so they can broaden their service. Because of that, it's tough for them to compete, particularly against southern companies that might try to come in and tap markets once or twice a year and leave town with piles of cash in their pockets. The suggestion we had there was that perhaps changes could be made to existing training funds and programs to allow business owners to access them. We're probably all aware of the changes that were recently made to the EI program to allow self-employed people to now pay into EI and take maternity benefits, so why not broaden it a little more and allow small business owners to access training?
The final one under education is that many people in the NWT are not aware of the challenges and benefits of being self-employed, nor do they know anything about what it takes to be in business or how to get there. Perhaps educational efforts could be focused on senior high school and college students, and the schools could be asked if they wish to take advantage of a structured program to teach their students more about business. Perhaps business becomes not mandatory but a mandatory elective that schools have to at least offer to students and give them the chance to learn a bit more about business.
That covers off most of education.
Next is labour. If you'd been in Yellowknife maybe two to three years ago, this one would be plainly evident. New and existing businesses require a larger and better qualified workforce. Significant shortages of capable employees not only prevent new businesses from starting and existing businesses from expanding, but also make it very expensive and difficult for existing companies to maintain their current operations. I know restaurants here in Yellowknife, for sure, and Alberta too, were experiencing staffing shortages and had to cut back hours, increase wages, and hire younger and younger people to work in their businesses, and it made it tough to maintain staff.