CFIB report: Construction work disrupts two-thirds of small Ontario businesses

Key Takeaways:

• Over two-thirds of Ontario small businesses have been disrupted by local construction projects in the past five years, with 23% reporting major impacts.
• These disruptions have led to an average revenue loss of 25% during the most significant projects and additional costs of around $10,000 for cleaning and repairs.
• The top issues faced by these businesses include traffic congestion, dust, noise, difficulties in customer and staff access, logistical disruptions, and decreased sales, all of which contribute to significant stress for business owners.
• The CFIB is advocating for government compensation for businesses severely impacted by public construction projects.

The Whole Story:

According to new analysis by the Canadian Federation of Independent Business (CFIB) over two-thirds (67%) of Ontario small businesses have experienced disruptions due to local construction projects in the past five years, and 69% have been affected by multiple projects during the same period.

The report, titled Hard hats and hard times: Public construction impacts on small businesses, found that of small- and medium-sized enterprises in Ontario that were affected, 23% (or 104,362) report that construction disruptions have had a major impact on their business. On average, Ontario small firms have been forced to endure 481 days of construction-related disruptions, which represents 26% of the time over the past five years.  

“Infrastructure needs continue to increase with our growing population and aging infrastructure,” said Julie Kwiecinski, CFIB’s director of provincial affairs for Ontario. “Everyone – including small business owners – loves a finished project, but small firms have to survive to the project’s end before they can benefit.”

“Small businesses face a myriad of issues when local construction projects take place, from traffic congestion and dust and debris, to losing customers and navigating logistical disruptions,” said Emily Boston, CFIB senior policy analyst and an author of CFIB’s report. “A large portion of construction costs can be avoided with better planning and execution, and by giving more consideration to the realities of local businesses.”  

Ontario small firms lost on average 25% of their revenues during the most significant construction project affecting them over the past five years, and on top of that, spent around $10,000 in extra expenses such as cleaning and repairs. 

While each construction project is unique in its duration, scale and disruptiveness, the top construction impacts affecting Ontario small businesses are traffic congestion, dust, debris or noise (61%), customers and staff having trouble accessing their business or finding parking (52%), delivery and logistics disruptions (49%), sales decreases (42%), and business owners suffering significant stress (25%).  

Over two-thirds (69%) of Ontario small businesses say they should be compensated by government when a public construction project has a major impact on their business operations. CFIB urges governments to establish comprehensive construction mitigation plans with compensation to offset costs for impacted businesses, improved planning and communication strategies, and clarified roles for all levels of government involved.  

“In Ontario, we’re asking the province to create a clear legal path for municipalities to provide direct funding or property tax holidays to small businesses for revenue losses caused by major municipally-funded construction projects,” said Kwiecinski. “At the same time, the Ontario government should introduce a small business construction mitigation fund for provincially-funded and controlled construction, like Metrolinx transit projects.”