Fuel costs main driver of profit losses for small businesses in Atlantic Canada

More than half of the Maritimes’ small businesses say they have considered closing permanently this year, according to research from a small business insurance company.

That consideration has been largely driven by rising fuel costs , Mariano Neiman, chief operating officer at Zensurance, said.

According to a recent poll, 75 per cent of small businesses in the Maritimes say rising gas prices have negatively impacted their business, well above the national average of 58 per cent.

“Fuel really is the lifeblood of our business,” Pieter de Man, operations manager at NovaXpress, a trucking and courier company, told Global News.

“A marginal increase in fuel has a massive impact on our overall bottom line.”

He said much of that fuel cost has had to be downloaded on to customers.

“We used to quote our prices as an all-in price to our clients,” he said. “We can no longer do that in a manageable way. We need to be completely transparent on the fuel cost for reference sake.”

De Man said there is anywhere from a 37 to 88 per cent fuel charge depending on the request. He said for a $1,000 quote, that would mean the customer would be looking at a $370 to $880 fuel charge.

“We’re looking upwards of nearly double our fuel cost and that’s even with our bulk fuel pricing that we have as a business,” he said. “We need to unfortunately pass that fuel cost onwards to our clients.”

But de Man said what many customers of all businesses don’t realize is the logistics behind the scenes that drive up the products of goods.

“Going into the grocery stores as a consumer myself, I see the price increase day after day and a lot of that is driven by the logistics cost and the center of that logistics cost is the cost of fuel,” he said.

But while some businesses have been hit particularly hard, a continued growth in tourism in Nova Scotia could help bring in more customers.

“Affordability is on the minds of a lot of Canadians, but Halifax remains a very affordable destination compared to other urban centres in Canada,” Sarah Reeves, director of communications at Discover Halifax, told Global News.

Reeves said many tourists visiting Nova Scotia come from other Maritime provinces. While she said most of them travel by car, this has not stopped record-breaking tourism numbers this year.