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

Small businesses across Atlantic Canada are grappling with the severe impact of escalating fuel costs, with more than half contemplating permanent closure this year. Research from a small business insurance company reveals that rising fuel prices are the primary driver behind these considerations.

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Fuel really is the lifeblood of our business.

A recent poll found that a striking 75 percent of small businesses in the Maritimes report that increasing gas prices have negatively affected their operations. This figure is considerably higher than the national average of 58 percent.

For companies like NovaXpress, a trucking and courier service, fuel is an essential and unavoidable expense. "Fuel really is the lifeblood of our business," stated Pieter de Man, operations manager at NovaXpress. He explained that even a small increase in fuel prices has a massive impact on their bottom line.

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We used to quote our prices as an all-in price to our clients. 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 noted that these increased costs have largely been passed 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." Depending on the service, fuel charges can range from 37 to 88 percent, meaning a $1,000 quote could result in an additional $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 added.

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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.

Despite these challenges, a growing tourism sector in Nova Scotia offers a potential boost. Sarah Reeves, director of communications at Discover Halifax, highlighted that Halifax remains an affordable destination compared to other Canadian urban centers. Many tourists, often traveling by car from other Maritime provinces, plan their trips in advance and factor in costs. For businesses like NovaXpress, margins are currently "razor thin," but de Man remains committed to providing services to keep the economy moving.

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Affordability is on the minds of a lot of Canadians, but Halifax remains a very affordable destination compared to other urban centres in Canada.