Nfld. & Labrador

Should businesses be compensated for lost revenue due to construction work?

A new report says nearly half of small businesses in Canada have been negatively affected by municipal construction projects at some point in the last five years.

CFIB says towns, cities should better work with small businesses to mitigate impact

When roads are closed and traffic is disrupted, businesses can be negatively affected, and a national business group says they should be compensated. (Colin Butler/CBC News)

A new report from the Canadian Federation of Independent Business suggests more needs to be done to mitigate the loss of revenue some businesses experience during municipal construction.

According to the report, nearly half of small businesses in Canada have been negatively affected by construction projects at some point in the last five years, which result in lost sales and — in extreme cases — the need to move or close up shop.

Vaughn Hammond is the director of provincial affairs for the Canadian Federation of Independent Business in Newfoundland and Labrador. (CBC file photo)

"It might even be as minor as having a culvert replaced outside their business. That's a day or two of revenue they're not going to get back, though they won't necessarily complain about it," said Vaughn Hammond, the federation's director of provincial affairs in Newfoundland and Labrador.

"If a customer can't get to a business or avail of a service, then that's obviously revenue lost to a small business owner that they can't recover later."

Call for funding

The CFIB is calling for some sort of financial compensation from all three levels of government for small business owners who lose revenue from construction.

That could take the form of a government tax rebate, or some sort of fund set up to help entrepreneurs when customers can't properly access their business during road or infrastructure work, Hammond told CBC's Central Morning.

The CFIB released this infographic to show some of the statistics around the cost of road work on small businesses in Canada. (CFIB)

With many Canadian municipalities dealing with aging infrastructure, Hammond said upgrades are going to become much more frequent, so the time is right to address the impact on businesses.

"What we have to recognize is that construction can have an effect on a small business, and it can have such an effect that it goes to the point where a small business owner might not even be able to continue and make a go of it."

Better co-ordination

In addition to special funding, Hammond said the CFIB is also calling for better collaboration between municipalities and businesses, so the risk to their bottom line can be minimized.

He said in light of the report, the group is asking business owners to not hesitate when it comes to voicing their concerns to local town councils, and is also asking councils to work more closely with businesses.

"That could include planning, co-ordination, better communication," he said,

"What it comes down to is a better relationship between the municipalities and small business owners."

With files from Central Morning