Canadian internal trade red tape a burden on half of SMEs

by MM&D Online Staff

MISSISSAUGA, Ontario—According to a UPS Canada survey, 48 per cent of small and medium-sized enterprises believe cross-provincial trade restrictions and red tape inhibit their business growth. Despite the hurdles, 73 per cent conducted business with customers or partners in other provinces. Recent discussions to modernize Canada’s internal trade would further enable the remaining quarter of SMEs not currently doing business in other provinces to do so in the next five years.

The UPS Canada Small Business Challenges survey is the second of two parts. Along with general business performance challenges, the first part examined e-commerce trends and supply chain management.

“We continue to see growth within our country’s borders, fueled by market opportunity and customer demand,” says Paul Gaspar, director of small business, UPS Canada. “Our recent expansion in western Canada is a bellwether of the business growth in the region. Making interprovincial and international trade less cumbersome would be a significant benefit to our customers and small business in general. Our global network and reputation for reliability helps businesses leverage trade opportunities as they grow within their borders and expand beyond their comfort zone.”

In fact, a UPS Leger survey from earlier this year showed more than four in five Canadian businesses see global trade as a key competitive advantage for Canada. Approximately 84 per cent believe trade diversification beyond North America is necessary.

Small business owners indicate 2014 has been a good year with 20 per cent exceeding annual targets and just over half are meeting their goals. Success was attributed to a new product, service or innovation at 42 per cent, with almost one-quarter claiming expansion into other provinces.

Furthermore, in UPS research earlier this year overall businesses were more likely to exceed their growth benchmarks with a supply chain strategy in place (24.6%), rather than without (16.3%).

UPS customer PÜR Gum sells their innovative aspartame-free product across Canada and around the world. “We’re eager to sell our product to distributors around the world,” says Jay Klein, CEO and founder of PÜR Gum. “Working with a partner to improve our supply chain helped us expand our reach and consequently realize the need for greater capacity. Just recently we moved into a new warehouse which is approximately 25 times larger in size. We knew that a supply chain strategy was necessary for our growth and having the right partner has made all the difference.”

Other important findings from the UPS Canada Small Business Challenges survey include:
—  Among businesses failing to meet their targets, staffing costs/costs of
business inputs is the top factor listed as a restriction to growth
—  50 per cent of businesses claim that a lack of talent and skills is
having a negative impact on their business including the following:
—  Skilled trades people (34%
—  Marketing (31%)
—  Digital and mobile expertise (29%)
—  Sales (28%)

“Four out of 10 businesses that do not have a supply chain strategy believe their business is not large enough to warrant one,” adds Paul Gaspar. “Of those who do have a supply chain strategy, 90 per cent agree that it assists growth and helps them stay ahead of the competition. You are never too small to have a supply chain strategy. With the right partners, businesses can shift the momentum of their growth exponentially whether to export inter-provincially or internationally.”

This survey was completed on-line between August 11 to August 22, 2014 using Leger’s online panel, LegerWeb, with a sample of 302. Individuals working for, or running, a business that currently spends a minimum of $5,000 annually on shipping were interviewed. Only those at a director or senior manager level or above qualified. A probability sample of the same size would yield a margin of error of +/- 5.7%, 19 times out of 20.