Self-sustainability becomes essential for rural businesses as inflation hits

Giulio Piccioli has been struggling to get supplies for his Italian restaurant, Gather, in Queen Charlotte on Haida Gwaii, B.C.

Battered by rising costs and high freight prices, Piccioli had to pay more than 10 times as much as usual for shipping costs, up from $25 to $300, to bring products to the plate. 

Piccioli’s restaurant team focuses on using local food, food coming from the forest, the ocean, and the land. While they are trying to include as much fresh produce as possible, certain products have to be imported from the mainland, such as vegetables. Piccioli had stable and good relationships with several small-scale suppliers who are proud of their products but are unfortunately getting squeezed by the delivery company.

“There are a couple of suppliers that I have stopped using, who we had a good relationship with, because all of a sudden, their costs just kind of shot up through the roof,” said Piccioli.

Located off the northwest coast of British Columbia, about 60 kilometres away from the mainland, Queen Charlotte City, whose council recently voted to change the name to Daajing Giids, has a population of 852.

Shipments have to come in either by plane or ferry. Freight prices have always been an obstacle in Haida Gwaii; however, the high inflation for goods and the increased cost of delivery have put Haida Gwaii and other remote areas under a lot of uncertainty about the viability of their business model.  

The situation of businesses in Queen Charlotte is not unusual.

Rural businesses are having a harder time during the pandemic, according to a recent report released by Statistics Canada. About 49.4 per cent of rural businesses expected the rising cost of production to be an obstacle in the first quarter of 2022. In addition, 50.5 per cent of rural businesses were expecting difficulty getting supplies from within Canada.

 There are three kinds of short-term obstacles that rural businesses frequently mention — difficulty acquiring inputs, products or supplies domestically (36.7 per cent), cost of insurance (35.7 per cent), and recruiting skilled employees (35.5 per cent).

That problem of getting supplies is something that one printing store owner Steve Ramsbottom has also experienced.

“For printing purposes, it’s difficult sometimes to get products like brochures and newsletters,” said Ramsbottom, the owner of Haida Gwaii Design & Signs. “I’ve lost a couple of orders because of it. We have to source elsewhere because we could not get stock.”

Ramsbottom’s problems are experienced by many business owners on the island.  

“Just everything we sell, we see the prices are increasing,” said Alanah Mountifield, the associate manager at AMS Ace Building Centre, which sells home repair and innovation goods. 

Brent Clancy, the president of Cowichan Lake Chamber of Commerce, who works with hundreds of clients on the province’s many islands, said that wage inflation is a primary driver for increasing cost of production.

“Wages have gone up over 50 per cent since I started the business in 2014,” Clancy said. “That creates a cyclical inflationary environment, as costs go up, wages go up, and then inflation rises, and then they have to increase wages more.”

Staffing shortages are also part of the issue.

“There are fewer labourers in the market as the baby boomers are retiring earlier due to COVID,” said Clancy. “There are a huge amount of people leaving the workforce, the skilled labourers, and there’s just not enough people to come in and fill the role. And that creates more inflation as employers have to offer more money to retain people.”

Clancy has seen how inflation has hit restaurants and local businesses hard.

“A lot of our members that I’ve talked to that run restaurants said their oil for deep fryers has gone up over 100 per cent,” said Clancy. “Basically,  they haven’t seen anything that hasn’t increased by 30 to 50 per cent, so all their input costs are just skyrocketing, which makes businesses very difficult.”

One organization, Haida Gwaii Community Futures, is finding ways to support the economy of Haida Gwaii by providing advice, resources, and financing to local businesses. The organization is coming up with new ways to combat these inflationary prices by creating a more self-sufficient supply chain. 

“Starting to grow our own foods will help combat the price of freighting goods to the island,” said Michael Racz, general manager of Haida Gwaii Community Futures. “Many programs and workshops have been created on the island to help people learn to grow, process and preserve local foods. The more we can take care of our own food supply chain the better as it is a necessary commodity.”