Many Quebec SMEs say they have to raise their prices in the face of inflation

The Canadian Federation of Independent Business conducted a study on the impact of inflation on SMEs in Quebec. (File photo)

A high proportion of Quebec SMEs say they still have to raise their prices in order to fight inflation, reveals a new study by the Canadian Federation of x27;independent company (CFIB).

The survey published on Monday compares the results collected last January with those obtained during the same period in 2022.

It reports that nearly two-thirds of the leaders polled last month say suffer the negative effects of inflation, up four percentage points compared to the previous year.

To face the inflationary context, 73% of x27;among them say they have to raise their prices, a proportion similar to 2022.

However, this survey shows that more Quebec SMEs are now using other measures to deal with inflation than last year.

For example, owners say they have to work more hours to reduce labor costs (59% in 2023, compared to 52% in 2022) or temporarily reduce the profit margin in order to stay competitive (43% in 2023, 38% in 2022).

These measures would be adopted more in companies with fewer than five employees, according to the CFIB study. These SMEs are also less inclined to raise their prices.

Also, according to the study, about a third of managers mention having to reduce their investments and their growth forecasts, while this proportion rose to 29% in 2022.

“Our data is clear: the situation is worse than last year. It is true that the peak of inflation seems behind us. However, current levels are much higher than what we have experienced.

— François Vincent, vice-president for Quebec at the CFIB

Mr. Vincent is worried about seeing SMEs weaken due to rising costs.

The CFIB is also calling on Quebec so that it supports SMEs by limiting the increase in government costs and reducing taxation.