Canada Not Immune

(This article first appeared in the Calgary Beacon)

I have to admit to being a news junkie. And just like any junkie it is hard to stop your drug of choice.

On Monday August 8 even I almost overdosed on news. Between the US government having it s credit rating downgraded and the Dow Jones crashing (yes, I know they are connected) it was quite the day.

As a business consultant, and small businessman, I am always surprised just how little Canadians, and especially small business people, pay attention to the news. They seem to think that somehow we are safely cocooned in Canada and safe from the economic storms waging around us.

With over 70 percent of our foreign trade locked in with the US we should be paying more attention than usual right now. As I write this the predictions are the stock markets will continue their decline, wiping out the gains made over the past year. On Monday alone the US market lost over $1 trillion dollars in value. Oil continues to fall and gold continues to rise.

If you, as a small business person, are asking so what does that have to do with me, let me help out.

First, most Canadian small business serves big business. Those big businesses do a lot of trade with the US. If the big boys slow down small business screeches to a halt. This is even truer in Alberta where so much of the economy is tied to how oil companies are doing. Remember, oil prices are falling and that means less profit for oil companies which means less money for expansion and...less work for small business.

Small business suffers in other ways. I was in Waterton National Park last weekend. It is hardly a scientific poll but business owners told me that business was down because American tourists aren’t coming like they used to. Why aren’t they travelling? Because they are uncertain of their jobs and hoarding cash.). Who hurts the most? Small business.

Yes, most Canadians are happy and employed. However, if the US economy does not right itself, and soon, that could all change. Small business will survive – but that is just not enough.

So, start paying attention to what is going on south of the border. Their problems could be here sooner than we think.

Norman Leach is a business consultant, University lecturer and writer who lives in Calgary. His company is focussed on developing strategic, integrated knowledge for his clients.