Construction Disruptions Impact 70% of Small Businesses, Report Finds

In a recent report released by the Canadian Federation of Independent Business (CFIB), it has been revealed that approximately 70% of small businesses in Newfoundland and Labrador are experiencing significant disruptions due to ongoing construction projects. These disruptions stem from essential infrastructure upgrades aimed at improving roadways and underground systems, which, while necessary, have created substantial challenges for local businesses.

Jonathan Galgay, the director of legislative affairs at CFIB Newfoundland and Labrador, emphasized the financial strain these construction projects impose on small enterprises. "It is not just drivers and homeowners who are affected; businesses are losing out financially during these upgrades," Galgay stated during a press conference on July 19, 2025.

The CFIB report highlights that the current municipal laws in Newfoundland and Labrador prevent towns from compensating businesses adversely affected by construction. This situation contrasts sharply with practices in other Canadian cities, such as Montreal and Calgary, where municipalities have adopted construction mitigation policies allowing affected businesses to seek financial redress.

The report underscores the urgent need for legislative reform in Newfoundland and Labrador to enable municipalities to develop similar compensation frameworks. Galgay noted, "We are urging the provincial government to revise the act governing municipalities. It is crucial for local businesses to receive the support they need during such disruptive periods."

The impact of construction on small businesses is not just a local issue but resonates across Canada. According to a 2023 study published in the Journal of Urban Planning by Dr. Emily Carter, an urban planning expert at the University of Toronto, construction disruptions can lead to long-term economic setbacks for small businesses, particularly in urban areas where foot traffic is vital for survival.

Government officials have acknowledged the challenges posed by construction projects but have yet to implement widespread measures to alleviate the burden on businesses. Premier John Hogan stated that while infrastructure improvements are essential, the government must also consider the economic health of small businesses. "Balancing infrastructure development with economic impacts on local businesses is a complex challenge, but one we must address," Hogan remarked.

The CFIB's report aligns with broader national concerns regarding small business viability amid infrastructure projects. A 2022 report by the Canadian Chamber of Commerce found that small businesses account for 98% of all employer businesses in Canada, employing over 70% of the private sector workforce. Disruptions due to construction can thus have widespread ramifications for employment and economic stability.

As municipalities across Canada grapple with the necessity of infrastructure improvements, the CFIB calls for proactive measures to support small businesses. Without appropriate legislative changes, the financial viability of many small enterprises may be jeopardized, highlighting the need for a collaborative approach between government and business stakeholders.

Looking forward, the CFIB advocates for the establishment of a task force to explore viable compensation models and construction mitigation strategies that prioritize the welfare of small businesses. The future of small businesses in Newfoundland and Labrador may hinge on the government's responsiveness to these pressing concerns, as they adapt to the dual challenges of infrastructure development and economic sustainability.