B.C. small business sales have taken the hardest hit of any region in Canada this quarter. New data shows the province is struggling with weak demand, even as its businesses continue to get paid quickly. Here’s a closer look at why this is happening and what it means for local owners.

B.C. Leads the Country in Sales Decline

According to Xero’s small business insights (XSBI) report, B.C. recorded the sharpest small business sales decline among all tracked regions. These included Alberta, the Maritimes, and Ontario. The numbers paint a clear picture of a province falling behind the national trend.

Year-over-year, B.C. business sales fell by 1.7 per cent. In comparison, the national decline was just 0.6 per cent. Ontario’s drop was even smaller, sitting at only 0.3 per cent. Meanwhile, some regions actually grew.

Alberta and the Maritimes both saw sales growth during the same period. Alberta’s sales climbed by one per cent, while the Maritimes posted a smaller gain of 0.2 per cent. This makes B.C.’s decline stand out even more sharply.

There is, however, a silver lining for the province. B.C. businesses were paid faster than any other region tracked in the report. On average, it took just 25.7 days for them to receive payment.

By contrast, Alberta’s average payment time was 28.4 days. Ontario businesses waited 30 days on average, and the Maritimes lagged behind at 31.8 days. Fast payments are helping, but they aren’t solving the bigger problem.

A spokesperson for Xero explained the situation clearly in an email to Daily Hive. “B.C. is the outlier this quarter. It had the weakest sales of any region tracked, but its businesses get paid faster than anyone else’s. For B.C. owners, the problem is demand rather than collections,” they said.

That distinction matters. It shows the issue isn’t about businesses chasing unpaid invoices. Instead, customers simply aren’t spending as much. This shifts the focus toward external economic pressures rather than internal business practices.

Gas Prices Are Squeezing Businesses From Both Sides

Xero attributed the lower sales largely to a recent surge in gas prices. These prices have remained elevated since the start of the U.S.-Iran war. As a result, small businesses are feeling the pressure in more than one way.

“Ongoing higher-than-usual gasoline prices continue to introduce headwinds for small businesses, who can find themselves squeezed from both sides should high prices remain,” the report noted. This squeeze affects both operations and customer spending simultaneously.

Rising fuel costs directly impact how small businesses operate day to day. Delivery costs increase. Transportation expenses climb. For any business that relies on moving goods or people, higher gas prices quickly eat into margins.

At the same time, consumers are also affected by the same rising costs. When people spend more at the pump, they have less disposable income left over. Consequently, they cut back on discretionary purchases at local shops and restaurants.

This creates a difficult cycle for small business owners. Costs go up on one end, while customer spending drops on the other. Together, these forces explain much of the pressure behind B.C.’s sales decline.

Merchant Growth, a financial services company, identified a similar pattern earlier this year. The firm found that B.C. businesses were already struggling with high fuel prices, as well as tariff-related impacts weighing on their operations.

David Gens, the founder and CEO of Merchant Growth, spoke with Daily Hive about these pressures. He explained that rising oil prices affect the entire supply chain. Restaurants and retailers face higher shipping costs, while contractors and tradespeople pay more at the pump simply doing their jobs.

How Does B.C. Compare Nationally?

Zooming out, the national picture also shows signs of strain. Canadian businesses overall are making fewer sales than they did a year ago. Still, the country as a whole is performing better than B.C. specifically.

Xero noted that the 0.6 per cent national decline represents something more significant. It marks the “third consecutive quarter of sales being lower than a year ago, with payment times also remaining elevated,” according to the report.

This trend suggests the challenges facing small businesses aren’t isolated or temporary. Instead, they reflect a longer pattern of softening demand across the country. Furthermore, slower payment times nationally point to broader financial strain among consumers and businesses alike.

Ashalee Mohamed, Xero’s country manager for Canada, offered additional context on the situation. She said that businesses across the country are “navigating ongoing cost pressures and cautious consumer spending.” Her comment underscores just how widespread these challenges have become.

Overall, B.C.’s experience appears to be an intensified version of a national trend. While every region is dealing with cost pressures, B.C. is clearly feeling them the most. As gas prices remain elevated, small business owners in the province may continue facing a tough road ahead.