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It’s getting cramped in downtown St. John’s, and you can feel the irritation. “We’ve been looking for suitable class A space for about two years now,” complains one partner of a major professional services firm that, like many in this booming oil and gas town, has outgrown its office. “To date, we’ve come up empty handed.”

It’s an unusual situation to be in at the tail end of a recession. Elsewhere in Canada, there is a glut of office space as manufacturing and export-dependent industries turned out the lights and went home. Nationwide, the average office vacancy rate jumped from 7.5 per cent to 10.5 per cent in the last year, according to recent figures from real estate company CB Richard Ellis. Downtown Calgary was the worst hit, with vacancies at 15.2 per cent. Rents have plummeted accordingly.

In contrast, Atlantic Canada’s office rental market has weathered the recession well. A greater proportion of relatively secure government and service sector jobs have kept the market dull but dependable, with little of the jumpiness seen out West. “Most tenants are opting to renew in place. There hasn’t been a lot of moving around,” says CBRE’s Paul Moore. “Some tenants are getting larger. Some have shrunk. (But) if there is growth they are trying to do it on site. It’s the least cost solution.” There have been a few high profile departures, notably of financial service firms from Nova Scotia and call centres from New Brunswick. Even so, Halifax and Fredericton, as well as St. John’s, all have vacancy rates in their central business districts below the five per cent that brokers deem “functionally full.” Space exists, but is fragmented across so many locations as to be impractical for large offices. Other cities like Moncton and Saint John have rates closer to the national average but theirs did not change dramatically during the recession.

While rental costs have been climbing in most places in Atlantic Canada, they still remain well below those in the rest of Canada. Asking net rental rates in Saint John and Moncton hover around $12.00 per square foot, and $14 in Halifax. In comparison, a square foot can fetch $18.10 in Toronto; up to $24.80 in Vancouver. And while the recent rate rise has caused uneasiness among some tenants seeking to renew their licenses, a study by Turner Drake and Associates shows that rates in Halifax, at least, are still 50 per cent below 1989 levels.

Increases in St. John’s, however, have been more dramatic. Jerry Kirkland, senior partner with real estate appraiser ARA Kirkland, Balsom and Associates, estimates that tenants are seeing rates go between three and six dollars per square foot. But, he says, that has to be seen against the context of Newfoundland’s exceptional growth. “Until our offshore oil started maturing, the small firms had it pretty good. The reality is they are going to have to pay more… but they are able to because they are doing better.”

If they can find space, that is. The downside to tight rental markets is the congestion, and this has business communities across the region alarmed. Hopes for relief were dashed in St. John’s this March when construction firm Fortis withdrew a proposal for a 15-storey downtown tower. The decision was made after a bitter public battle with city council over aesthetics that still has many upset. “If there is no space for people to move here, or hire here, perhaps they (businesses) will go to Calgary or Halifax or Houston,” says Jo Mark Zurel, vice-Chair of the St. John’s Board of Trade. “Our sense is that if there is no space … that slows development and slows progress.”

Creating new downtown space has been fraught with difficulties in Halifax too. Armour Group’s 85,500 square foot Waterside Centre was narrowly approved last year after an initial rejection by council. A 14-storey office tower and adjoining hotel in front of the historic Citadel has been the subject of four separate studies so far without a final decision. The media has widely reported business leaders decrying the slow pace of growth, but some wonder how viable those projects really are.

Though you might admire her nerve, experts counsel a softer, safer approach to protecting your investment. “Don’t be a hero,” says Christine James of the Retail Council of Canada. Her organization has put together an exhaustive list of low- to no-cost recommendations retailers can use to protect themselves. Identifying potential robbers is key. Arrange aisles and displays to leave an unhindered view to the back of the shop and provide adequate lighting outside (studies have found teenagers are less likely to loiter in lighting which makes them look pale and unattractive.) Pay close attention to how people act; shoppers will look at merchandise, shoplifters at you. And if you have doubts about someone? “Go overboard on customer service,” says James. Make eye contact – shoplifters hate to feel noticed. And remember the colour of their shoes. A thief on the lam may change their coat, but is unlikely to change their footwear.

Not all theft is caused by shifty looking strangers. For some businesses, especially in the food sector, employee theft can dwarf external threats. “Assume the worst about people,” says Peter Mombourquette, a business professor at Mount Saint Vincent University. He says owners should be “emphatic” about conducting background checks for new hires, enforcing workplace rules such as not bringing bags to work, and installing video cameras to watch over employees as well as patrons. While that’s easier said than done in the compact, family atmosphere of a small business, he warns that some people, especially in small towns where businesses are fewer, don’t understand the effects of ripping off their boss. “They see thousands coming in every day and think, ‘this guy is rich.’ They have no idea how small the (profit) margins can be.”

Video cameras may be the ultimate in high-tech protection, but don’t take them for granted. Brian Palmeter of the Halifax police says you have to make sure you get them placed correctly, preferably with the help of an expert. “You wouldn’t believe how many tapes we get here where you just see the top of some guy’s head!”

It’s Thursday night, and customers stream through Lee Rabahani’s tiny Halifax corner store for smokes and lottery tickets. Rabahani regales them with one-liners, questions about their health and their families, gentle ribbing. He knows most of them by name, and they leave grinning.

But when the shop empties briefly, he drops his voice and he’s no longer smiling. He loses so much to shoplifting he can’t keep track, he says. There was a time when he was broken into twice a week. “One time, this guy came in with a shotgun. He was shaking. He was all nervous and telling me to hand over the money. I thought, is this a joke?” The ex-Lebanese Army soldier pushed him, and when the shotgun came up to face level, he realized it wasn’t. The thief got away with $4,000.

After that incident, Rabahani dropped $20,000 on a state-of-the-art security system. Sixteen video cameras watch over his three tiny aisles. A console sits on the counter next to the till, able to recall any customer who might have stirred Rabahani’s suspicions during the day. Has it paid for itself yet? “I’ve got a family,” he shrugs. “It keeps me safe.”

A recent survey by Halifax-based think tank GPI Atlantic found that crime in Nova Scotia (there are no similar studies for the rest of Atlantic Canada) costs the province $1.5-billion a year, or 4.4 per cent of GDP, and much of that is borne by business. Thirty-seven-million is spent on alarms and surveillance systems; $66-million on private security guards; $205-million in business shrink (the unexplained disappearance of stock from shelves). And there are other, less tangible, costs to the economy. Lost production due to absenteeism following a criminal attack costs businesses $6.3-million; lost production due to murder, $16-million. Those losses have continued to mount, in spite of a slight dip in crime rates over the past decade. The GPI report speculates this is partly due to higher hospitalization costs, as well as higher insurance rates, which have failed to drop in the same period.

The past decade has been an anomaly: the long term trend shows that crime rates have actually risen dramatically in the past 40 years, and Ronald Colman, one of the report’s authors, says that has come at a cost. “If crime rates were still at their 1962 levels,” says Colman, “Nova Scotians could have saved about $850-million this year on extra spending on police, prisons, courts, lawyers, security guards, burglar alarms and a lot of other crime costs.”

As if they didn’t have enough to worry about, businesses are being increasingly targeted by sophisticated gangs with wide reaching networks and the technical know-how to steal credit card numbers from point-of-sale PIN pads and over the phone. According to the Retail Council of Canada, retailers across the country lost $500-million to credit and debit card fraud in 2006 alone. Tougher laws in the U.S. have led American gangs to re-establish in Canada and Christine James of the Retail Council of Canada fears Maritimers are particularly vulnerable. “We’re so friendly and warm and… definitely not suspicious and I think Atlantic Canadian retailers need to be aware that it may not be the person in their community who is robbing them.” In fact, a 2006 report by the Criminal Intelligence Service Canada shows Atlantic Canada has an estimated 17 street gangs, more per capita than Quebec or British Columbia, although considerably less than the country’s gang capital of Ontario.

Obviously, Atlantic Canada is no longer the country’s tranquil hinterland. In three of the four Atlantic provinces (PEI is the exception), violent crime rates now surpass the national average. Nowhere is this more evident than Halifax, which has seen a spate of murders and drive-by shootings in the last few years. Maclean’s magazine ranks Halifax as the country’s eighth most violent city.

While police say the crime is drug related, and law-abiding citizens have nothing to fear, the violence has an indirect effect on business. “It seems like everyday you’re reading about someone getting stabbed or robbed and I think that scares people away,” says Gordon Stewart, executive director of the Restaurant Association of Nova Scotia. He says bars and restaurants in downtown Halifax have been hurt hard by the negative publicity. How hard? “It’s up there with the recession.”