Restrictions to curb the spread of COVID-19 vary across Canada and many small businesses have lost business as a result. Some have closed and now, a new survey has found that one in six small business owners are seriously thinking about shutting for good. That could put more than 2.4 million jobs at risk, estimates the Canadian Federation of Independent Business (CFIB).
A different survey conducted in 2020 found that small and medium-sized businesses were already concerned they might not survive a second wave of the pandemic. The Canadian government’s statistics agency reported that 58,000 businesses had already become inactive in the year ending in September 2020.
CFIB’s recent survey of over 4,000 of its members found that another 181,000 could close. If they did, it could affect about 20 per cent of Canada’s jobs in the private sector.
The hardest hit sectors are hospitality including restaurants, hotels, caterers. and the arts. The recreation sector has suffered as gyms, venues and arcades have been ordered closed in many parts of the country.
Many restaurants have been closed to diners and not all have been able to successfully transition to take-out business only. (iStock)
Second wave, tougher restrictions hurt
During Canada’s second wave many jurisdictions have imposed increased restrictions, many of which directly affect small businesses.
The latest data suggest that in 2021, only 47 per cent of businesses are fully open. Than is down from 62 per cent at the end of November 2020.
Only 36 per cent are fully staffed compared to 41 per cent in in November and 22 per cent are making normal sales, down from 29 per cent.
“It goes without saying that supporting local is more important than ever,” said Laura Jones, CFIB’s executive vice-president. “Governments can also help small businesses replace subsidies with sales by introducing safe pathways for them to reopen to limited customers. There’s a lot at stake now from jobs, to tax revenue to support for local soccer teams. Let’s make 2021 the year we help small business survive and then get back to thriving.”
Some relief has come
The federal government as well as sub-national governments have provided loans and grants to provide some relief. For example, the city of Montreal has just announced that small and medium-sized businesses can apply for loans of $50,000 in addition to $100,000 that was offered in 2020. They may apply for a four-month moratorium on capital and interest. Businesses that have been shut by public health order may have up to 80 per cent of the 2021 funding be converted to a grant.
While there have been several relief packages offered, some have been implemented slowly and slow uptake suggests they may have had requirements that were difficult for business owners to meet.
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