Vancouver, January 21, 2021 – One in six (181,000) Canadian small business owners are seriously contemplating permanently closing, putting more than 2.4 million jobs at risk (20 per cent of private sector jobs), estimates the Canadian Federation of Independent Business (CFIB) in an update to its earlier estimate on business closures this past summer. This latest estimate is on top of the 58,000 businesses that became inactive in 2020. In total, one in five businesses are at risk of permanent closure by the end of the pandemic.
“Although there is still time for business owners to reverse course if conditions improve, it is alarming to see an increasing number considering permanent closure, compared to our first estimate last summer. We are not headed in the right direction and each week that passes without improvement on the business front pushes more owners to make that final decision. The more businesses that disappear, the more jobs we will lose and the harder it will be for the economy to recover,” said Simon Gaudreault, Senior Director of National Research at CFIB.
The number of threatened businesses could be as low as 71,000 or as high as 222,000 (between 7 and 21 per cent of all businesses) depending on how the coming months unfold, jeopardizing between 962,000 and 2,951,000 jobs. Businesses in the hospitality (restaurants, hotels, caterers) and arts and recreation (gyms, venues, arcades) sectors are most at risk, with roughly one in three businesses in both sectors actively considering closure. Including businesses that have already become inactive in 2020, Canada could lose a total of between one in eight (12 per cent) and one in four (26 per cent) businesses during this pandemic.
The number of BC businesses at risk of closing due to COVID-19 could be as low as 10,200 as high as 30,000 (between 6 and 18 per cent of all BC businesses). Furthermore, job losses could be as low as 123,500 or as high as 357,900 (between 7 and 21 per cent). Variables like pace of economic recovery, access to support and financial assistance, and government policies could impact real outcomes.
"While BC businesses have not seen the same intense lockdowns that other provinces have recently, recovery progress is stalling," says Muriel Protzer, Senior Policy Analyst for BC. "Our collective decision to shop local whenever possible helps keep business local and create meaningful jobs."
#SmallBusinessEveryDay dashboard update
Small business recovery in BC has stayed relatively flat the past few months, while other provinces such as those with greater lockdown restrictions have taken a significant step back on their paths to recovery.
“2021 isn’t off to a great start for small business. After the tough financial and emotional slog to get through a historically difficult year, the beginning of 2021 feels more like the fifth quarter of 2020 than a new year,” said Laura Jones, CFIB’s executive vice-president. “It goes without saying that supporting local is more important than ever. 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.”
Read CFIB’s full research snapshot for more details.
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