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COVID debt, rising costs and lack of sales pose major challenges to a small business recovery

All COVID support programs for businesses end on May 7

Toronto, April 21, 2022 – Small businesses are facing a long and challenging road to recovery, according to new data from the Canadian Federation of Independent Business (CFIB)’s Small Business Recovery Dashboard. In fact, only 40% are back to normal revenues for this time of the year. 

The survey results also show only a quarter of business owners (27%) say they are fully recovered.

Among the many obstacles in the path of a full recovery of Canada’s small business community is the staggering level of fresh COVID-related debt small firms have had to take on during the pandemic. 

“Two-thirds of small businesses (65%) have had to take on debt, at an average of $160,000, just to survive the past two-years,” said CFIB president Dan Kelly. “For almost 900,000 business owners, up to $60,000 of this debt is in the form of a government-backed Canada Emergency Business Account loan.” 

“The 2022 budget missed an opportunity to forgive a larger portion of these loans for the most deeply affected small businesses,” Kelly added.

Despite the long road back to normal, all major COVID support programs end on May 7, 2022. A huge number of small firms are also facing major challenges with rising costs for energy, inputs and insurance (90%) or hikes to government-imposed costs for carbon and payroll taxes (82%). This may explain why almost three-quarters (72%) of small business owners did not find the measures in 2022 federal budget particularly helpful for their situation. 

CFIB is calling on the federal government to help the hardest hit SMEs deal with their COVID-related debt by increasing the forgivable portion of their CEBA loan to at least 50% and extending the repayment deadline beyond December 2023. The federation is also asking government to help new businesses that were excluded from the CEBA program and to forgive a portion of other federal COVID-19 loan programs like HASCAP.

Small business owners can add their voice to CFIB’s petition calling for more debt relief at cfib.ca/covidpetition.

For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
[email protected] 

Methodology
Your Voice - April 2022, an online national survey completed by 2,705 CFIB members between April 8 to 19, 2022. This survey has a margin of error of +/- 1.9%, 19 times out of 20. Results obtained so far are preliminary.

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
 

April 21, 2022

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