Small businesses mark second anniversary of COVID: Sales remain low, debt remains high, and many are considering permanent closure | CFIB
Toronto, March 9, 2022 – Two years into the pandemic, small businesses are a long way from recovery, according to the latest Canadian Federation of Independent Business (CFIB) Small Business Recovery Dashboard. Only 35 per cent of businesses have returned to normal sales, while debt levels and the share of businesses considering bankruptcy remain high.
“While it is good news that COVID restrictions are finally being lifted across Canada, the economic damage to small business has been massive and has left many in a very precarious position,” said CFIB president Dan Kelly. “As we enter the recovery phase of the pandemic, governments need to hold off on any cost increases, especially given that one in seven (14 per cent) of small firms are actively considering bankruptcy or permanently winding down operations.”
On a national level, two thirds of businesses (67 per cent) report taking on debt, at an average of $158,000 per business. However, businesses in some sectors are faring considerably worse than the national average.
“Businesses in hospitality and arts and recreation have been the hardest hit by the pandemic, with the potential for a full quarter to permanently close as a result of the damage they’ve taken on due to COVID restrictions,” Kelly added.
Small business debt and share of businesses considering bankruptcy
|$ Average debt per business||% Considering bankruptcy|
|Arts and recreation||182,876||23|
Since the start of 2022, the share of businesses reporting normal sales has risen very slowly, from 31 per cent to 35 per cent. Until more businesses can get back to normal sales, their capacity to face new costs or repay debt remains significantly reduced. To give small businesses time to recover, CFIB is urging the federal government to:
- Announce a freeze in the carbon tax and work to immediately reduce energy costs for small business owners
- Halt all current and future tax increases, including the alcohol excise tax, Canada Pension Plan and Employment Insurance premiums
- Extend the Canada Recovery Hiring Program for six months and expand eligibility to new businesses
- Accelerate plans to reduce credit card processing fees for small businesses
“Small businesses have borne the brunt of two years of COVID restrictions and will be dealing with the fallout of the pandemic for months, if not years,” added Kelly. “Imposing new costs and higher taxes on them right now could be the final nail in the coffin for some.”
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Milena Stanoeva, CFIB
This press release presents findings from the following recent CFIB surveys:
- Your Voice – February 2022: An online survey completed by 4,001 CFIB members between February 9-25, 2022. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of ±1.5 per cent, 19 times out of 20.
- Your Voice – January 2022: An online survey completed by 5,630 CFIB members between January 18-27, 2022. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of ±1.3 per cent, 19 times out of 20.
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.