VANCOUVER (NEWS 1130) — Even as provinces move forward with reopening plans during the COVID-19 pandemic, a new report shows 14 per cent of small Canadian businesses could be forced to close permanently.
This represents about 158,000 businesses in addition to the ones already shuttered, according to the Canadian Federation of Independent Business.
A CFIB survey conducted in June shows one in seven small-to-medium-sized companies are considering bankruptcy or winding down operations as a result of the coronavirus. The highest risk of going under comes from Alberta businesses at 19 per cent since the province was hit by the pandemic, also bringing down oil prices.
About 12 per cent of B.C. businesses risk closing permanently.
“Small businesses are big players in our economy, so minimizing business losses is critical to recovery. Right now both government support and consumer behaviour are critical to transitioning back to conditions that allow businesses to survive and thrive,” said Laura Jones, the CFIB executive vice-president.
The industries most at risk are arts, recreation, and information at 30 per cent, as well as the hospitality sector at 27 per cent.
Recent numbers from CFIB also show just over half (53 per cent) of businesses suggest it will take more than six months to return to typical profitability, while about 18 per cent have either maintained or returned usual levels of profit.
As for COVID-19 debt, 41 per cent of businesses see it taking more than a year to pay off.