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% 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%) of small firms are actively considering bankruptcy or permanently winding down operations.”
Since January, the share of businesses reporting normal sales has risen very slowly, from 31% to 35%. Until more companies get back to regular sales, their capacity to face new costs or repay debt remains significantly reduced. On a national level, two-thirds of businesses (67%) report taking on debt, at an average of $158,000 per business. To give small businesses time to recover, CFIB is urging the federal government to:
- Announce a freeze in the carbon tax and work to reduce energy costs for small business owners immediately
- 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.”
Milena Stanoeva is the Director of Public Affairs at the Canadian Federation of Independent Business, focusing on policy, economics, and government relations. She has an MA in Communication and Culture from York University and a BA Honours in Communication Studies and Women’s and Gender Studies from Carleton University.