CFIB raises estimate of small businesses at risk of closing permanently

Marco Green
January 24, 2021

More than 200,000 Canadian businesses could close permanently during the COVID-19 crisis, throwing millions of people out of work as the resurgence of the virus worsens across much of the country, according to new research.

A survey by CFIB this summer found 158,000 small and medium-sized businesses were at risk of closing.

"All of those sectors are more at risk of closing, and it comes squarely to the fact that their business model and business operations rely directly on in-person sales", says Dormuth. This latest estimate is on top of the 58,000 businesses that became inactive in 2020.

Nationally, the number of threatened businesses could be as low as 71,000 or as high as 222,000 (between seven and 21 per cent of all businesses) depending on how the coming months unfold, CFIB says.

Projecting these results to all Canadian businesses allowed CFIB to estimate the number of businesses at risk across Canada, by province and by sector.

"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", he said in a statement.

He explains that more businesses shutting down means Canadians can expect to lose jobs, making it even more hard for the economy to recover.

In both sectors, approximately one in three businesses are "actively considering" closure. "We must also ensure that provincial support programs are renewed for those businesses impacted by ongoing restrictions".

"That was the case back in June and July and is the case again in January 2021 with 22 per cent of Alberta small businesses at risk of closing which is significantly higher than the national average". Ontario has the smallest percentage of fully opened businesses in Canada.

"2021 isn't off to a great start for small business", said Laura Jones, CFIB's executive vice-president.

She called on governments to help small businesses "replace subsidies with sales" by introducing safe pathways to reopen to businesses. "Coupled with COVID and the impacts of the pandemic, it's really putting a lot of our small businesses and local entrepreneurs in a precarious situation and on the brink of closure".

Other reports by Click Lancashire

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