181,000 Canadian Small Business Owners Now Contemplating Pulling The Plug, Putting 2.4 Million Jobs At Risk

0
Photo by Tim Mossholder on Unsplash

One in six (181,000) Canadian small business owners are seriously contemplating permanently closing, putting more than 2.4 million jobs at risk (20 per cent of private sector jobs), estimates the Canadian Federation of Independent Business (CFIB) in an update to its earlier estimate on business closures this past summer. This latest estimate is on top of the 58,000 businesses that became inactive in 2020. In total, one in five businesses are at risk of permanent closure by the end of the pandemic.

“Although there is still time for business owners to reverse course if conditions improve, it is alarming to see an increasing number considering permanent closure, compared to our first estimate last summer. 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. The more businesses that disappear, the more jobs we will lose and the harder it will be for the economy to recover,” said Simon Gaudreault, Senior Director of National Research at CFIB.

The number of threatened businesses could be as low as 71,000 or as high as 222,000 (between 7 and 21 per cent of all businesses) depending on how the coming months unfold, jeopardizing between 962,000 and 2,951,000 jobs. Businesses in the hospitality (restaurants, hotels, caterers) and arts and recreation (gyms, venues, arcades) sectors are most at risk, with roughly one in three businesses in both sectors actively considering closure. Including businesses that have already become inactive in 2020, between one in eight (12 per cent) and one in four (26 per cent) businesses in Canada are at risk of permanently closing during this pandemic.

#SmallBusinessEveryDay dashboard update
The latest data on CFIB’s Small Business Recovery Dashboard underscore how precarious the situation for small businesses has become:

  • 47 per cent of businesses are fully open (down from 62 per cent at the end of November)
  • 36 per cent are fully staffed (down from 41 per cent at the end of November)
  • 22 per cent are making normal sales (down from 29 per cent at the end of November)

These numbers are even lower for provinces under lockdown restrictions. In Ontario only 37 per cent of businesses are fully open, 32 per cent are fully staffed and 18 per cent are making normal sales. Ontario has the smallest percentage of fully opened businesses in Canada.

“2021 isn’t off to a great start for small business. After the tough financial and emotional slog to get through a historically difficult year, the beginning of 2021 feels more like the fifth quarter of 2020 than a new year,” said Laura Jones, CFIB’s executive vice-president. “It goes without saying that supporting local is more important than ever. Governments can also help small businesses replace subsidies with sales by introducing safe pathways for them to reopen to limited customers. There’s a lot at stake now from jobs, to tax revenue to support for local soccer teams. Let’s make 2021 the year we help small business survive and then get back to thriving.”

Read CFIB’s full research snapshot for more details.

SOURCE Canadian Federation of Independent Business

LEAVE A REPLY

Please enter your comment!

Please enter your name here