Small businesses are by far most at risk in the current economic climate onset by COVID-19, and many of the already shuttered businesses do not believe they will be able to reemerge after the pandemic has ended.
A new survey by the Canadian Federation of Independent Business (CFIB) found that 32% of respondents are unsure if they will be able to reopen, even with the federal government’s 75% wage subsidy for small- and medium-sized businesses that have seen their revenues drop by 30%.
The subsidy, retroactive to March 15 when severe business impacts began, covers an employee’s salary on the first $58,700 earned, up to $874 per week.
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Since the start of the COVID-19 outbreak in early-January 2020, 22% of these businesses reported a gross sales revenue decline of 26% to 50%, 23% indicate a decline of 51% to 75%, 22% indicate a decline of 76% to 99%, and 4% are no longer making any money.
On average to date, the coronavirus has cost each small business across the country $160,314, when factors such as lost sales, slowed or halted production, and cancelled plans are accounted for. Provinces such as Alberta have seen their small businesses lose an average of $214,367 so far, while BC is at $176,767, Ontario is at $162,788, and Quebec is at $154,553.
When it comes to their employment, COVID-19 has led to 38% of the businesses laying off some staff, 12% laying off all staff, and 28% reducing hours. Another 14% believe they will need to lay off some or all staff soon.
While 68% of respondents believe the federal wage subsidy program is helpful and 53% see the new Canada Emergency Business Account interest-free loans positively, there continues to be uncertainty, with the possibility that more closures will happen with a worsening and prolonged pandemic. They believe more needs to be done to provide these businesses with further emergency relief, now and after the post-pandemic recovery period.
At the moment, 60% of closed businesses believe their current closure is merely temporary and they will be able to reopen.
At the same time, without additional support from the government, 25% of businesses say they can survive less than a month under the current conditions, while 42% can last between one and three months, 5% between one and 12 months, and 5% more than a year.
For the small businesses paying rent or mortgage on their property, 61% say they are in a position to pay their April bill, but 23% cannot.
For additional measures, 71% of the businesses would like to see a deferral of GST and HST payments, and 66% believe the provincial government should take more action to protect commercial renters from being evicted. Nearly a third, 31%, of respondents who pay rent think their landlords are being reasonable during this challenging period, while 13% disagree.
The survey was conducted online starting on March 27, and so far it has received about 9,700 responses from small businesses across Canada.