A new survey from the Canadian Federation of Independent Business shows the global coronavirus pandemic has become a “disaster” for Canadian small businesses.
More than 70 percent of small business owners who took part in the survey say they’ll be forced to close within three months without more COVID-19 relief. Thirty percent say they won’t last a month.
“This is the stark reality of small businesses clearly coming into focus,” says Louis-Philippe Gauthier, CFIB’s director of provincial affairs for New Brunswick and Prince Edward Island.
He says that with government health measures keeping most everyone at home, small businesses have lost most of their customers. Many more can’t even open at all.
Few are disputing the importance of public health measures right now. But Gauthier says that doesn’t mean they’re not terrible for business.
According to the CFIB’s survey, 60 percent of small businesses in Canada have seen their sales go down “significantly” because of COVID-19. About one-third of them have seen sales sink by 75 percent.
In Nova Scotia, small businesses have already lost an average of $76,984 each because of Coronavirus. In New Brunswick, businesses have lost an average of $56,302.
Those disappearing sales mean more than half of small businesses have started laying off staff, with a full 25 percent already laying off their entire staff. And most business owners say additional layoffs are looming.
Twenty-two percent of the country’s small businesses have already closed entirely.
The numbers are stark, and Gauthier says that without more help from federal and provincial governments swaths of small businesses in Canada will be forced to close because there’s just no way around it.
“You don’t have to go far in reasoning to understand that if there’s no business operations the runway for these businesses is quite short,” he says.
“Because of government-ordered shutdowns…there is no revenue going into businesses. And one does not have to go far in reasoning to understand that there are still a series of fixed costs that these businesses have to pay out. Thinking that there’s a magical pot of money somewhere that would allow all businesses in Canada to weather the storm is just fanciful thinking.”
Gauthier says the first step government can take is to provide better wage subsidies for businesses that want to keep their employees working.
Last week, Prime Minister Justin Trudeau said the federal government will pay a 10 percent of an employee’s wages if businesses keep them on staff. At the time, Gauthier called the plan “woefully inadequate.”
The CFIB is now asking that the federal government pay 75 percent of wages for employees who would otherwise be let go because of COVID-19.
Gauthier says this is so important because it lets employers keep a direct relationship with their employees, rather than just pawning them off on employment insurance.
“Once that support [between an employer and their employee] is distanced, it’s not as easy to get back to business as usual,” he explains.
The CFIB is also asking for simpler and faster access to EI work-sharing for all employers, and more support for self-employed people who’ve lost work because of COVID-19.
“They’re businesses, too. And government measures have to encompass self-employed and businesses owners as well,” Gauthier says. “It’s important to help the machine of the businesses, but people who are running businesses need help as well.”
A version of this story was published in Huddle, an Acadia Broadcasting content partner.
