A new survey by the Canadian Chamber of Commerce found that a majority of Canadian business owners are worried that they might be forced to shut down before the end of the year due to the financial hardships brought on by the pandemic.
“Today’s numbers from the Canadian Survey on Business Conditions give us the most recent snapshot of the health of our business community, and unfortunately they are sending a very clear message – the light at the end of this pandemic tunnel is still a long way off for most Canadian businesses,” wrote the Chamber’s Chief Economist and Senior Vice President of Policy Dr Trevin Stratton.
“With a whopping 51% reporting they did not know how long they could continue to operate at their current level of revenue and expenditures before considering closure or bankruptcy, the coping ability of businesses to weather the pandemic is quickly dwindling. 40% stated they cannot take on more debt, with the burden even higher for small businesses.”
Out of the businesses surveyed, only 38.4% of business owners reported that they are confident that they will be able to operate for a year or longer at the current revenue levels.
The study also found that nearly one-third (29.6%) of food and accommodation businesses are expecting to lay off employees in the next three months.
As governments across Canada enforce stricter lockdown measures and force businesses to shut their doors, business owners have taken on more debt just to stay afloat.
Tthe Canadian Federation of Independent Business (CFIB) found that small businesses had to take on $135.1 billion in new debt to weather the pandemic storm. On average, that means each business took on approximately $170,000 in loans.
“Over the last six months, the average debt taken on by small businesses to deal with COVID-19 has grown significantly,” said CFIB Executive VP Laura Jones.
“While many businesses had previously reopened and were attempting to regain lost sales, the second wave and the restrictions that came with it are putting a massive wrench in an already slow recovery for small businesses.”
Last week, parliamentarians were also briefed by CFIB President and CEO Dan Kelly about the grim state of doing business in Canada.
