A third of Canada’s small businesses might not survive the COVID-19 pandemic — a dire prediction from the Canadian Federation of Independent Business (CFIB).
“This kind of interruption is unheard of in the economy, it’s larger than we’ve ever seen,” said Ted Mallett, vice-president and chief economist of the CFIB. “Many of these businesses, if they’re forced to shut down for a long period of time, just won’t be around to recover.”
The organization boasts more than 110,000 members, and many of the businesses represented already operate on razor-thin margins.
“When money comes in the door, it goes out the door very quickly in terms of expenses like salaries, rent, materials, and so on. When that flow is interrupted, then businesses can’t carry on and pay for what they need to do,” Mallet tells CityNews.
The federal government has already offered up some support, largely in the form of deferred taxes and a 10 per cent wage subsidy for small employers. But the CFIB is calling for that figure to be boosted.
“We’re suggesting measures upwards of about 75 per cent of wage subsidies for employees who are still able to work at the business and therefore keep the business open and operating as best as possible,” said Mallett.
Mallett says the government has been listening to feedback from the CFIB and its members. He’s hopeful new measures will be announced in the near future.
“There are programs being developed as we speak. Policy makers are feeling their way through a lot of uncertainty as well, and hopefully we’ll have better programs designed over the next few days and weeks.”
Mallett also believes the survival of small businesses is crucial to the overall recovery of the Canadian economy.
“There are many people who work for these businesses. If the relationship between suppliers changes, the relationship between employees and employers change, then we’re going to have an awful lot of people looking for new types of work, new types of businesses,” explains Mallet.
“That is problematic in the longer term because it takes a longer time for the economy to find its feet again and to start operating at a reasonable productive level.”