One in five small businesses in Canada could go out of business, and one in three in the tourism and hospitality sector could close, warns the Canadian Federation of Independent Business (CFIB).
In a new survey, the CFIB warns that small business closures could result in 2.4 million private sector job losses across Canada, as a result of the COVID-19 pandemic and lock-downs that are occurring in Canada’s second wave.
That’s on top of the 58,000 businesses that already became inactive in 2020, the CFIB says.
“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,” Simon Gaudreault, CFIB’s senior director of national research, said in a press release.
“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.”
In total, between 7% and 21% small businesses are at risk of permanent closure by the end of the pandemic, the CFIB warns.
“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,” the CFIB report states.
The numbers are a bit less dire for BC. Even so, restrictions resulting from a second wave could still result in 10,200 to 30,000 business closures in B.C., the CFIB survey finds.
"While BC businesses have not seen the same intense lockdowns that other provinces have recently, recovery progress is stalling," said Muriel Protzer, CFIB’s senior policy analyst for BC. "Our collective decision to shop local whenever possible can make a difference."