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Small Businesses a Year Into COVID-19

Milena Stanoeva, Manager, Public Affairs, Canadian Federation of Independent Business

Milena Stanoeva

Manager, Public Affairs, Canadian Federation of Independent Business

Because of COVID-19, small businesses have weathered more change in the past 12 months than they ever have before. Business owners have had to navigate entirely new rules of social interaction, pivot to online sales, takeout or remote work arrangements, and understand and apply new rules and regulations at break-neck speeds.


It’s no surprise that small business owners themselves have changed. Here are four significant ways in which things will be different for Canada’s small business community going forward:

1. Businesses face an uncertain recovery due to crippling debt

Many small businesses, especially in customer-facing sectors, have seen dramatic drops in sales since the start of the pandemic as a result of stay-at-home orders and being required to close to in-store operations. The average Canadian business now finds itself $170,000 in debt and many are worried about being able to ever repay it. CFIB is asking federal and provincial governments to find ways to reduce small business debt as part of their recovery plans.

2. A majority of businesses are still reliant on government support to survive

Generally, small business owners are not fans of government subsidies and grant programs. They prefer to be left to succeed or fail on their own merits. But COVID-19 has changed all of that. 70% of businesses say federal and provincial small business relief programs are crucial for their survival in 2021. Since many of these businesses have been forced to close to protect public health, and not as a result of their own choice, it’s fair that they should receive support. Still, it’s important for governments to have a clear view towards helping businesses replace subsidies with sales by creating safe ways for them to reopen and encouraging Canadians to shop local.

3. One in five businesses is at risk of permanent closure

COVID-19 has already spelled the end for tens of thousands of businesses and many business owners are wondering if they should pull the plug before taking on more debt. In fact, adding up the businesses seriously considering closing down to those that have already become inactive in 2020, Canada could lose as many as one in five businesses by the end of the pandemic. This puts 2.4 million private sector jobs at risk. It’s important for governments to do all they can to help businesses bridge to better times to ensure Canada’s economy recovers quickly.

4. Businesses are going through a digital renaissance

Businesses have embraced e-commerce since the start of the pandemic—a third are now selling online, an increase of approximately 152,000 new entrants to the digital sphere. The top e-commerce adopters have been those hit hardest by the pandemic, including retailers, arts and recreation, hospitality, and health services businesses. However, many report they are still struggling to generate revenue this way—it’s hard to compete against the big guys, like Amazon and Walmart, on a small business’ marketing budget. CFIB’s #SmallBusinessEveryDay campaign encourages consumers to make the effort to find a small business online and to recommend them to their networks in order to support the recovery of our communities.

Small businesses make our neighbourhoods vibrant, create local jobs and support our kids’ hockey teams. COVID-19 is undoubtedly the biggest challenge they have faced in recent history. However, with the right government supports and a commitment from consumers to shop at their local, independent businesses every chance they get, we can ensure many of them make it to the other side.

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