Small and medium businesses are still reeling from the fallout from the COVID-19 pandemic, to the point that many are considering shutting down to avoid further losses.
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Roughly 14% of these companies intend to file for bankruptcy or reduce operations, according to the Canadian Federation of Independent Business (CFIB) Small Business Health Tracker.
“Although many restrictions have been lifted across the country, many small and medium-sized businesses are still in a precarious position due to the financial losses they have incurred,” said Yasmine Genetti, Vice President of National Affairs at CFIB.
Two-thirds of SMEs also said they had accumulated debt, averaging $158,000 per company. However, the level of indebtedness is much higher in some sectors.
“Small and medium businesses in the accommodation/catering, arts and entertainment sectors are the hardest hit. A quarter of them may have to close their doors due to the economic fallout from the pandemic,” Mr. Genetti said.
The CFIB has therefore called on the government to freeze the upcoming increase in the carbon tax and cut energy costs for small businesses, as well as extend the Canadian Re-employment Program by six months.
Small and medium businesses will continue to feel the impact of the pandemic for months, if not years. If operating costs and taxes continue to rise, the very survival of many SMEs is at risk,” warned Mr. Genetti.
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Sophie Laurent is a contributor to Vaughantoday.ca, covering a wide range of topics including local news, politics, business, technology, sports, entertainment, and lifestyle. She focuses on delivering clear, balanced reporting that helps readers stay informed about current events and issues that matter to their communities. Sophie is committed to presenting accurate information, practical insights, and relevant stories in a straightforward and reader-friendly manner, making complex topics accessible to a broad audience.