One-third of businesses in Canada won't be able to survive a month without financial aid
Now that various provincial governments have mandated the closure of all non-essential businesses in attempt to lessen the risk of community spread of COVID-19, many independent stores and restaurants across Canada are wondering how they're going to stay afloat.
Much like some citizens are worried about making rent and mortgage payments while they're out of income (luckily banks are giving people a break when it comes to the latter), small businesses are fearing not being able to afford their storefronts as the public hunkers down for weeks or even months of isolation.
Groups representing such businesses are calling for governments to offer some protections, like a wage subsidy to keep staff or a moratorium on evictions, as has been done for renters in provinces like Ontario.
The Canadian Federation of Independent Business has estimated that 1 in 3 businesses in the country won't be able to survive even one month under current financial conditions, and that the average small business is already out about $136,000 due to the coronavirus.
Coronavirus pandemic rapidly becoming 'disaster' for small businesses, Canadian Federation of Independent Business says. Seeks 75% wage subsidy to retain staff. Says weekend survey found 1 in 3 buinesses can't survive a month under current conditions, up from 1 in 4 last week.— CBC News Alerts (@CBCAlerts) March 24, 2020
After surveying nearly 11,000 independent businesses in Canada, the CFIB says that 60 per cent have seen a "significant" drop in sales, and more than a third are reporting that their sales are down more than 75 per cent.
More than half of participants have had to lay off at least some staff — and half of those have had to lay off all staff.
Given these numbers, the group has vowed to "continue putting pressure on governments to give business[es] greater relief — including direct income support."
CFIB is proposing that the feds provide a 75 per cent wage subsidy as part of a special COVID-19 job retention program. "A wage subsidy now will protect many jobs and keep employees connected to their employers, helping to speed the recovery when the COVID-19 emergency phase is over," it says in a statement.
#COVID19 #Canada— Louis-Philippe Gauthier (@cfibnb) March 24, 2020
➡️Nearly a third of small businesses may close within the month without more COVID-19 relief
“At this rate, the only way to prevent massive additional unemployment is for government to introduce a much larger wage subsidy program.”https://t.co/jIaL2SNxs0
Though officials have publicly asked landlords to show understanding and flexibility for tenants — both residential and commercial — during the unprecedented economic environment the global pandemic has created, many businesses and individuals alike are facing a whole lot of uncertainty.
Businesses do now have access to a new Business Credit program (via the Business Development Bank of Canada and Export Development Canada) that can provide financial support to those that are floundering right now.
The federal government is also allowing both businesses and individuals to defer their income tax payments without penalty, and has implemented new EI and income support extensions for employees.
Hopefully some measures will ensure that independent retailers and service providers will be able to hang in there and re-open when this is all over.
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