Businesses Still Struggling One Year Later

Business lockdowns and restrictions first hit Canada a year ago this week. One year in, only 62 per cent of businesses are fully open, 44 per cent are fully staffed, and less than a third are making normal sales, says the Canadian Federation of Independent Business (CFIB). As a result, many business owners are delaying retirement, grappling with mounting debt, or facing mental burnout. They are also leaping into the digital sphere at an unprecedented pace or getting out of the game entirely, it says in its ‘One Year of COVID-19: Seven Ways the World Has Changed for Small Business’ report. Two fifths of small business owners are delaying their retirement as a result of the pandemic, while five per cent will retire earlier than planned. Many business owners rely on the sale of their business to finance their retirement, but 55 per cent report that the value of their business has dropped after months of COVID-19 restrictions. Additionally, seven per cent of business owners have dipped into their retirement savings to finance their business. The average small business is now more than $170,000 in debt. Three-quarters of businesses that have taken on debt say it will take them over a year to repay and 11 per cent are worried they may never be able to repay it. Nearly half of business owners report they have suffered from mental health issues as a result of the pandemic and 46 per cent have had to work significantly longer hours. A third of all small businesses are now selling online, an increase of 152,000 new entrants into the eCommerce market since the start of the pandemic. Retailers, arts and recreation (e.g. gyms), hospitality (e.g. restaurants), and health services businesses are the biggest adopters ‒ not surprising as they have also been the hardest hit by lockdowns, it says.