The Canadian Federation of Independent Business (CFIB) has warned that the COVID-19 pandemic has not only created a health crisis but an economic dilemma as well, with a good portion of small businesses saying they might have to close shop before March ends.
The trade association said in a recent release that almost one in three businesses say they can survive less than a month under the current conditions – up from a quarter last week – based on a study of nearly 11,000 small business owners over the weekend. The average cost of the COVID-19 outbreak for affected businesses has also doubled since last week, CFIB noted, to $136,000.
CFIB reported that 60% of small firms have seen a significant drop in sales, with more than one in three businesses experiencing a reduction greater than 75%.
“More than half of small firms have begun laying off staff, with a quarter reporting they have already been forced to lay off their entire workforce,” said CFIB president Dan Kelly in a statement.
Kelly proposed that at this rate, the only way to prevent “massive additional unemployment” is for the government to create a larger wage subsidy program.
The federal government has offered a 10% wage subsidy to businesses, up to a maximum of $25,000 per company, to help retain employees. But in an interview with CBC News, Kelly called that amount “a drop in the bucket of what is absolutely necessary right now,” adding that it is nothing like the subsidies being provided to businesses in Europe.
Apart from a larger wage subsidy, CFIB has also proposed other recommendations for governments to consider:
