A report from the Industry department found that small businesses borrowed an average of over a quarter million last year..According to Blacklock’s Reporter, as bankruptcy courts opened again after the COVID-19 pandemic, more businesses had to borrow money because they were going bankrupt..The Industry department did a Credit Conditions Survey and found that small businesses with less than five workers borrowed an average of $264,091 last year. Retailers borrowed around $174,000. Restaurants borrowed about $385,000 and construction businesses borrowed around $908,000..Last year, 103,586 businesses across the country went bankrupt. This was 12% more than in 2021. After the 2008 financial crisis, there were 158,441 bankruptcies. The Superintendent of Bankruptcy said these numbers are usually a “lagging indicator” rising over time..“Yes, we will see an increase,” Superintendent Elisabeth Lang testified at 2020 hearings of the Commons Finance committee. .“I don’t think it will be sudden.”.A Credit Conditions Survey asked 1,881 small businesses about their current business situation. The results were similar to another survey from August 18, 2022. That survey said small businesses owed an average of $158,000 because of the COVID-19 pandemic..“Seventeen percent of small businesses, almost one in five, are at risk of permanent closure due to the damage they have taken on over the course of the last couple of years,” Dan Kelly, CEO of the Federation, testified last November 29 at the Senate National Finance committee. .“The economy has not moved on. We are still way behind pre-pandemic levels.”.“Only half of small businesses are back to normal sales from pre-pandemic levels,” said Kelly. .“That’s half of Canada’s business community that is still under water.”.“Many businesses close just by an orderly wind-down of the business because they don’t see an economic future any longer,” said Kelly. .“That would be a significant uptick from what is normal.”.“We believe a lot of the failures are going to be back-end loaded post-pandemic as businesses realize they don’t have a pathway back to profitability,” said Kelly. .“I think those days are starting now.”.Before the pandemic, Canada had 1,198,632 small businesses, according to a department of Industry estimate. Small operators employed most Canadian workers, a total of 7.7 million. At least 740,800 small business jobs vanished with the COVID-19 recession in 2020..“How many businesses appear and disappear each year? In 2020, the COVID-19 pandemic likely impacted business entries and exits,” said a department report Key Small Business Statistics 2021.
