Almost one in five small businesses face permanent closure in Canada, the Senate national finance committee was told yesterday. The figure represents the equivalent of more than 200,000 operators..“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,” testified Dan Kelly, CEO of the Canadian Federation of Independent Business..“The economy has not moved on. We are still way behind pre-pandemic levels.”.According to Blacklock's Reporter, the figures were drawn from surveys with the Federation’s 95,000 members..“Only half of small businesses are back to normal sales from pre-pandemic levels,” Kelly added. “That’s half of Canada’s business community that is still under water.”.“Two thirds of small Canadian firms are still facing additional COVID debt, debt they didn’t have before the pandemic,” said Kelly. “On average that’s now $110,000 in additional debt.”.Federal bankruptcy figures show court applications by insolvent companies are below pre-pandemic levels. However Superintendent of Bankruptcy Elisabeth Lang in 2020 testimony at the Commons finance committee explained the number of insolvencies was a lagging indicator..“Our historical data show that yes, we will see an increase,” said Lang. “I don’t think it will be sudden.”.The 2008 financial panic saw 158,000 bankruptcy filings, a “record high,” she added..Kelly yesterday told the Senate committee bankruptcy data will not capture the extent of damage suffered by family-run shops, restaurants and other ventures. “That isn’t all bankruptcy,” he said..“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.”.Canada, prior to the pandemic, had 1,198,632 small businesses, by Department of Industry estimate. Small operators employed most Canadian workers, a total 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..No federal agency to date has calculated the actual number of small operators to close permanently. The industry department in an August 12 report SME Profile: Ownership Demographic Statistics found “a substantial decline” in the number of family-owned operations.
Almost one in five small businesses face permanent closure in Canada, the Senate national finance committee was told yesterday. The figure represents the equivalent of more than 200,000 operators..“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,” testified Dan Kelly, CEO of the Canadian Federation of Independent Business..“The economy has not moved on. We are still way behind pre-pandemic levels.”.According to Blacklock's Reporter, the figures were drawn from surveys with the Federation’s 95,000 members..“Only half of small businesses are back to normal sales from pre-pandemic levels,” Kelly added. “That’s half of Canada’s business community that is still under water.”.“Two thirds of small Canadian firms are still facing additional COVID debt, debt they didn’t have before the pandemic,” said Kelly. “On average that’s now $110,000 in additional debt.”.Federal bankruptcy figures show court applications by insolvent companies are below pre-pandemic levels. However Superintendent of Bankruptcy Elisabeth Lang in 2020 testimony at the Commons finance committee explained the number of insolvencies was a lagging indicator..“Our historical data show that yes, we will see an increase,” said Lang. “I don’t think it will be sudden.”.The 2008 financial panic saw 158,000 bankruptcy filings, a “record high,” she added..Kelly yesterday told the Senate committee bankruptcy data will not capture the extent of damage suffered by family-run shops, restaurants and other ventures. “That isn’t all bankruptcy,” he said..“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.”.Canada, prior to the pandemic, had 1,198,632 small businesses, by Department of Industry estimate. Small operators employed most Canadian workers, a total 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..No federal agency to date has calculated the actual number of small operators to close permanently. The industry department in an August 12 report SME Profile: Ownership Demographic Statistics found “a substantial decline” in the number of family-owned operations.
