Canada lost over 131,000 small businesses during the pandemic, according to new data from the Department of Industry, highlighting the severe economic toll of lockdowns and restrictions.
Blacklock's Reporter says the latest annual Key Small Business Statistics report revealed an 11% drop in small and medium-sized enterprises, with numbers falling from 1,226,565 in 2019 to 1,095,251 in 2023.
Businesses with fewer than five employees suffered the most.
Retailers were among the hardest hit, experiencing the steepest decline in sales since the Great Depression.
In April 2020, the first full month of pandemic restrictions, retail sales plummeted by 26%.
“Basically, sales dropped off a cliff,” recalled Dan Kelly, CEO of the Canadian Federation of Independent Business. “It’s really bad. It has been soul-crushing for so many.”
The financial devastation pushed some business owners to a breaking point.
In 2020 testimony before the Commons finance committee, Kelly disclosed that his organization had received suicide calls from struggling entrepreneurs.
“Just last week alone, we had five small business owners talking to us about suicide,” he said. “That is how dark this has quickly become.”
A 2022 Bank of Canada study found that half of the businesses forced to close by pandemic restrictions were still shuttered five months later.
The report, Business Closures And Re-Openings In Real Time Using Google Places, referred to the phenomenon as “business hibernation.”
Researchers examined 12,976 businesses in Vancouver, Toronto, and Ottawa and found that while 50% of temporarily closed businesses had reopened by September 2021, 40% remained in limbo, and 10% had shut down permanently.
