The figures were the highest to date as calculated by any federal agency on the impact of the Covid recession.
Private sector analysts put losses at twice as much, at least $139 billion, according to 2021 calculations by the Canadian Federation of Independent Business.
Data from Statistics Canada released Tuesday indicate small and medium sized businesses lost about $60 billion in the first year of pandemic lockdowns and travel bans.
Data were drawn from firms that applied for interest-free loans at taxpayers’ expense, per Blacklock's Reporter.
“From 2019 to 2020 approximately 47% of all small and medium sized businesses, those with annual salary expenses of less than $1.5 million, experienced a drop in gross profits totaling a loss of nearly $60 billion,” wrote analysts.
StatsCan drew its figures from applications under the Canada Emergency Business Account program that paid $60,000 interest-free loans.
Restaurateurs and hotelkeepers saw revenues fall “anywhere from about 30% to 60%,” said the report.
This was due in part to successive waves of health restrictions,” it said.
Retailers, builders and manufacturers saw declines of “roughly 20% to 25%” and recovered more quickly, wrote analysts.
“Many of the businesses that applied for and received funding were in client-facing industries.”
Of 898,271 borrowers only 6,343 filed for bankruptcy, said StatsCan. The agency noted the figure was deceptively small since loans are not repayable till December 31, 2026.
“One fifth or 19.9% of businesses reported not knowing if they would have the liquidity or access to credit to repay the loan,” said Repayments And Bankruptcies.
Another 14.5% said they definitely would not have the cash for repayment on loans now charged at 5%.
“Many of the businesses that declared bankruptcy in the lead up and aftermath of the repayment deadline were likely struggling due to the prevailing economic climate and may have been unable to cope with servicing what would become an interest-bearing loan,” wrote analysts.
The loan program paid out $49.2 billion. Parliament passed the measure only 16 days after the World Health Organization declared a global pandemic in 2020.
“We need to keep businesses going so they can keep employees on staff,” then-Finance Minister Bill Morneau said at the time.
“We can’t know the full impact or the duration of the challenge we’re facing.”
