Business bankruptcies have been on the rise since mid-2021, with small businesses being the most affected.
A new report from the Canadian Federation of Independent Business has found that 54% of business owners have yet to return to normal pre-pandemic income levels. Two out of three Canadian businesses still have pandemic-related debt and only 10% have been able to repay it in full.
The report also states that only 10% of business owners would file for bankruptcy if they closed for good, suggesting the numbers don’t adequately reflect the reality of small business problems.
“The growing number of small business bankruptcies is just the tip of the iceberg,” said Simon Gaudreault, chief economist at the Canadian Federation of Independent Business.
The pandemic fallout isn’t the only stressor — rising operating costs, lack of demand and interest hikes are all weighing on small businesses.
“Government loans and grants have helped many small businesses stay open, but now those programs have closed, despite the fact that a majority of businesses have still not returned to their pre-pandemic sales levels. said Dan Kelly of the Canadian Federation of Independents. Company.
The federation makes several recommendations, including increasing the repayable portion of government loans, extending repayment terms, granting tax relief and eliminating credit card fees for small businesses.
“Governments need to decide whether to make the problem worse by raising taxes or take immediate action to prevent many businesses from disappearing for good,” Kelly said.
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