More than 200,000 Canadian businesses could shut down permanently during the COVID-19 crisis, throwing millions out of work as the virus resurgence worsens across much of the country, new research shows.
The Canadian Federation of Independent Business said Thursday that one in six Canadian small business owners, or about 181,000, are now seriously considering closing their doors.
The latest figures, based on a survey of its members carried out between January 12 and 16, add to the 58,000 companies that became inactive in 2020.
CFIB surveyed 4,129 of its members in an online questionnaire between January 12 and 16. Since it only involved CFIB members, the survey is not statistically random, but a properly randomized survey of this size would be considered accurate to within 1.5 percentage points. 19 times out of 20.
A CFIB estimate last summer indicated that one in seven or 158,000 businesses were at risk of bankruptcy due to the pandemic.
Based on the organization’s updated forecast, more than 2.4 million people could be unemployed, or 20 percent of private sector jobs.
Simon Gaudreault, senior director of national research at CFIB, said it was an alarming increase in the number of companies considering closing.
“We are not headed in the right direction, and with every week that goes by without any improvement on the business front, more owners are making this final decision,” he said in a statement. “The more businesses that disappear, the more jobs we will lose and the harder it will be for the economy to recover.”
In total, one in five businesses is at risk of shutting down permanently by the end of the pandemic, the organization said.
The grim new research comes after a brutal year for Canadian businesses.
“The start of 2021 looks more like the fifth quarter of 2020 than a new year,” CFIB executive vice-president Laura Jones said in a statement.
She called on governments to help small businesses “replace subsidies with sales” by introducing safe avenues to reopen for businesses.
“There is a lot at stake now, from jobs and tax revenue to supporting local football teams,” Jones said. “Let’s make 2021 the year we help small businesses survive and then get back to prosperity.”
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