With the pandemic having now surpassed one full year, many Canadian businesses continue to struggle.
The latest data from the Canadian Federation of Independent Businesses (CFIB) found 62 per cent of businesses are fully open, 44 per cent are fully staffed, and only 31 per cent are making sales at their pre-pandemic levels.
As a result, many entrepreneurs are being forced to delay their retirement, and grapple with mounting debt and mental burnout.
“Small businesses have seen it all this past year, from devastation to digital innovation. It’s clear this is going to have an impact for years to come,” Simon Gaudreault, senior director of national research with CFIB, said in a news release.
According to the data, 42 per cent of business owners have had to delay their retirement as a result of the pandemic.
Further, many business owners rely on the sale of their business to finance their retirement, but 55 per cent report the value of their business has declined due to months-long restrictions associated with the virus.
Moreover, seven per cent of business owners have been forced to use their retirement savings to finance their business.
“The impact on retirement plans underscores just how profoundly hard-hit small business owners and their families have been by this pandemic,” Gaudreault said.
Based on the findings, the average small business is now more than $170,000 in debt—76 per cent of entrepreneurs who have taken on debt say it will take them more than a year to repay it, and 11 per cent are worried they may never be able to repay it.
Additionally, nearly half of business owners—48 per cent—report declining mental health as a result of the pandemic, and 46 per cent said they have had to work significantly longer hours in order to keep their business operational.
Most alarmingly, one out of six Canadian small businesses is at risk of permanently closing, and, when including the in the 58,000 businesses forced to close permanently in 2020, Canada is at risk of losing 20 per cent of all businesses by the end of the pandemic.
“Many small businesses are no longer in business or are unsure of their future. CFIB itself has 15,000 fewer members as Canada enters a second year of the pandemic,” Dan Kelly, president of CFIB, said in the same release.
“While CFIB is proud to provide any small business owner with free support until the pandemic is over, provinces need to ensure they find a way to end lockdowns for good across the country,” he continued