Up to 225,000 Small Businesses in Canada Won’t Survive a Second Lockdown: CFIB

A lone person walks past closed businesses in Kensington Market in Toronto, Canada, on April 15, 2020. (Nathan Denette/The Canadian Press)

Small businesses that remain “fragile” after widespread lockdowns in the spring likely won’t be able to survive a second lockdown without more help from the government, the Canadian Federation of Independent Business (CFIB) is warning.

The CFIB issued the statement this week as some cities and provinces are mandating increased closures amid spiking COVID-19 cases. Manitoba’s new rules go into effect today that will see its gyms, hair salons, and most businesses not deemed a critical service shuttered. Toronto announced this week it would extend its ban on indoor dining into December, while Quebec is partway through an extension of a second 28-day partial lockdown.

The CFIB previously estimated 160,000 businesses across Canada may permanently close due to COVID-19, but now say that could go up to 225,000 amid ongoing closures.

CFIB president Dan Kelly said in a statement on Nov. 10 that businesses “need full, immediate and ongoing support in any jurisdiction where new restrictions are introduced.”

“‘We are all in this together’ means that business owners should not be asked to cover the costs of protecting society through fresh lockdowns of the economy alone,” he said.

The CFIB says that while federal programs are delivering some support, those programs are “just not ready to deliver enough aid to small businesses affected by a second round of full or partial closures.”

On Nov. 10, Prime Minister Justin Trudeau urged the province’s premiers to take stricter measures to fight rising cases of COVID-19, saying Ottawa’s supports would help carry businesses through the crisis.

“I would hope that no leader in our country is easing public health vigilance because they feel pressure not to shut down businesses or slow down our economy,” Trudeau said.

But CFIB says “hundreds of thousands” of small companies have “fallen through the cracks” of government programs and have not been able to receive the support needed to survive.

For example, there is currently no program in place to support paying rent while the new Canada Emergency Rent Subsidy program is in the draft legislative stage. Likewise, the previously announced expansion of the Canada Emergency Business Account loan program is not yet in effect.

The Canada Emergency Wage Subsidy has been reduced from 75 percent to 65 percent and there is no plan for an additional top-up for businesses affected by a second round of closures, CFIB adds.

Recommendations

CFIB says provincial governments need to give additional focus to the economic consequences of their policies as they mull continued lockdown measures.

The organization is recommending provinces consider limiting blanket lockdowns to sectors and regions “where there is evidence to support them"; sharing sectoral data regularly to help business owners and consumers understand the reasons for lockdown measures; and provide supplemental provincial support programs for small firms, including retroactive rent support for firms that qualified for but didn’t receive the Canada Emergency Commercial Rent Assistance due to the lack of landlord participation.

CFIB also says big box stores like Costco and Walmart are profiting most from closures of small businesses, so any new lockdown measures “should be applied fairly.”

“If a small business with only a few customers per day can’t sell t-shirts or TVs, crowded big box stores like Costco and Walmart shouldn’t be allowed to sell them either just because they have a grocery section,” the CFIB statement said.