by Stephen Dafoe
A year into COVID-19’s impacts finds many Canadian business owners delaying retirement as they face increased debt and mental burnout, a new Canadian Federation of Independent Business study finds.
CFIB’s report, One Year of COVID-19: Seven Ways the World Has Changed for Small Business, also finds others are jumping deep into digital business or getting out of business altogether.
“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,” said CFIB’s senior director of national research, Simon Gaudreault.
Some key findings from the report show that 47 per cent of Alberta small business owners are delaying their retirement due to the pandemic, while another 6 per cent plan to retire earlier. The latter may be difficult as the report finds 67 per cent of businesses report the value of their business has dropped after months of COVID-19 restrictions.
“The impact on retirement plans underscores just how profoundly hard-hit small business owners and their families have been by this pandemic,” Gaudreault. said. “Not only has current income plummeted, but many are worried that sales won’t come back, and the value of the business and what they can leave to their kids has also taken a nose-dive.”
On the debt side, the CFIB report finds the average Alberta small business carries more than $186,000 in debt, with 72 per cent of business owners saying it will tame more than a year to repay. Eleven per cent expressed concerns about ever being able to repay it.
Mental health issues brought on by operating a business during the pandemic has affected 53 per cent of business owners, with 46 per cent indicating the need to work much longer hours than before.
The pandemic has forced many businesses to get into online sales. CFIB reports a third of Canadian small businesses are now selling online, an increase of 152,000 companies since the pandemic began.
Despite expanding into online markets, one in five Canadian businesses are at the risk of closing permanently. That is another 34,500 potential closures on top of the 58,000 firms that shuttered in 2020. CFIB suggests 20 per cent of all Canadian businesses could close 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,” said CFIB President Dan Kelly. “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. Many small businesses remain locked down one year after COVID-19 began—it is well past time to shift gears. Small firms have done more than their fair share in the fight against COVID-19.”