The Canadian Federation of Independent Business (CFIB) says tens of thousands of Canadian businesses will be forced into bankruptcy despite aid measures from the federal government in Ottawa.
The CFIB says many Canadian businesses will shut permanently because they won’t be able to weather the current lockdown and social distancing measures. The government of Prime Minister Justin Trudeau took too long to roll out emergency support programs, and, as a result, many companies won’t survive, says CFIB.
A survey of CFIB members shows 80% of small and medium firms are closed or operating at reduced capacity because of the pandemic, meaning only 20% are fully operational. The federal government has stepped up aid to businesses, introducing measures such as a 75% wage subsidy and $40,000 loans, and a rent relief program is expected soon. But the measures weren’t announced immediately after the closure of non-essential businesses, and the rent and wage subsidy programs aren’t yet putting money in the bank.
Almost seven million Canadians, or about a third of the labour force, have applied for the Canada Emergency Response Benefit, which provides those who have lost work from COVID-19 with $2,000 a month. If businesses do re-open in the near future, CFIB said some CERB recipients may opt to continue receiving federal money instead of returning to work.