Many small businesses in Canada 'won't survive' drop in revenue due to COVID-19: CFIB

CALGARY -- Half of the country's small businesses have already seen a big drop in sales due to the COVID-19 pandemic and a new report says many will be pushed to the limit if the crisis continues to grow.

The Canadian Federation of Independent Business (CFIB) says, according to a recent survey, the early impacts of the pandemic on the economy have been "massive."

"A full quarter of small firms would not be able to survive for more than a month with a drop in business income of more than 50 per cent," said CFIB president Dan Kelly in a release.

The CFIB found the industries that have been most heavily impacted so far are hospitality, arts/recreation, retail and personal services.

The report also indicated 43 per cent of respondents reduced hours for staff and 20 per cent have engaged in temporary layoffs.

Approximately 38 per cent of small businesses have experienced supply chain issues and 42 per cent anticipate no sales at all if face-to-face contact with customers is prohibited.

Kelly says all small business owners should abide by the advice of public health officials, especially during this troubling situation.

"However, we must recognize that calls for self-isolation have massive economic consequences for many Canadian small businesses, especially as close to two-thirds of small firms would not be able to quickly shift more than 10 per cent of sales to online or telephone options.”

The CFIB says governments also need to step in to help support workers and self-employed Canadians who are forced to self-isolate.

When asked about some of the possible measures to help, 69 per cent of respondents to the survey felt relief on income, payroll and sales taxes would help.

Cancellation of planned tax increases, such as the carbon tax (66 per cent), delayed tax filing deadlines and dropping of penalties (63 per cent), wage subsidies (58 per cent) and incentives to consumer spending (46 per cent) also made the list.

Kelly says the CFIB trusts the government is doing all it can to protect Canadians, but small and medium business owners cannot be forgotten.

"We must also ensure the economic survival of our small and medium-sized businesses to ensure we can get back to normal as soon as the threat is over."