CFIB fears increased business closures

(Montreal) Sylvain Cholette has no more ideas. Despite emergency loans from Quebec and Ottawa, this operator of a sporting goods store, who can no longer receive customers due to restrictions caused by the COVID-19 pandemic, is unable to sell his stocks and wonders if it is worth continuing.

Posted on January 21, 2021 at 3:39 p.m.


Updated at 5:05 p.m.

Julien arsenault
The Canadian Press

“Currently, the decrease in turnover is more than 90%, complained Thursday the owner of Volvox Sport, located in Montreal and which had seven employees. The stocks are in the basement and it’s not moving. If amateur sport doesn’t pick up, I don’t know how I’m going to continue. ”

This small and medium-sized business (SME) is one of 239,000 that could be swept away by the health crisis, according to the most recent data from the Canadian Federation of Independent Business (CFIB), which indicates that a growing number of entrepreneurs plan to throw in the towel.

According to the most recent survey conducted among 4,129 of its members, one in six owners would consider going out of business, threatening more than 181,000 small and medium-sized enterprises (SMEs). In addition, there are 58,000 businesses that are no longer active, identified by Statistics Canada last September.

“These are data that surprised us and are worrying,” said CFIB senior director of national research, Simon Gaudreault, in an interview. We are not going in the right direction. ”

In June, the employers’ association estimated that 158,000 SMEs were at risk due to the health crisis.

Located in the vicinity of La Fontaine Park, Mr. Cholette’s boutique tried to diversify over the summer by adding products like flying discs and pétanque games to its offering as consumers wanted to hang out. outside.

“But now we are closed,” he lamented. We are a family business. It was my inheritance for them, but it will end in ordeal because there is no more activity. ”

Lots of jobs

It is now 2.4 million jobs that could disappear if owners go bankrupt or wind up their business. The most pessimistic projections can reach up to 3 million positions.

Despite the hopes raised by a vaccine against the new coronavirus, this does not seem sufficient to boost the morale of entrepreneurs, who, according to Mr. Gaudreault, have seen their room for maneuver, sometimes very thin, melt like snow in the sun since the last year.

“At the beginning, there were a lot of programs that were offered through loans,” he said. Cash reserves have shrunk while indebtedness has increased for many. Yes there is hope with the vaccine, but until then you have fewer resources. ”

Unsurprisingly, it is in sectors such as catering and accommodation that the projections are the most pessimistic.

A little better

In Quebec, about 11% of SMEs are considered at risk of closing due to the health crisis, which represents the place in Canada, with Nova Scotia, where this proportion is the lowest. Conversely, Alberta (22%) and Ontario (20%) occupy the top of the ranking.

“The economy was doing well in Quebec when the pandemic arrived,” said Mr. Gaudreault. Perhaps the foundations of the province were stronger. ”

Nonetheless, in the province, only 44% of businesses are fully open, 33% have all their employees and 25% have sales described as “normal”.

Along with federal programs such as wage subsidies and rental assistance, Quebec has also been more interventionist than elsewhere, noted the CFIB representative, referring in particular to the Concerted Actions Program for job retention ( PACME).

While welcoming the speed with which assistance programs have been set up by governments, Mr. Gaudreault explained that they could continue to be improved in order to facilitate access to SMEs, which do not have always have the resources at their disposal to complete all the necessary paperwork.

An extension of loan repayment periods would be welcomed by CFIB, he also said.

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