Debt Impedes Recovery For Small Business

Small businesses are facing a long and challenging road to recovery, says the Canadian Federation of Independent Business (CFIB)'s ‘Small Business Recovery Dashboard.’ In fact, only 40 per cent are back to normal revenues for this time of the year. The survey results also show only a quarter of business owners (27 per cent) say they are fully recovered. Among the many obstacles in the path of a full recovery of Canada's small business community is the staggering level of fresh COVID-related debt small firms have had to take on during the pandemic. "Two-thirds of small businesses have had to take on debt, at an average of $160,000, just to survive the past two years," says Dan Kelly, CFIB president. "For almost 900,000 business owners, up to $60,000 of this debt is in the form of a government-backed Canada Emergency Business Account loan." A huge number of small firms are also facing major challenges with rising costs for energy, inputs, and insurance (90 per cent), or hikes to government-imposed costs for carbon and payroll taxes (82 per cent). This may explain why almost three-quarters of small business owners did not find the measures in 2022 federal budget particularly helpful for their situation.