Economy Cools As Small Businesses Continue To Struggle

Total GDP grew by a mere 0.3 per cent in the third quarter of 2022, dampened by low business sentiment, although a certain rebound is anticipated over the fourth quarter (+1.9 per cent), says the Canadian Federation of Independent Business’ (CFIB) inaugural ‘The Main Street Quarterly’ report. The report, designed as a tool for policy makers and financial institutions in making decisions that impact small businesses, also says retail sales declined in the third quarter, with a growth rate of -0.6 per cent and, while some improvement should be seen in the fourth quarter, growth will remain below average and likely negative in real terms. Furthermore, the private sector continued to see high job vacancy rates (4.9 per cent) in the third quarter, with more than 660,000 jobs going unfilled for at least four months. The report says many businesses are still in a dire financial situation. To survive the pandemic, 65 per cent of small firms resorted to taking on federal government loans, while 24 per cent used credit cards, and 23 per cent used lines of credit. On average, 40 per cent of small businesses have not yet repaid any of their pandemic-related debt. Moreover, 55 per cent of small businesses report that their financial situation, including debts taken on due to the pandemic, poses a significant challenge.