Calgary, March 15, 2021 – Business lockdowns and restrictions first hit Canada a year ago in mid-March. As a result, many business owners are delaying retirement, grappling with mounting debt or facing mental burnout. They are also leaping into the digital sphere at an unprecedented pace or getting out of the game entirely, finds the latest research by the Canadian Federation of Independent Business (CFIB), One Year of COVID-19: Seven Ways the World Has Changed for Small Business.
“Small businesses have seen it all this past year, from devastation to digital innovation. It’s clear this is going to have an impact for years to come,” said Simon Gaudreault, CFIB’s senior director of national research.
Retirement un-planned
Nearly half (47 per cent) of Alberta small business owners are delaying their retirement as a result of the pandemic, while 6 per cent will retire earlier than planned. Many business owners rely on the sale of their business to finance their retirement, but 67 per cent report that the value of their business has dropped after months of COVID-19 restrictions. Additionally, 9 per cent of business owners have dipped into their retirement savings to finance their business.
“The impact on retirement plans underscores just how profoundly hard-hit small business owners and their families have been by this pandemic. Not only has current income plummeted but many are worried that sales won’t come back, and the value of the business and what they can leave to their kids has also taken a nose-dive,” added Gaudreault.
Debt overload
The average Alberta small business is now more than $186,000 in debt. Three quarters (72 per cent) of businesses that have taken on debt say it will take them over a year to repay, and 11 per cent are worried they may never be able to repay it.
Mental burnout
Over half of Alberta business owners (53 per cent) report they have suffered from mental health issues as a result of the pandemic and 46 per cent have had to work significantly longer hours.
Leaping into the digital sphere
A third of all small businesses across Canada are now selling online, an increase of 152,000 new entrants into the eCommerce market since the start of the pandemic. Retailers, arts and recreation (e.g. gyms), hospitality (e.g. restaurants), and health services businesses are the biggest adopters—not surprising as they have also been the hardest hit by lockdowns.
Fewer small businesses
One in five (34,500) Alberta small businesses is at risk of permanently closing. Adding in the 58,000 businesses that became inactive in 2020, Canada could lose a full 20 per cent of its businesses by the end of the pandemic.
“Many small businesses are no longer in business or are unsure of their future. CFIB itself has 15,000 fewer members as Canada enters a second year of the pandemic,” noted Dan Kelly, CFIB’s president. “While CFIB is proud to provide any small business owner with free support until the pandemic is over, provinces need to ensure they find a way to end lockdowns for good across the country. Many small businesses remain locked down one year after COVID-19 began—it is well past time to shift gears. Small firms have done more than their fair share in the fight against COVID-19.”
For media enquiries or interviews, please contact:
Annie Dormuth, CFIB
Alberta provincial affairs director
403-700-1945
Annie.dormuth@cfib.ca
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 members across every industry and region, including 9,300 in Alberta. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.