Half of small firms report a drop in sales due to COVID-19: CFIB
A quarter say they won't survive a month with a big drop in income.
TORONTO — Half of Canada’s small firms have already seen a drop in sales due to the economic effects of COVID-19, with four in 10 also reporting a decrease greater than 25%, according to a new survey conducted by the Canadian Federation of Independent Business (CFIB).
“The early economic impacts of coronavirus on Canada’s SMEs has been massive,” stated Dan Kelly, CFIB president. “Even more alarming is our finding that 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%.”
Other key small business findings include:
• The sectors most negatively affected are hospitality, arts/recreation, retail and personal services;
• The average cost to those affected by the economic impacts of COVID-19 is about $66,000;
• 43% have reduced hours for staff and 20% have started temporary layoffs;
• 38% have experienced supply chain issues;
• 42% said they will have zero sales if face-to-face contact becomes impossible.
When asked what additional measures governments should put in place to help them, 91% said government should offer direct financial support for firms experiencing a significant drop in sales. In addition, small business owners suggest governments:
• Provide temporary tax relief on income, payroll and sales taxes (69%)
• Cancel planned tax increases such as CPP/QPP and carbon tax (66%)
• Delay tax filing deadlines and eliminate penalties for late payments and remittance (65%)
• Introduce wage subsidies for businesses to retain staff (58%)
• Create incentives to boost consumer spending (46%).
Click here for a copy of the study.