Meanwhile, in the real economy, where companies with fewer than 100 employees are the largest economic driver, employing two-thirds of Canada’s private labour force, survival prospects are getting worse. See Small businesses rack up loans to survive:
The Canadian Federation of Independent Business (CFIB) estimates that, based on a recent survey of its members, about seven in 10 small businesses have taken on new debt because of the pandemic, with an average debt of almost $170,000 each.
But there is a huge disparity between industries: Businesses such as restaurants and gyms, which have faced more operating restrictions to stop the spread of COVID-19, have taken on much more debt than those whose work can more easily be done from home. About nine in 10 businesses in the hospitality and recreation sectors said they incurred debt related to the pandemic, with average debt loads of more than $200,000.
“This doesn’t look like there’s going to be a quick recovery based on the amount of debt that businesses have taken on,” said Laura Jones, executive vice-president at CFIB. “Even if sales come back in the summer, they’re still worried about outrunning their debt.”
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