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,” said Dan Kelly, CFIB president, in a statement. “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.