More than half of small firms have begun laying off staff, with a quarter reporting they have already been forced to lay off their entire workforce

Nearly a third of small businesses in Canada may close within the month without more COVID-19 (coronavirus) relief, says the Canadian Federation of Independent Business.

The organization surveyed 11,000 small business owners and found that  60 per cent of them have seen a significant drop in sales, with more than one in three reporting a reduction greater than 75 per cent.

“More than half of small firms have begun laying off staff, with a quarter reporting they have already been forced to lay off their entire workforce,” said CFIB president Dan Kelly in a news release. “At this rate, the only way to prevent massive additional unemployment is for government to introduce a much larger wage subsidy program.

“On top of the 930,000 new Employment Insurance applications filed last week across Canada, many small businesses will be forced to make additional layoff decisions in the next few days. Announcing a wage subsidy now will protect many jobs and keep employees connected to their employers, helping to speed the recovery when the COVID-19 emergency phase is over.”

The CFIB said it is proposing a COVID-19 Job Retention Program that would subsidize wages of employers able to retain their staff. This would cover at least 75 per cent of wages for all employers, up to a cap of $5,000 per worker per month. CFIB proposes the program include the self-employed and small business owners.

The survey said nearly one in three businesses say they can survive less than a month under the current conditions, up from a quarter last week. The average cost of the outbreak for affected businesses has also doubled since last week to $136,000, added the CFIB.

“In addition to these impacts, small business owners are facing a lot of uncertainty and thousands have been calling CFIB with questions,” added Corinne Pohlmann, CFIB’s senior vice-president of national affairs. “The record of employment process is very onerous, especially if a business is forced to lay off all its staff at once. Businesses are looking for ways to keep their staff employed but reduce their operating costs so they can weather the massive disruption. Others want to know what the loss of their business means for them and their employees, how Employment Standards apply to this extraordinary situation and how to access the new government programs that were announced last week.”

The CFIB said the survey found that more than half of small businesses across Canada were already at least partially shut down, led by firms in the service and restaurant sectors.

The full survey results can be found here.

 

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