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Nearly a third of small businesses may close within the month without more COVID-19 relief

CFIB calls for a 75% wage subsidy to retain employees

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Toronto, March 24, 2020 – The COVID-19 outbreak is quickly becoming a disaster for small businesses, warns the Canadian Federation of Independent Business (CFIB). A full 60 per cent of small firms have seen a significant drop in sales, with more than one in three reporting a reduction greater than 75 per cent, according to a new study of nearly 11,000 small business owners taken over the weekend.

“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. “At this rate, the only way to prevent massive additional unemployment is for government to introduce a much larger wage subsidy program.”

While last week’s economic measures were welcome initial steps, CFIB 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.

“On top of the 930,000 new Employment Insurance applications filed last week across Canada, many small business will be forced to make additional layoff decisions in the next few days,” Kelly noted. “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.”

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.

“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 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.

In addition to the urgent need for a bigger wage subsidy, governments should consider:

  • Simplifying and providing immediate access to EI Work-Sharing for all employers.
  • Ensuring that the self-employed receive some income support due to loss of income as a result of COVID-19.
  • Providing tax relief by deferring sales taxes, forgiving the payment of income, sales and payroll taxes for the next three months for those particularly hard hit, delaying all filing deadlines, and delaying upcoming carbon tax and CPP hikes.

“While governments are working hard on the health emergency created by COVID-19, much more needs to be done to address the related economic emergency,” Kelly concluded. “It is essential that governments move quickly to safeguard local jobs and our economy by putting in place measures that will allow businesses to survive these unprecedented circumstances.”

Read the full survey results for more details.

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry and region. 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.

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