Purchasing power to further weaken as small businesses fold

The coronavirus is stretching Canadian households’ budgets to the breaking point

Purchasing power to further weaken as small businesses fold

Canadian purchasing power will significantly decline in the near future as nearly one-third (32%) of small business owners admitted that they are not sure they will reopen after the COVID-19 crisis, according to a new study.

The recent survey by the Canadian Federation of Independent Business (CFIB) also found that on average, small businesses lost around $160,000 due to the fiscal and economic ravages of the pandemic.

A separate poll has warned that 47% of Canadians cannot afford to miss even just one day of work as they have neither back-up funds nor benefits. Another 23% also fear that they might lose their current jobs, the Financial Post reported.

“The income level of these people is simply not going to be there, so the question is how can governments respond to it,” pollster John Wright said.

CFIB president Dan Kelly hailed the federal government’s announcement of a wage subsidy – which will be at a maximum of $847 per week – as a vital component of keeping the small business sector liquid.

“Putting in place a 75% wage subsidy was terrific news and we are already hearing from business owners who have delayed layoffs as a result,” Kelly told BNN Bloomberg in an interview.

Fully 68% of the respondents to the CFIB surveyed welcomed the subsidy.

“Stress among business owners is very high and it’s critical that the wage subsidy and other measures are accessible to as many businesses as possible to avoid a flood of permanent closures in the weeks and months to come,” Kelly added.