Many of Canada’s small businesses have survived the worst of the pandemic, but the threat of a fourth wave and a mix of new restrictions has weakened the outlooks of entrepreneurs.
The Canadian Federation of Independent Business (CFIB) said its latest business barometer, which measures the outlook of entrepreneurs, fell “steeply” in September — with its 12-month outlook dropping nine points to 57.8 and its three-month outlook losing more than 12 points and now at 43.2.
Both dips represented “the biggest decrease since the start of the pandemic,” in March 2020, a release said.
“Small businesses are not back to pre-pandemic sales or staffing and are now facing a second tough winter with lower-than-normal cash reserves and higher than normal debt,” said Simon Gaudreault, vice president of national research at CFIB.
All provinces witnessed a drop in optimism on both the long- and short-term indexes, with businesses in Ontario and Quebec seeing the biggest slides, dipping 13 and 12.5 points, respectively.
Almost all of the short-term indices currently range from 43 to 50. The exceptions were Prince Edward Island, which sits at 34.8 for its three-month outlook, and British Columbia, which sits on the higher end at 54.9, the report said.
By industry, all sectors’ outlooks worsened. The outlook for professional services fell by 15 points, followed by hospitality at -11 points, and construction at -9 points — with the release noting that all three sectors experienced the biggest short-term drops. At the same time, agriculture (-11 points) and retail (-10 points) saw the greatest long-term decreases in their outlooks.
According to a report from RBC Economics, challenges facing Canada’s small businesses include added debt loads, labour shortages, supply-chain disruptions and the impending end of federal support programs, as well as the spectre of a fourth wave.
However, the RBC report said extended support programs, and funding for training and technology adoption might help. So, too, could measures that address skills shortages.
Indeed, with the majority of small businesses struggling, CFIB is asking the federal government to extend wage and rent supplements set to expire near the end of the month.
The Liberals can give the aid package a few more weeks of life without the need to go to Parliament.
The federal budget bill passed at the end of June includes a provision that cabinet can extend benefits until Nov. 20, should the circumstances require.