The May 7 expiration of vital federal COVID aid programs may see enterprises winding down their operations
Despite the easing of COVID limitations, around one-fourth (24%) of small business owners' earnings are currently hampered by a delayed return to work by downtown workers.
This is according to the Canadian Federation of Independent Business (CFIB), which reports that certain industries, such as hotels (46%), personal services (31%), enterprises and administrative administration (29%), and retail (28%), have felt the brunt of the pandemic.
"The pandemic caused many businesses and governments to transition to a hybrid work model, leaving many downtown cores empty. Many local businesses rely on workers returning to in-person work. At a time when only 40% of businesses are making normal revenues and 65% are dealing with pandemic-related debt, consumer spending is more important now than ever," Corinne Pohlmann, Senior Vice President of National Affairs at CFIB, said.
In general, three out of five (60%) small company owners felt that the government and big business should work harder to get their employees back into downtown areas.
When it comes to firms whose sales have been damaged by a lack of workers in downtown cores, this number rises to nearly four out of five (84%).
Many industries, particularly retail and hospitality, are expecting sales and revenues to increase as the weather warms. Due to a shortage of customers and the expiration of important federal COVID aid programs on May 7th, many businesses may struggle to survive.
"Programs like the Canada Recovery Hiring Program are retroactive, meaning applications will be accepted up to 180 days after the end of a claim period. However, business expenses beyond May 7 will not be covered," Pohlmann said. "The lack of financial relief and consumer demand may lead to more businesses struggling to make ends meet and some may end up winding down their operations."
The CFIB continues to lobby the government to help small businesses lower their COVID debt burdens by increasing the forgivable component of their CEBA loan to at least 50% and extending the repayment deadline for another year.