Feds say more than 740K jobs lost to COVID

Amid COVID-19 lockdowns and restrictions, at least 740,800 jobs were lost in small businesses, says the Department of Industry.

According to Blacklock’s Reporter, researchers warn the damage was so deep it will be some time before the full extent of losses is realized.

“Private sector employment decreased in all the provinces,” a department report revealed, adding, “Among small business, employment decreased in all provinces.”

Analysts found small business had a pre-pandemic payroll of 7.7 million employees — about 68% of Canada’s workforce.

“In 2020 the Covid-19 pandemic posed significant challenges,” said analysts.

“The net employment change among small business was minus 740,800,” a decline of 9%.

Across the provinces, Prince Edward Island saw the worst loss of small business jobs at 13%. BC followed with 12%, then Alberta at 11%, Quebec saw 9%, Saskatchewan and Newfoundland & Labrador had 8%, Ontario and Nova Scotia had 7%, Manitoba 6% and New Brunswick had 4%.

“How many businesses appear and disappear each year? In 2020 the Covid-19 pandemic likely impacted business entries and exits,” said the report.

“However since the most recently available data on business creation and destruction are for the year 2018, these impacts are beyond the scope of this report.”

Data shows small operators — defined as those with fewer than one hundred employees — went into the pandemic with 1,198,632 small businesses. Due to the closure of bankruptcy courts as a pandemic precaution, the number of collapsed small businesses is currently unknown.

Canada’s last recession in 2008 saw 158,000 businesses lost.

“In my view, there are hundreds of thousands of zombie businesses, businesses that are essentially dead but haven’t finalized the closure process altogether,” Dan Kelly, CEO of the Canadian Federation of Independent Business (CFIB), testified at 2020 hearings of the Senate national finance committee.

“They have a paper sign saying, ‘Temporarily Closed. We are going to see those businesses now formally fail, more boarded-up signs.

“Our research shows one in seven businesses will fail before the end of the pandemic.”

Kelly acknowledged small businesses and entrepreneurs “fail all the time in ordinary, good economic times,” but said those businesses are usually replaced by new businesses coming in to “fill the location.”

“We are not seeing that,” said Kelly.

“We are seeing greater numbers of business failures that actually haven’t been reported. We’re only at the tip of the iceberg because actual bankruptcies have been slowed also by COVID-19.”

A report released by the CFIB on August 31— compiled of periodical questionnaires from up to 4,950 small businesses nationwide — estimated small businesses that did survive took on a combined $139 billion in debts.

The report found almost a third of newly indebted businesses were “drawing on credit cards and the same number are using their personal savings” and half of entrepreneurs said repaying their debt was “one of the biggest challenges their business is facing on the road to recovery.”

Read More: Feds say more than 740K jobs lost to COVID

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