TORONTO — A new report says Canada’s small businesses now collectively owe more than $135 billion as they struggle to survive the pandemic, a staggering amount experts say could hurt the country’s economic recovery.
The Canadian Federation of Independent Business says the average small business owner has accrued $170,000 in debt, with businesses in the hospitality, recreation and service sectors most indebted.
Laura Jones, CFIB’s executive vice-president, says the amount of debt being racked up by businesses has grown significantly over the last six months.
She says the second wave of COVID-19 and the restrictions that came with it are putting a massive wrench in an already slow recovery for small businesses.
The CFIB report says that three-quarters of business owners who have taken on debt say it will take them more than a year to repay loans, with 11 per cent expressing concern that they may not be able to repay their COVID-19 related debt at all.
Taylor Matchett, a research analyst at CFIB and the lead author of the report, says businesses are more fragile now than at the beginning of the pandemic, and that every effort should be made to keep businesses open while managing the health implications of the virus.