Statistics Canada figures show that small- and medium-sized businesses lost about $60 billion during the first year of the COVID-19-related lockdowns and travel bans, according to Blacklock’s Reporter.
The figure, drawn from companies that applied for interest-free $60,000 loans under the Canada Emergency Business Account program, was the highest yet calculated by any federal agency on the impact of the pandemic.
“From 2019 to 2020 approximately 47% of all small- and medium-sized businesses, those with annual salary expenses of less than $1.5 million, experienced a drop in gross profits totaling a loss of nearly $60 billion,” analysts wrote.
Meanwhile, the Canadian Federation of Independent Business put private-sector losses at just over twice as much — at least $139 billion — in 2021.
The report, Borrowing, Repayments And Bankruptcies By Industry: Results From The Canada Emergency Business Account Program, says restaurateurs and hotelkeepers saw revenues fall “anywhere from about 30 to 60%.”
“This was due in part to successive waves of health restrictions,” it said.
Meanwhile, retailers, builders and manufacturers saw declines of “roughly 20 to 25%” and recovered more quickly, the report said.
“Many of the businesses that applied for and received funding were in client-facing industries,” analysts wrote.
Of 898,271 borrowers, StatCan said only 6,343 filed for bankruptcy but noted the figure was deceptively small since loans are not repayable until Dec. 31, 2026.
“One-fifth or 19.9% of businesses reported not knowing if they would have the liquidity or access to credit to repay the loan,” Repayments And Bankruptcies said.
Still, another 14.5% said they definitely not have the cash to repay the loans now charged at 5%.
The loan program paid out $49.2 billion.