Businesses reopened this past week, allowing non-essential businesses to operate at fifteen per cent capacity, joining essential businesses who are operating at twenty-five per cent capacity.
But Toronto Association of Business Improvement Executive Director, John Kiru, worries the debt incurred by small businesses during the pandemic may cause their inevitable closure post-lockdowns.
“There’s a lot of money they owe, and I’m sure for some, it will be very difficult to get up in the morning and go to work to pay off all that stuff,” Kiru said. “Without for months and months making any money themselves, So I don’t think the closures are quite yet done.”
The Canadian Federation of Independent Business conducted a survey of its members’ experience during the pandemic.
Businesses reported they experienced significant logistical issues, ranging from limited access to resources, surging prices and supply chain issues since January 2020, according to the survey.
The cost for resources, for example, has surged as lumber rose by 100 per cent, while iron and tin increased 50 per cent, according to the CFIB same report.
The survey found that in April 2020, 29 per cent of small businesses reported they were concerned that logistics challenges would impact their business. Forty-one per cent reported concerns last month, according to CFIB’s survey.
This past month, 36 per cent of small businesses reported they experienced higher costs in raw materials and labour. The study found that 26 per cent of small business expect an increase in those costs in the next three months.
Increased costs to resources, shipping delays, and debt accumulation have driven small business owners to raise their prices. Prices are expected to increase by 3.3 per cent by the end of 2021, according to the CFBI.