BC business bankruptcies are on the rise.
That’s according to the Canadian Federation of Independent Business (CFIB).
Senior provincial policy analyst Jairo Yunis told Vista Radio rising operating costs coupled with a lack of demand and interest rate hikes are pushing more businesses to the brink.
“17% of small businesses are actively considering filing for bankruptcy or winding down their business. Only a few business owners would use the bankruptcy mechanism if they were to permanently close down.”
Yunis added more entrepreneurs than ever before are facing an uphill climb just to stay afloat.
“90% of them are having a difficult time keeping up with the cost of gas, insurance, and inputs while 85% of them are struggling to keep up with government costs like higher payroll taxes and WorkSafeBC premiums.”
Recent data shows over half (51%) of BC business owners are yet to return to normal, pre-pandemic levels while 56% of businesses in the province are still carrying pandemic debt.
“BC’s average debt is very high compared to other provinces. The average small business in BC took almost 200 thousand dollars in loans,” said Yunis.
Furthermore, while entrepreneurs are doing everything they can to keep the doors open, Yunis stated they can’t do it alone.
The CFIB mentioned the provincial government has the tools to assist small businesses further by refunding WorkSafeBC’s $3.4 billion dollar surplus as well as providing school tax property relief.
“BC businesses are very resilient. They want to resort to the last mechanism they can use so that they can stay afloat but they are also waiting for the government to step up and make sure the efforts made in the last two years do not go in vain.”
The CFIB is urging the federal government to help ensure the viability of small businesses and help keep their operating cost down.
The recommendations include:
- Increasing the forgivable portion of the Canada Emergency Business Account (CEBA) loan to at least 50%
- Extending the repayment deadline for CEBA loans to qualify for partial loan forgiveness to December 2024
- Increasing the small business deduction to $600,000 (currently $500,000)
- Freezing planned federal tax hikes, including the 2022 increase in CPP, EI, carbon and liquor taxation, and reducing the provincial payroll tax burden
- Immediately implementing the promised reduction in credit card fees for small merchants