Lots of zombie businesses out there amid ongoing Ontario lockdown: CFIB CEO
The Canadian Federation of Independent Business (CFIB) warned that it will have to revise business closure estimates, just hours ahead of the Ontario government's announcement of new COVID-19 restrictions.
“I don't know how many businesses are going to survive, quite frankly,” Dan Kelly, CFIB president and CEO, said on Tuesday morning. “We at CFIB did an earlier estimate of 160,000 permanent business failures before the end of that pandemic. That’s seeming light to me right now and we're hoping to come up with some new data next week.”
Later Tuesday, Ontario’s government announced an order requiring residents to stay at home and restrictions on non-essential retail hours to between 7 a.m. and 8 p.m.
Ontario’s lockdowns crushing revenue has been one issue. However, Kelly adds that it is also the debt that business owners have been accumulating to fund operations that will be a concern. It has been cited as the biggest issue for CFIB’s 110,000 members across the country, Kelly said.
“There are lots of zombie businesses out there right now whose future is just not clear,” Kelly said. “We think that we’re just at the tip of the iceberg and as the spring rolls on, the debt is going to choke the life out of many of these businesses.”
Kelly said further supports are needed to address debt, pointing to the federal government’s $100 billion in new stimulus spending as a potential lifeline to take away some of the debt burdens these businesses have to shoulder.
“If we're going to lock those people down and tell businesses you've just got to suffer until this is over, it's deeply unfair to expect business owners to eat the entire cost of that and sadly… that's what's happening.”