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By Liam Verster
34,496 businesses at risk of closing

New report paints bleak picture for Alberta’s small businesses

Jan 21, 2021 | 1:14 PM

A new report based on results from a survey by the Canadian Federation of Independent Business (CFIB) shows 34,498 small businesses in Alberta are at risk of filing for bankruptcy or permanently shutting down.

CFIB’s report shows the businesses at risk in Alberta, which amount to 22 per cent of small businesses in the province, is part of a nationwide issue. In total, 181,127 businesses in Canada are at risk of closing due to COVID-19 restrictions and the subsequent economic downturn.

However, Alberta’s numbers are cause for concern, as the percentage of small businesses at risk of closing in the Wild Rose province is higher than any other province, and is above the national average of 17 per cent.

CFIB’s report also shows that those private sector businesses at risk of potentially closing for good would leave 2,416,981 Canadians out of a job, with 624,998 of those jobs coming from Alberta alone.

Annie Dormuth, the Alberta Provincial Affairs Director for CFIB, says these figures should be sounding the alarm.

“This is really quite concerning for the overall economic recovery and economic health of the province,” says Dormuth.

“We’re also posting some of the highest numbers in these categories and I think that really points to the fact that, prior to the pandemic, Alberta’s economy has been battered and bruised for five years throughout a prolonged economic recession. Coupled with COVID and the impacts of the pandemic, it’s really putting a lot of our small businesses and local entrepreneurs in a precarious situation and on the brink of closure.”

While all industries have been impacted by the COVID-19 pandemic and subsequent restrictions and economic downturn, Dormuth says the hardest hit sectors have been hospitality, and arts, recreation and information.

“So speaking about hotels, restaurants, caterers, anything to do with tourism, as well as gyms, fitness facilities, one-on-one fitness. All of those sectors are more at risk of closing, and it comes squarely to the fact that their business model and business operations rely directly on in-person sales,” says Dormuth.

She adds those two sectors have been hardest hit in both number of businesses and jobs at risk. Canada’s hospitality industry is at risk of losing 588,822 jobs from 28,083 businesses, while the arts, recreation and information sector has 10,180 jobs representing 204,159 jobs at risk.

While Dormuth and the CFIB are pleased with the provincial government’s decision last week to allow personal and wellness services to reopen, more needs to be done to help the other sectors.

“We are encouraging the provincial government to start looking at a clear pathway to allow these other industries to reopen. We’re hitting a very critical juncture in this prolonged pandemic and impact on businesses, where quite simply [businesses] need to reopen and they need to start making revenue again.

“That is why we’re calling on the provincial government to come forward with a path forward to allow, specifically those businesses in the hospitality and fitness industries, to reopen.”

READ MORE: Province allowing small outdoor gatherings, personal service businesses to open Jan. 18

Along with lobbying the government, CFIB is encouraging Albertans to support local by choosing to shop at small businesses, rather than at the big box stores or chain restaurants.

by Liam Verster