British Columbia

Business owners fear it will take years to recover from COVID-19 pandemic — and many may not make it

A recent Insights West survey of nearly 600 businesses found that 31 per cent of owners fear they won't recover from the COVID-19 crisis.

31% think they could close for good, survey shows, while CFIB says relief loans only drive owners into debt

Michel Ibrahim fears it could be five to 10 years before his barber shop in West Vancouver is back on its feet following the COVID-19 pandemic. (Jon Hernandez/CBC)

Lined with soccer jerseys, banners, flags, family photos and newspaper clippings, Michel Ibrahim's West Vancouver, B.C., barber shop is a community cornerstone.

Ibrahim opened it after fleeing a war-torn Lebanon. But after three decades, he says the foundations are starting to buckle.

"Not one time in the last 30 years have I been behind my rent," Ibrahim told CBC News. "But this time, I'm worried about it."

Like thousands of small businesses owners across Canada, Ibrahim has been forced close shop amid public health orders. The dollars dried up overnight, but the bills keep piling up. He suspects it could take years for him to recover — if at all.

Ibrahim closed his barber shop mid-March following orders from provincial health officer Dr. Bonnie Henry. (Jon Hernandez/CBC)

"To have the business the way it was, back in 2019, I would say it will take five to 10 years," said Ibrahim. "Of course I don't like it, but I have to respect the fact that there's a national call."

Mounting rent and forced closures

A recent Insights West survey of nearly 600 businesses found that 31 per cent of owners fear they won't recover from the COVID-19 crisis.

The results of the survey, which have a plus-minus margin of error of about 4.1 per cent according to CBC News' research department, have been echoed by the Canadian Federation of Independent Business (CFIB).

Like many owners, Ibrahim is considering applying for an emergency loan from the from the federal government. He already spent thousands of dollars paying rent on April 1.

"I don't have the money for May 1, let's put it that way," he said. "Landlords need their money, and I need my doors open to pay the landlord."

CFIB president Dan Kelly suspects thousands of businesses across Canada won't rebound from current economic hardship, largely because the relief loans offered by the federal government will drive owners into debt.

"It's really, in my opinion, really unfair that business owners are asked to shoulder the full burden of the cost of shutting down their companies," he said.

Ottawa will forgive up to $10,000 on $40,000 loans, as long as the difference is paid off.

Provincial relief needed, says CFIB

The CFIB has commended the federal government on recent policies like the 75 per cent wage subsidy.

However, it's urging the provincial government to ramp up funding for business owners burdened by pricey lease agreements.

Currently, the provincial government is offering a series of tax breaks and deferrals to commercial landlords and tenants who are struggling to pay the bills.

"Already, many of these small businesses operate on very small margins," said Kelly. "We're pushing provincial governments to come to the table to provide some relief to businesses that have been shut down where rent is a big issue. We need to continue to support these firms to get them across the finish line."

The province is in the midst of developing a long-term economic recovery plan. Owners like Ibrahim say the support can't come soon enough — but he's still trying to stay positive.

"Business-wise, it's a bad feeling. Personal-wise, it's anger," he said. "Health-wise, I'm happy."

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