Half of small businesses in Canada are planning to lay off staff as confidence levels hit a record low amid the coronavirus outbreak.
The Canadian Federation of Independent Business (CFIB) said that its measure of small business confidence has cratered to the lowest level on record and is now at depths not seen during past recessions. In a news release, CFIB said this spring is shaping up to be an unprecedented time for Canada’s economy.
"March 2020 has turned out to be a month like no other in Canada's economic history… Small business sentiment has never been this low in the Business Barometer's 32-year history, including during the 2008 and 1990 recessions," CFIB said.
The gauge of business sentiment plunged 19 points to 30.8, extending its drop from February’s 60.5, and hit every industry and province.
Perhaps more troubling are hiring intentions among small business owners. According to the CFIB, intentions have ground to a halt, with only 5% of small business owners planning to add staff in the next three months and 50% planning for layoffs.
The CFIB is underscoring the need for government support to ensure that small businesses can bring back workers whenever the economy stabilizes.
As part of Ottawa’s initial $82-billion plan to tackle the virus, employers are being offered a 10% wage subsidy in a bid to encourage businesses to keep employees on their payroll. The subsidy is dwarfed by similar programs in Europe, including Denmark’s offer of 75% subsidies.
