TORONTO — A small business lobby group says commercial bankruptcies are rising in Canada and even more small businesses are at risk of closure.
Data from the Office of the Superintendent of Bankruptcy Canada shows small business insolvencies have been on an upward trend since May 2021.
But in a report Thursday, the Canadian Federation of Independent Business said its own survey data indicates only 10 per cent of Canada’s small business owners would file for bankruptcy if their business was no longer solvent.
It said 46 per cent of business owners say they would simply stop operating rather than go through the bankruptcy process.
“Official Canadian data on small business bankruptcies doesn’t account for zombie companies or businesses that would rather wind down than file for bankruptcy,” CFIB chief economist Simon Gaudreault said.
“Our research provides a broader perspective on business insolvencies in Canada and shows that the rising number of small business bankruptcies is just the tip of the iceberg.”
CFIB said its data shows 54 per cent of business owners are yet to return to normal, pre-pandemic revenue levels and 62 per cent are still carrying pandemic debt.
The group also said more than one in six Canadian small business owners say they are currently considering going out of business.
The lobby group wants government support to help Canada’s small business sector get through the next few months and deal with challenges like pandemic-related debt and supply chain issues.
This report by The Canadian Press was first published Aug. 18, 2022.
Note to readers: This is a corrected story. A previous version misidentified the source of data on the growing number of insolvencies.
