Uptick in business bankruptcies just the tip of the iceberg: CFIB

A small business lobby group says commercial bankruptcies are rising in Canada and even more small businesses are at risk of closure.

Statistics Canada data shows small business insolvencies have been on an upward trend since May 2021.

But the Canadian Federation of Independent Business (CFIB) says 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 says 46 per cent of business owners say they would simply stop operating rather than go through the bankruptcy process.

The CFIB also says 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.

Dan Kelly, president of the CFIB told The Sam Laprade Show on Aug. 19 that some member businesses fear they may be winding down operations or going bankrupt after the pandemic recedes. 

“Bankruptcies were lighter during the pandemic in part that the process tp deal with bankruptcies was delayed,” he said. “But now, with most restrcitions behind us, businesses are loking at the damage left behind, and it's not pretty.”

Kelly said only half of small businesses are back to normal. 

“The data we released, 17 per cent of businesses believe they won't make it,” he added. 

Listen to the full interview with Dan Kelly below:

This report by The Canadian Press was first published Aug. 18, 2022.

With files from CityNews Ottawa.