TORONTO – Canada’s struggling independent businesses in the arts, entertainment and recreational sectors are at the highest risk of permanently closing due to COVID-19, according to the Canadian Federation of Independent Business.
A new report released by the advocacy group says while some Canadian small- and medium-sized businesses have already been forced to close, it anticipates another one in seven risk going under because of the virus.
Topping those projections is the cultural sector, which includes an array of private businesses, ranging from fitness gyms to live concert venues, film distributors to news organizations.
Roughly 30 per cent of those are at risk of closing, the CFIB found based on a survey of its members who say they’re “somewhat” or “very likely” to wind down their operations due to COVID-19.
If those closures materialized, mid-range estimates suggest around 10,800 businesses across the country could be impacted in that sector alone.
The hospitality sector, which includes restaurants, hotels and caterers, trailed closely behind with about 27 per cent of respondents saying they see a grim future.
Closures in those key sectors would have a ripple effect through various parts of the workforce, affecting bartenders, wait staff, local musicians, tech workers, and food and drink supply chains.
Ryan Mallough, CFIB’s director of provincial affairs for Ontario, says many cultural businesses are under extra financial pressure because their profit models were never meant to sustain at around 50 per cent capacity.
“Reopening unto itself does not fix what they’ve gone through over the past four or five months,” he said.
“It’s not just that these places are closed right now, it’s that when we get to a time where they can open, they’re just not going to be there anymore.”
Mallough says CFIB members whose businesses rely on large gatherings also felt that normalcy won’t return until a vaccine is available, which some have projected at being late spring or early summer 2021 at the earliest.