The trend in business deficiencies has increased by 41.1% between 2022 and 2023

However, Simon Gaudre, chief economist and vice-president of the Canadian Federation of Independent Businesses (CFIB), says the sharp rise in bankruptcies represents just the “tip of the iceberg.”

A few years ago, fewer than 10% of CFIB members who were considering closing their businesses cited bankruptcy as a reason.

The rest sold, liquidated, or transferred their businesses to other hands without resorting to extreme measures.

The most significant factor influencing the current situation is the growing repayment of CEBA, the federal loans issued by the government during the pandemic. As of January 19, 2024, these loans went from being interest-free, with no monthly payments, to being term loans for three years, with 5% interest, which must be paid each year. But of the 898/271 debtors, almost 25% were unable to pay on time, and the CFIB's demand to extend the repayment period was ignored by the feds. And this, according to Godre, was "the straw that broke the camel's back."

Anastasia Chupina