(Bloomberg) -- Canadian firms continue to struggle as debt loads and uncertainty mount, according to a survey by the country’s statistics agency.
About 44% of businesses say they’re unable to take on additional debt, while almost a third don’t know how long they can continue to operate at existing revenue and spending levels, Statistics Canada said Friday.
The findings are consistent with data from the Bank of Canada showing growth in non-mortgage loans for businesses, which was rising at a 20% year-over-year clip at the start of the pandemic, has since slowed to just 4.4% in September.
“With the second wave of Covid-19 resulting in additional business lockdowns, there is no additional capacity for small firms to take on new debt,” Dan Kelly, chief executive officer at the Canadian Federation of Independent Business, said by email. The average small business has borrowed about C$110,000 ($83,700) because of the pandemic to keep operating, he said.
The Statistics Canada survey was conducted between mid-September and late October and highlights the precarious environment still facing the country’s businesses more than half a year after the initial coronavirus outbreak. Given the recent resurgence of cases that has prompted a return to lockdowns in many regions, the outlook is far from bright.
About 10% of companies still expect to lay-off workers over the next six months, bad news for an economy where 1.1 million workers were without jobs or working significantly fewer hours as of October. One in 20 companies said they were actively considering bankruptcy or closure.
©2020 Bloomberg L.P.
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