How COVID-19 affected Canadian Economy

The beginning of the COVID-19 pandemic affected the world in many ways beyond our control. Travel restrictions are put in place. Cities go into lockdown. Governments restrict citizens to go out. Businesses close down and file for bankruptcy. Shortages in our supply chain. Employees are let go. Citizens are encouraged to stay home and work from home for those who have been retained. The list goes on.

In fact in Canada alone, 30% of the pre-pandemic workforce lost their jobs according to the Department of Finance Canada. On the other side, our CO2 emissions plummeted, and household savings have gone up. But, there has been a major decline in economic activity.

COVID-19 in 2022

It still is within our midst with different variants causing uncertainty to the end of all this tragedy. More people are getting vaccinated. Governments are easing the reopening of their economy. We are  adapting to the new normal, albeit with extreme caution and thoughtfulness with our activities.

Jump Starting Canadian Economy

With governments aiming to boost the Canadian economy back up, one of the common things you’ll find in each party’s recovery plan is the support for the hardest-hit sectors: small businesses. They recognize that the role of small businesses is crucial to bring our country back to life.

As of December 2019, there’s about 1.23 million businesses in Canada and small businesses take up 97.9% of those, only 2.2% are medium-sized to big businesses. Pre-pandemic time (2013 to 2017), there were 96,580 businesses being created every year, and 90,600 had business closures.

Local Businesses Create More Job Opportunities

With the creation of these businesses, there are also more job opportunities for Canadians. In fact, small businesses took about 35.8% of net employment change between 2014 to 2019 and came close to the 38.8% of larger businesses. We can see the direct impact and how small businesses can compare to large businesses when it comes to job retention and creation. When COVID-19 hit, more Canadian corporations laid off employees while many small businesses struggled to keep doors open.

Small Businesses’ Survival Rate

Despite the positive impact of these small businesses to the Canadian economy, their life span only is a maximum of 16 years. Although more businesses open up, more close down as well. Only a few businesses actually make it to their most crucial years: the 2nd or 3rd year. “35.1 percent of businesses in the goods-producing sector and 29.6 percent of businesses in the services-producing sector were still active sixteen years”.

Canadians’ Role to Post-Pandemic Recovery

We can look at this in more ways than one. You would think that we would not have a role to play and that we’re riding the wave of what the Canadian government has for our country’s recovery. NO! In fact, we can choose where our hard-earned money goes and invest it within Canada. We keep hearing Canadians voicing out their appreciation for small businesses that remained open and for continuing to give vibrancy and life in our cities. But action speaks louder than words. How do we actually show our appreciation in a way that impacts small businesses?

By Supporting Local

By doing this, you can have a direct economic impact to keep small businesses open, increase their profitability, create more employment opportunities, and the reemergence of the Canadian economy as a whole. The Canadian Federation of Independent Business created a Small Business Recovery Dashboard, recently updated this January 2022, where you can see how your spending affects businesses’ retention, employment, and sales.

Locate Local to Provide Technology

Our role in all of this is to be the fuel in the shop local movement. With online sales emerging in the local landscape, Locate Local aims to provide technology that can make local businesses your first priority and so you can connect with your favourite local businesses with just a press of a button.