Finance SME

Canada’s small businesses still struggling due to pandemic

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New research released today by Payments Canada, the organization that owns and operates Canada’s payment systems, finds that many of the country’s small businesses are still struggling with financial, operational and payment challenges that arose due to the pandemic.

The new study, Payments Behaviour Tracker – Business Survey, found that 37 per cent of those surveyed are struggling with negative impacts on sales and 33 per cent are having trouble managing margins and profits, and overall business spends. Managing cash flow was reported by 27 per cent of those surveyed, and 23 per cent are having issues with employee recruitment.

The news from the survey was not all negative. While there are still issues around sales for some small businesses, 20 per cent of those surveyed reported that sales were improving, 12 per cent saw improvements in cash flow management and 10 per cent reported margin and profit, and overall business spend improvements.

The impact on payments due to the pandemic was also significant, as the pandemic accelerated the adoption of electronic payment methods. Use of cash payments dropped by 33 per cent, and cheques sunk by 25 per cent. Interac e-transfer payment usage jumped by 33 per cent, virtual currencies rose by 25 per cent, and electronic funds transfers increased by 23 per cent.

Businesses also reported the amount of payment fraud attempts also rose since the pandemic began, however, 51 per cent of those surveyed felt better prepared to recognize payment fraud scams. As well, 47 per cent reported they are more aware of how to protect themselves from scams.

“Many Canadian small businesses continue to face financial and operational challenges as we emerge from the pandemic. The shift away from paper payments to electronic payments is ongoing. Unfortunately, many small businesses have experienced an increase in payment fraud attempts, but indicate that they feel better prepared to identify fraudulent activity,” said Tracey Black, president and CEO of Payments Canada with the reports release. “The results of the study confirm that many small businesses have demonstrated incredible resilience and have continued to innovate and adapt to changing market dynamics.”

The study was conducted via an online panel between March 28 and April 8, 2022 with 501 small businesses (under $10 million in revenue).


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