Canadian small- and medium-sized enterprises (SMEs) weathered the recession and are now restoring jobs and business activity, despite a slow and fragile economy, according a report released today by the Canadian Federation of Independent Business (CFIB).
In its Survival of the Smallest report, the CFIB reports many SMEs had to make changes to survive the downturn, including working longer hours (62%), finding new customers in local markets (50%) and introducing new products or services (46%).
Additionally, the report noted that SME owners did not hesitate to make personal sacrifices to overcome the challenges posed by the economic downturn, even if it meant cutting their own salary (43%).
“It was a classic lemons-and-lemonade situation,” said CFIB president Catherine Swift.
“Instead of taking an axe to their employment rolls, which was the easy way out for many large corporations, small businesses made the best out of a bad situation. They became innovative and creative in order to sustain and grow their business.”
While most small firms survived the recession, they didn't come out unscathed. Forty-two per cent had to resort to some form of temporary or permanent downsizing.
However, a previous CFIB report showed that, during that time period, larger businesses lost more payroll employment than smaller ones.
Based on survey comments and results, the CFIB has recommended that governments remove as many growth barriers as possible and reduce payroll taxes, which would assist SMEs in creating jobs.
The report recommends avoiding or minimizing payroll tax increases, reducing red tape, and addressing interprovincial and foreign trade barriers as some of the most harmful growth barriers for SMEs.
Jennifer Harrison
Twitter: JHarrisonBIV