Canadian small businesses face continued struggles from pandemic headwinds 

New research by Payments Canada has revealed that Canadian small businesses continue to navigate through financial, operational and payment-related challenges since the pandemic broke out. The new study, the Payments Behaviour Tracker – Business Survey (Wave 1, 2022), explores the trends, sentiment and outlook for Canadian small businesses (with total revenue of less than CA$10 million) that make up 98% of all businesses in Canada. The study incorporates insights from interviews conducted from March 28 to April 8, 2022, through Leger’s online panel with 501 businesses. 

Key study findings 

Small businesses continue to grapple with financial and operational challenges 

The study indicates that there are a number of challenges and adverse impacts that Canadian small businesses continue to navigate at the two-year anniversary of the global pandemic, including: 

• Negative impact on sales (37%) 
• Managing margins and profits (33%) 

• Overall business spends (33%) 
• Managing cashflow (27%) 
• Impact of regulatory/legislation change (26%) 
• Currency fluctuations in foreign exchange risks (24%) 
• Employee recruitment (23%) 

Canadian small businesses report improvements in certain financial and operations areas 

Conversely, a number of small businesses report improvements in certain financial and operational areas since the onset of the pandemic: 

• Sales (20%) 
• Access to funding (14%) 

• Management of cash flow (12%) 
• Management of margin and profit (10%) 
• Overall business spends (10%) 

“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. “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.” 

Businesses continue the shift to electronic payments 

The pandemic has significantly accelerated the adoption of digital payment methods as evidenced by a decrease in the use of cash (33%) and cheques from deposit accounts (25%). 

Businesses report increased payment fraud attempts since the onset of the pandemic – but feel better prepared  

When it comes to payment-related fraud and cybercriminal activity, businesses report experiencing significant increases in suspicious activity, as well as in their level of preparedness. Many businesses report experiencing an increase in fraudulent activity since the onset of the pandemic directed through different channels, including:  

• Text messages via a smartphone/mobile device (39%) 
• Email (38%) 
• Social media platforms (34%) 
• Online retail merchant sites; e-commerce sites or apps (25%) 

Despite the increase in fraudulent activity directed at businesses, 51% of businesses say that they are more aware of how to recognise payment fraud scams compared to prior to the pandemic, and 47% say they are more aware of how to protect themselves from payment fraud scams.