Immigrant-owned businesses on average received a higher dollar value of government support programs than Canadian-born owned businesses during the COVID-19 pandemic

Released: 2024-03-06

The COVID-19 pandemic totally disrupted our lives and, by extension, the world of business. A new study, "Use of Government COVID-19 Liquidity Support Programs by Immigrant-owned Businesses and Those Owned by Canadian-born Individuals," found that immigrant-owned businesses were more likely to be affected by the pandemic and the associated lockdowns. This is because these businesses tended to be smaller and concentrated in industries where in-person contact was required, such as a restaurant or a small shop. Further, they used more government support on average than businesses owned by Canadian-born individuals after controlling for their characteristics.

Shortly after the onset of the pandemic and the associated economic and social lockdowns in March 2020, government assistance programs were offered to individual Canadians and businesses to help alleviate the effects of the economic disruption. Businesses could apply for an emergency wage subsidy, rent assistance or a rent subsidy, or a loan of up to $40,000 through the Canada Emergency Business Account (CEBA).

Businesses owned by immigrants are more likely than those owned by the Canadian-born population to seek help with rent or other expenses, but not so much with wages

Approximately one in four businesses in Canada were owned by an immigrant (see Note to readers) from 2019 to 2020. However, at an aggregate level, immigrant-owned businesses received approximately one-third of the total loan provided by the CEBA and 37% of the Canada Emergency Commercial Rent Assistance and the Canada Emergency Rent Subsidy (CECE).

Conversely, immigrant-owned businesses were less likely to receive the Canada Emergency Wage Subsidy (CEWS), receiving over one-tenth (14%) of total wage subsidies.

Chart 1 
Shares of ownership and dollar value of COVID-19-related business liquidity support programs

After controlling for the differences in characteristics between businesses owned by immigrants and those owned by Canadian-born individuals, the study found that immigrant-majority-owned businesses were on average more likely than businesses owned by Canadian-born individuals to receive government support from CEBA and CECE but less likely to benefit from the CEWS. Immigrant-majority-owned businesses also received on average a higher dollar value of support from CECE. However, the amount of support received from the CEWS was not significantly different between immigrant-majority-owned businesses and businesses owned by Canadian-born individuals. Overall, if combining all four support programs, immigrant majority-owned businesses received a value of total support about 6% higher on average than businesses owned by Canadian-born individuals received.

Products

The study "Use of Government COVID-19 Liquidity Support Programs by Immigrant-owned Businesses and Those Owned by Canadian-born Individuals," part of the Analytical Studies Branch Research Paper Series (Catalogue number11F0019M), is now available.

Contact information

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