The Canal and Rivers Trust is closing the majority of the Shropshire Union Canal towpath through the town for ten weeks from July 5 to September 10.
The closure will also see the visitor moorings along the stretch closed from the Victoria Bridge to the Market Drayton Aqueduct.
Lisa Machin, director of the Talbot Wharf boatyard in Market Drayton, said the closure would be a hammer blow to the summer trade, preventing visitors from mooring in the town and visiting shops and restaurants which have been starved of trade during lockdown.
Mrs Machin said: "They are making it an all-weather surface, which is great that they want to upgrade it but they have picked the very worst time ever they could choose to do it.
"It is basically the full length of the canal that goes through the town. Boats that would normally moor up and walk round the town, they won't be able to do that.
"We will have lost two months of summer trade after a pandemic. Last summer was really a write-off. We had a few weeks in July where we had some boats going past but basically all of last year was a write off."
She added: "Now we are going to have no one stopping until September; it is frustrating to say the least."
Mrs Machin questioned why the work could not take place after the tourist season.
She said: "We will be open but a lot of people won't plan to stop. They will carry on, so we will miss that trade.
"It is not just for us, it is for the town as well. These boats they stop and use the pubs, support the markets, there will be a knock-on effect into the town but I expect there is no way they can change it now.
"I understand they want to improve the facilities and make it better for visitors but the timing is the absolute pits."
Town mayor, Councillor Roy Aldcroft, expressed surprise at the move and said that the matter could have been discussed with the town council.
He said: "It is right across the summer period which is one of the busiest times. We get about 1,200 boats come through in the summer period. That is a lot of people visiting the town, the town shops, all the markets, all the other services we offer, and this work at this time will disrupt our tourist industry when we need to get back on our feet.
"So I was very surprised the Canal and Rivers Trust did not contact us about how they would go forward with these repairs."
Councillor Aldcroft said that ideally the work would have been scheduled for after September when the tourist rush has diminished.
The Canal and Rivers Trust has been contacted for comment.