As restrictions continued to loosen and more businesses opened up, Canadian businesses continued to feel the impact of mandated closures and reductions in service this summer due to the COVID-19 pandemic.
The Canadian Chamber of Commerce, with help from Deloitte Canada, surveyed businesses between May 30 and July 3 to determine the financial repercussions of the pandemic and to gauge the economic and operational outlook as the pandemic continues to affect the economy. The chamber released the results in the second wave of the Canadian Survey on Business Conditions.
Business see profits decrease; some worry about survival
Business revenues have been impacted in a big way, according to the survey. Not only did businesses have to deal with mandatory closures or dramatically reduced crowds, but supply chains and distribution also affected businesses’ abilities to meet their customers’ needs. Comparing April 2019 and April 2020, revenues were down for 70% of businesses. Thirty-five percent of those businesses reported that their revenues were down more than 50% over the previous year.
Facing such revenue drops amid the ongoing pandemic economy, a significant percentage of businesses also are worried about their ability to survive until the economy recovers. Thirty-percent of businesses that responded to the survey said they did not believe they would be able to weather another year of the current political climate, and additional 33% said they were unsure of whether they would be able to withstand another year of the pandemic economy. Only 37% of businesses responded that they were confident that their businesses could last 12 months or more of the current situation.
Minority-owned businesses seem to be most on affected. While 29% of businesses owned by people who were not minorities, 29% said they felt they could not last 12 months or more of the pandemic economy. In contrast, 46% of LGBTQ-owned businesses, 43% of businesses owned by visible minorities, 40% of businesses owned by people identifying as First Nation, Métis or Inuit, 35% of immigrant-owned businesses and 30% of women-owned businesses said they could not survive a year or more.
On the bright side
How Canadian businesses are surviving the pandemic
To stay afloat during the pandemic, Canadian businesses have deployed a variety of strategies. Sixty-four percent of businesses reported taking advantage of government programs and emergency funds. Of those, 43% took advantage of the Canada Emergency Business Account, and 23% took advantage of the Canada Emergency Wage Subsidy, and an additional 18% took advantage of the temporary 10-percent Wage Subsidy. Five percent relied on programs from financial institutions, and 3%utilized Canada Emergency Rent Assistance. Only 16% of businesses reported using rent and mortgage deferral programs.
Businesses also have gotten creative about the ways they are managing customer relationships during the pandemic. Half of businesses said they added new ways to interact with or sell to customers, such as curbside pickup and physical distancing between staff and customers. Twenty-seven percent of businesses said they altered the products and services they offered to continue to serve customers, and 25% said they utilized ecommerce or virtual connections to customers. Mandated government closures affected 26% of responding businesses.
Internally, businesses have altered their operations. While some businesses have shown that they are bringing employees back to work in house – 18%of businesses reported having their entire workforce working remotely in March versus 14% in May – most businesses acknowledge that remote work will continue for many employees. The percentage of businesses responding that less than 20% of their workforce was remote dropped from 85% to 74%, and the remaining percentages of businesses with employees working remotely shifted upward in every category.
Moving forward in a pandemic economy
The Canadian Survey on Business Conditions also shows that the pandemic has led to some short- and long-term effects, as businesses look to keep employees safe and virus-proof their operations. Twenty-six percent of businesses said they are altering their physical work space to create greater physical distances between employees. Eleven percent of businesses said they are giving more employees the opportunity to work from home, and 10 percent of businesses are investing in telework systems to make remote work more secure.
To reduce touchpoints with customers, 21% of businesses said they are increasing touchless pickup or delivery options, and 18%said they are increasing their online sales capacity. Business also reported that they are looking to improve sanitation of workspaces, invest in personal protective equipment and diversify supply chains to reduce pandemic disruptions.
Undoubtedly, the coronavirus pandemic has upended the economy, and Canadian businesses have felt the repercussions. Most are making changes to the way they do business to remain competitive, and they will continue to do so to, hopefully, withstand the duration of the pandemic’s economic impacts.