Survey estimates COVID-19 business losses at $7.8 billion
More than 1,300 businesses with 47,000 employees took part in survey
A survey of Niagara businesses on the impact of COVID-19 conducted for Niagara Region’s Economic Rapid Response Team (ERRT) paints a picture of an economy hit hard by the pandemic, with total revenue losses estimated in the billions.
The survey found seven per cent of businesses said they are at risk of permanent closure, and 28 per cent said they are vulnerable to closure if conditions don’t improve.
It also found one in three Niagara businesses cannot pay more than half their fixed expenses. Only six per cent said they were doing well.
“There’s no question that Niagara has been hard-hit by the COVID-19 pandemic,” said Valerie Kuhns, acting director of Niagara Economic Development at the Region. “These survey results will help to quantify that impact, design Niagara-specific solutions, and advocate for the supports and resources that will be essential to Niagara’s economic recovery.”
More than 1,300 Niagara businesses, representing more than 47,000 employees, completed the online survey between May 15 and June 5, a release from the Region said.
The respondents reported a combined loss of $425.1 million. The survey’s authors estimated the total revenue loss for the entire Region at $7.8 billion based on the survey results.
The survey found that 51 per cent of businesses had undergone layoffs.
“Local businesses, from retailers to wineries, car dealers to art galleries, are an integral part of our community,” said Mishka Balsom, chief exec
utive officer of Greater Niagara Chamber of Commerce.
“Supporting them by buying local has never been more important. It not only supports those organizations, but rather our economy. And a vibrant economy is critical to the overall well-being of a community.”
The two areas hit hardest are the arts, entertainment and recreation sector with 5,855 layoffs, and accommodation and food services with 8,716 layoffs.
Manufacturing has laid off 771 employees. The manufacturing sector was also anticipating 376 more layoffs.
The analysis by the Region’s economic development department said the figure could be “a result of global supply chain challenges and effects on food and beverage manufacturing sectors, particularly the wine industry since there is a hospitality component to those businesses.”
Of the businesses surveyed, 28 per cent felt existing support programs were enough to carry them through to recovery, while 27 per cent did not, and 45 per cent were unsure.
The survey further found 18 per cent of companies reported they could not operate at full capacity with precautionary measures in place. About 2.5 per cent said they could not operate at all.
“The recovery in Niagara is expected to be slower than in other regions due to our high reliance on tourism and related industries,” Balsom said. “It is anticipated that this is one of the last sectors to recover fully.”
Businesses have made longlasting changes to their operations that will require support going forward, including increased use of personal protective equipment, modified work hours, altered products or services, and lower staffing requirements, the survey found.
Businesses will require a wide range of supports to recover. Although many are looking to governments for financial relief, many seek promotion and marketing assistance, advocacy, and support to other higher levels of government, and information and leadership from municipalities.
The Canada Emergency Wage Subsidy was the most-used government aid program, followed closely by the Canada Emergency Business Account and the Canada Emergency Response Benefit. Only 49 businesses accessed the Canada Emergency Commercial Rent Assistance (CECRA) program.