More than 60% of businesses are not expected to survive: chamber survey

More than 60 per cent of Edmonton businesses expect to or have already closed for good because of the COVID-19 pandemic, according to the latest survey from the Edmonton Chamber of Commerce.

Almost five per cent of local businesses said they have shut their doors and 58 per cent predict that they will have to. Last week’s survey found about four per cent had closed, while roughly 47 per cent expected to close.

Janet Riopel, the president and CEO of the chamber, said the window for governments to save the small and mid-sized enterprises being hurt most by the COVID -19 crisis is closing rapidly.

“Businesses are grateful for the supports the government is putting out, but the one message we keep hearing repeatedly is that help isn’t coming fast enough,” said Riopel.

Almost 40 per cent of local businesses who responded accessed the federal government’s wage subsidies, while only about a fifth said they have taken advantage of utility deferrals instituted by the provincial government.

Some 55 per cent of businesses said they were forced to lay off staff.

About 87 per cent were able to make payroll in the latest pay period, and about 72 per cent report having enough cash on hand to make the next rent or mortgage payment.

All levels of governments are listening and working to address a rapidly evolving situation, but the pace of the impact of COVID-19 means liquidity supports are needed immediately, or the cascading effects could be enormous, Riopel said.

And some businesses might still fall through the cracks left by emergency relief programs.

Businesses who lease space in shopping centres, including franchisees such as Cookies By George, still need to pay the rent, even though malls are closed.

“It’s tremendously onerous, especially to have a business in a busy shopping centre where rents are astronomical to begin with,” said Judah Busheikin, owner of the Edmonton cookie company. Some landlords have offered to defer rent, but the potential of having to pay it back when the malls reopen still looms.

Small businesses need reduced rent if they’re going to catch up with the bills when malls reopen, he said, noting only some Cookies by George locations are able to deliver online orders, and those earnings are “pocket change.”

“They’ll do what they can to stay in business, but it’s hanging by a thread.”

Half of all businesses that answered the survey said that government efforts to address the business cash flow crisis were ineffective, and 45 per cent said government measures to address layoffs were ineffective.

The survey was conducted before Prime Minister Justin Trudeau announced Thursday morning the federal expansion of the Canada Emergency Business Account $40,000 loan for small businesses to include those with payrolls last year between $20,000 and $1.5 million.

The federal government also announced a wage subsidy program earlier this month that would cover 75 per cent of wages for businesses for 12 weeks.

“That’s a great program, but it doesn’t extend to us because you can’t rehire staff in an empty shopping centre,” said Busheikin.

Trudeau also said a program is coming to help businesses cover rents for April, May and June, but the details still need to be worked out with the provinces and territories.

If they can work out a good rent deferral program, “that will be a big piece of the puzzle,” said Busheikin.

Last week, the Alberta Opposition NDP called on Premier Jason Kenney to step up to provide small businesses and non-profits with emergency support, including a rent subsidy up to $10,000 and a backstop of up to $7,500 for landlords who agree to defer rent for three months for businesses.

On the positive side, week over week, fewer businesses reported disruptions in product supply chains.

“Some companies are now finding their way through the maze and the confusion that mounted on us so quickly,” said Riopel.