Newest federal programs, such as wage subsidy, boost confidence

Although across Canada, businesses express optimism, payroll remains biggest worry

Some business owners are starting to see the light at the end of the tunnel, according to the latest survey from the Business Development Bank of Canada.

The BDC has been releasing a survey of small and medium businesses every two weeks.

According to chief economist and vicepresident Pierre Cléroux, while most businesses have been strongly affected by the COVID-19 pandemic, the latest survey found the level of concern is going down.

This is in part due to federal programs that have been rolling out, such as the 75 per cent wage subsidy. Now “they have a better idea” of how to weather this difficult period, he said.

As well, some are feeling more optimistic after hearing good news from other countries, he said.

“Some countries are opening their economy … step by step,” Cléroux said. “I think that’s a signal that businesses are waiting for.”

But many businesses are still concerned and their payroll is the biggest worry, according to the survey. Small businesses are more affected than larger ones, in part because they may not qualify for some of the government programs. And more than half of the businesses surveyed were small businesses with four or fewer employees.

Cléroux said supply is not a problem for most businesses, unlike public perception, especially at the beginning of the pandemic. Instead, it’s lack of demand — either from having fewer customers or having to shut down altogether.

Certain industries are being hit harder than others. Consumers are shopping differently — more essentials, fewer luxury goods or clothing — which means the retail sector is struggling more, as is the food industry.

“It’s going to take more time for restaurants” to recover, he said.

When things reopen, not only will consumers be more cautious when it comes to buying, but so will investors, Cléroux said.

The crisis will have a “huge impact” on business models. Things will never go back to the way they used to be. More and more people are shopping online during the pandemic and stores with online businesses will do better than those that haven’t caught up with the times.

“It’s not going to go back to the precrisis. I think we’re going to make a jump in (terms) of online business,” he said.

“So retailers who are not prepared for that, they are going to suffer.”

Businesses surveyed said the BDC can help them weather the crisis with relief loans, lines of credit and postponed payments.