Almost 90% of small businesses hurting
Almost 90 per cent in chamber survey report losses or layoffs due to COVID-19
Almost 90 per cent of B.C. small businesses are already reporting some hit in lost sales, cancelled contracts or layoffs due to the COVID-19 response, according to a new B.C. Chamber of Commerce survey.
This points to a dire need for the $82-billion federal economic stimulus package announced by Prime Minister Justin Trudeau on Wednesday, according to chamber of commerce CEO Val Litwin, who said it can’t come soon enough.
“They’re treading water right now, but they can’t do that for too long,” Litwin said of the thousands of businesses in need of that “life ring.”
“The data bears that out with some of these numbers around layoffs and revenue reduction, we have a very tight window to get this to businesses quickly,” he said.
Business impacts have added up fast as governments tried to slow COVID-19, declaring states of emergency, banning mass gatherings, closing bars and barring cruise ships access to B.C. ports until July.
“Public health must be the primary concern during these early days of the pandemic,” Litwin said, and lauded government “for prioritizing the health and safety of its citizens above all else.”
However, as business activity has regressively ramped down, 75 per cent of respondents to the survey characterized the negative impact they’re experiencing as “significant,” with 48 per cent worried that they’ll face a risk of going out of business if revenue losses continue trending down.
Of 7,210 total participants asked, “what near-term impacts on your business do you predict?” 2,792, or 39 per cent, answered, “we will have to lay off staff due to economic uncertainty.” And while the hit to business has already been deep, 94 per cent of businesses said they won’t get through the downturn unscathed.
“So this is not a hypothetical impact” Litwin said. “It is happening in real time.”
The chamber of commerce threw the survey open to its membership on March 13, through its BCMindReader.com survey platform, and distributed access to the portal through Small Business B.C., the B.C. Economic Development Association and Community Futures. Results of the survey were parsed from more than 7,800 business owners and operators.
Litwin called the initial federal response, a package split between $27 billion in new spending and $55 billion in tax-deferral measures, as “a solid start.”
“We’ve heard that this is Phase 1” of assistance, Litwin said. “Now the call to action is, ‘Let’s make sure there’s friction-free (access) for businesses and individuals to get to those relief funds.’”
The next step, however, is for the province to step in with its answer to the requests business have been making to co-ordinate its response with elements such as deferral of provincial taxes, and pressure on the province to allow for delaying property tax payments, said Anita Huberman, CEO of the Surrey Board of Trade.
Premier John Horgan said in a statement that he was pleased with some of the federal measures, especially those that extended benefits to self-employed and gig workers. The province will conduct “a full review of the federal package” and expand on that plan, but he didn’t specify when.
“In terms of support for business, all of this is good news,” Huberman said, but “I think it’s just the beginning.”
Huberman added that she is fielding a lot of calls from her members confused about how to access the programs that governments are announcing. There is “still confusion after the prime minister’s announcement this morning,” Huberman said.
However, how much the stimulus package helps the economy will depend on how sharply business drops off and how long the downturn lasts.
“The economy itself is going to fall into a pretty sharp contraction (this) quarter,” Central 1 Credit Union chief economist Bryan Yu said.
The federal measures include $3.8 billion to help small businesses, charities and non-profits keep paying employees by subsidizing 10 per cent of an employee’s wage for three months. It will max out at $1,375 per employee and $25,000 per business. That is a level that might be too low to be much of an incentive, said Iglika Ivanova, a senior economist at the Canadian Centre for Policy Alternatives.