Companies fret about survival as pandemic nears end

Canadian businesses are still wracked with uncertainty even as the end of the COVID -19 pandemic seemingly draws nearer, with consumer demand, cash flow and future survival among their biggest concerns.

Statistics Canada on Friday reported findings from its latest survey of business conditions, which was conducted from Jan. 11 to Feb. 11 and asked firms about their expectations over the next three months.

“Businesses are concerned with future survival and expect to face a variety of obstacles in the short term,” Statcan noted.

One-third of businesses said they expected fluctuations in consumer demand or insufficient demand to be problems in the coming months, figures that were little changed from Statcan's previous survey of conditions in September and October.

About one-quarter of firms also said they saw rising input costs, maintaining sufficient cash flow or managing debt and finding and keeping skilled employees to be obstacles going forward. Those numbers were up slightly from the fall.

Meanwhile, just over half of all businesses did not know how long they could keep operating at their current level of revenue and expenses before considering bankruptcy or closing. One-tenth of firms said they could continue for less than 12 months.

When it came to layoffs, 46.4 per cent of businesses said they didn't know how long their status quo could continue before they would consider reducing staff, while 21.3 per cent reported it would take less than a year.

Moreover, the end of the pandemic could usher in its own set of unique challenges, such as larger debt burdens and changing consumer behaviour that could become permanent.

“The uncertainty remains,” said Corinne Pohlmann, senior vice-president of national affairs for the Canadian Federation of Independent Business, in an interview. “The lockdowns remain in certain parts of Canada still . ... I think the short-term outlooks are not very good.”

Statistics Canada's findings are pretty well aligned with what the Canadian Federation of Independent Business is hearing from its members, Pohlmann said, making it important to keep government support programs, such as the federal wage subsidy, in place.