VICTORIA – The COVID-19 crisis is significantly hurting British Columbia businesses and their employees. In the past two weeks alone, approximately half of the 1,900 businesses surveyed have experienced revenue decreases of 75 per cent or more, while two-thirds have seen revenues drop by 50 per cent or more.
This is according to a survey of the members of the BC Chamber of Commerce, the Greater Vancouver Board of Trade and the Business Council of British Columbia, and other partners, with the assistance of the Mustel Group. This is the first in a series of bi-weekly pulse checks using the BCMindReader.com platform.
The data paints an ominous picture of what businesses and workers are experiencing now and what they expect to face in the future:
- Nearly one-third are planning to cancel or have had contracts or tenders cancelled, while a quarter will defer or cancel capital projects in the next two weeks.
- Among those laying off staff, on average, organizations have laid off 43 employees. As BC businesses tend to be skewed to smaller businesses (less than 20 employees), the median or mid-point is much lower, at five employees.
- More than 50 per cent of businesses are concerned they will be insolvent or not have the fiscal capacity to restart their business.
- Businesses are trying to pivot with 23 per cent increasing efforts towards online, digital, or e-commerce options.
- Businesses tend to expect the economic rebound in their market will be slow (55 per cent versus 14 per cent fast) but a sizable group is unsure (31 per cent).
Val Litwin is the President and CEO of the BC Chamber of Commerce
“There’s no doubt governments want to find the right solution for businesses, but our members are saying ‘time is of the essence’. With these survey results entrepreneurs are sending a clear message to Ottawa and Victoria: they need enhanced supports now because time is running out. Governments must focus on getting subsidies and credits to businesses quickly,” said Val Litwin, President and CEO of the BC Chamber of Commerce
Individual businesses in BC are experiencing the crisis differently, depending on their sector, location of operations, size, exposure to global supply chains, and the impacts of other global market forces.
Opinions are divided on the effectiveness of government support announced to date, especially with respect to measures that support cash flow and to prevent layoffs (note that the 75 per cent wage subsidy was introduced after the survey was launched). This may reflect that while many announcements have been made, funds have not yet been received by businesses or individuals.
When asked what actions the federal government could take to further support business, respondents pointed to the following measures:
- Provide direct payments to affected businesses (56 per cent).
- Immediately reduce rates for EI, company taxes, personal tax, GST, other government imposed levies or charges (42 per cent).
- Ensure that critical supply chains are able to function (32 per cent).
- Ensure that credit markets and the financial system continue to function (33 per cent).
Top recommendations to the BC government include:
- Further reduce tax rates and defer payments facing BC businesses and households (57 per cent).
- Consider remedies for businesses not able to pay rent in collaboration with property owners and tenants (42 per cent).
- Provide direct support to BC industry sectors that are being particularly affected by the pandemic crisis (46 per cent).
Greg D’Avignon is the President and CEO of the Business Council of British Columbia
“In the face of COVID-19, larger businesses and organizations are doing their best to keep their operations going while ensuring they are protecting employees and creating safe working environments through the guidance of the Provincial Health Officer. Where possible, the majority have moved to or increased their digital or e-commerce operations. However, they, like all businesses, need assistance to have the liquidity and healthy balance sheets necessary to endure the lost sales and revenues, cancelled projects and contracts, and increased operating costs, particularly those in global supply chains and export markets. Speed and efficiency in implementing government actions to support supply chain resilience, provide access to credit and reduce the tax and regulatory cost burdens that combined are vital to successfully emerging into the vastly different world we will inherit post the COVID-19 pandemic,” said Greg D’Avignon is the President and CEO of the Business Council of British Columbia.
