Almost half of B.C. businesses may not or will not re-open once the restrictions are eased on workplace operations, according to a new business survey.
The COVID-19 crisis is deepening for British Columbia businesses with four-in-ten (43 per cent) of those surveyed stating they can only continue to operate for up to three months under current restrictions.
For businesses temporarily closed, the future is similarly dire, with only half (53 per cent) expecting to reopen once the restrictions are eased on workplace operations, while 38 per cent are unsure, and 8 per cent will not reopen.
The survey by the BC Chamber of Commerce, the Greater Vancouver Board of Trade, the Business Council of British Columbia, and other partners, with the assistance of the Mustel Group, represents 1,284 member-businesses.
“Businesses are doing everything possible to remain viable, but an increasing number are reaching the point of no return. There is a small window to support the survival and eventual recovery of a significant number of businesses and it is, to a great extent, reliant on the scale and speed of government support,” said Bridgitte Anderson, president and CEO, Greater Vancouver Board of Trade.
The pandemic caused immediate steep revenue declines but conditions continue to worsen, as respondents monitor their cash flows and operational expenses.
- Approximately half of all businesses (54% up from 48% in the first survey) state they have experienced revenue decreases of 75% or more while two-thirds (66%) have had revenues drop by 50% or more.
- The top operating cost or expenses were wages (64%) followed by rent (54%), taxes (34%), and goods and supplies (32%).
- The majority of businesses (58%) are spending 10% or more of operating expenses on rent, with 42% spending 20% or more. The proportion of wages or rent as a function of overall costs vary depending on firm size, sector, geography, and other factors.
While businesses surveyed are positive about government measures for employees and ensuring supply chains remain open, they are concerned about the speed and scope of programs that support cash flow.
- Just over half of businesses believe the federal government programs announced to date will be helpful once implemented, but they are not helpful for 33% of businesses, primarily because they do not qualify for any programs or provide enough/timely cash flow relief.
- Similarly, one-third of businesses (35%) do not find the provincial programs helpful, for the same reasons as federal programs.
- Businesses with under five employees are least likely (49%) to find federal programs helpful, primarily because they do not qualify.
- Only one-third of businesses (34%) are confident they will qualify for the 75% wage subsidy program, while 21% are unsure.
- Reasons for not qualifying include: do not have employees on payroll (46%), revenue has not declined enough (28%), employees laid off (13%), business shut down (11%), seasonal revenue (11%) and start-up or pre-revenue company (10%).
Many businesses are not confident in their ability to restart or whether consumers will return. Attracting customers and revenue (79%), cashflow (55%) and rehiring staff (28%) are among the business community’s top concerns.
“Government programs are helping businesses but more supports are still needed. How government listens and responds to the business community in the coming weeks will be the game-changer in terms of economic recovery.” Val Litwin, president and CEO, BC Chamber of Commerce.