While British Columbia has entered phase three of its Restart Plan, two-thirds (65%) of businesses surveyed are using some form of government support. Businesses expect a substantial “second wave” of negative impacts should these programs expire too quickly.
Only about three-in-ten businesses (28%) on government support expect to return to normal once the programs end. Of the remainder, 32% expect to reduce employee hours, 27% expect to lay-off or terminate employees, and 24% anticipate taking on debt. One-in-ten will have to close either temporarily or permanently.
The findings are the results of a survey of 1,401 member-businesses of the BC Chamber of Commerce, Greater Vancouver Board of Trade, Business Council of British Columbia, and other partners, with the Mustel Group’s assistance. This survey is the fourth in a series of pulse checks using the BCMindReader.com platform.
As the BC government works on its $1.5 billion recovery plan, bold vision will be required to help businesses survive in the short term and the economy to be competitive and resilient in the future. However, businesses are not particularly confident that the recovery plan will help their business succeed or survive. Only 16% are confident, compared to 47% that are not confident.
Businesses say the most important components of the recovery plan are providing payroll or wage supports and reducing taxes and fees. Cutting red tape, creating better investment conditions, direct cash flow support, and making regulations more efficient are other notable suggestions.
Other Key Findings
The pandemic has spurred lasting changes affecting where and how businesses operate, especially those in core employment centres and cities.
- Of businesses that work in an office setting, 43% are currently working in an office, with the remainder working remotely (42%) or some other way (16%).
- Over half see employees returning to the office by the end of the year (58% for whom the question is applicable) but note that 29% do not expect a return until 2021 and 15% do not ever see a return to pre-COVID levels.
- The key barriers to getting employees back to the office or workplace are social distancing requirements (38%) employees’ reluctance to return to the workplace due to safety concerns at the workplace (35%) and, to a slightly lesser extent, getting to and from work (22%). Over 50% of large businesses report these challenges. The complexity and cost of safety measures are other issues.
- There is some concern among businesses regarding the clarity and simplicity of health and safety requirements to reopen, each being rated an average of approximately ‘3’ or lower (‘5’ being ‘very easy’ and ‘1’ being ‘extremely difficult’) by 40-50%.
- The most common lasting changes noted are increased reliance on digital means for communications, meetings, etc. (55%), and expanding or implementing work at home policies (44%). Considerable proportions also expect to reduce the number of employees at the workplace (31%), and reduce their office space needs (22%).
- Among businesses who travel, the majority do not expect to return to business travel until 2021 or when a vaccine is available. In fact, just over half do not expect to return to pre-COVID levels until after a vaccine has been found (35%) or ever (16%).
Ranking support programs
While two-thirds (65%) of businesses surveyed are using some form of government support, the uptake and accessibility of programs is uneven.
- The most useful program has been the Canada Emergency Wage Subsidy (53%) and, of businesses that qualify, the Canada Emergency Business Account has received strong uptake.
- The Canada Emergency Commercial Rent Assistance (CECRA), Business Credit Availability Program (BCAP), and Large Employer Emergency Financing Facility (LEEFF) have either not been useful or accessible to businesses with only 7%, 2%, and 1%, respectively, ranking these programs as useful.
Impacts on business
- There is some concern among businesses regarding the clarity and simplicity of health and safety requirements to reopen, each being rated an average of approximately ‘3’ or lower (‘5’ means ‘very easy’) by 40-50%. In terms of the cost of implementing the measures, 55% rate the cost ‘3’ or less where ‘5’ means minimal cost.
- Impacts on businesses from the COVID-19 pandemic are similar to those reported in previous Pulse Check surveys, but now we see a higher proportion than in the past, 40%, also report increasing operating costs, likely due to reopening or expanding operations. This level increases to over 50% for medium and large business.
- The most common impact continues to be decreased sales volume, reported by 75% of businesses (no change from previous survey). And again, over four-in-ten report reducing staff hours (45% no change from last survey), laying off employees (42% down slightly from 48% in the last survey), and closing temporarily (36% down from 42%).
- Between 33% to 36% have had capital projects, contracts/tenders, or marketing projects either cancelled or deferred (similar to previous surveys).
- Positively, 36% (up from 31%) have increased their digital or e-commerce presence, and small groups have introduced new products or services (15%), advanced new marketing projects (10%) or advanced new research and development (6%).
- Among businesses that have laid off employees, close to four-in-ten (37%) are not sure what they are going to do when the temporary lay-off period ends, while 5% expect to declare insolvency or bankruptcy (the level is likely higher as businesses that have already done so are unlikely to have completed the survey).
“Policy-makers and politicians must stay sensitive to how vulnerable BC businesses are today. Entrepreneurs are waking up to the reality that their new operating environment is more costly and fraught with risk. A bold economic recovery plan that helps small businesses compete is a non-negotiable for a prosperous BC – and when small businesses thrive so do communities and people. Governments must keep focussed on delivering their recovery plans swiftly.” Val Litwin, President & CEO, BC Chamber of Commerce
“The viability of many businesses hinges on the government acting quickly in rolling out a recovery plan that restores consumer confidence, provides support measures necessary to help with wages, reduces costs and fees, while taking meaningful steps towards creating a competitive and resilient business environment that will stimulate our economic recovery.” Bridgitte Anderson, President & CEO, Greater Vancouver Board of Trade
“While we have had collective success in managing down the health crisis presented by COVID-19, British Columbians and our governments have seen massive declines and uncertainty in their incomes. Now is the time to start focusing on rebuilding our economy to benefit people. The surest way to accomplish this is for governments to urgently create the conditions that enable businesses to invest, operate and innovate to get people back to work and create more goods jobs so that together we can solve the biggest economic crisis in a century.”Greg D’Avignon, President & CEO, Business Council of British Columbia
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