Businesses feeling impact of COVID-19
March 27, 2020, 4:04 am
Rob Paul Local Journalism Initiative Reporter
The Saskatchewan Chamber of Commerce and its partners asked businesses in a survey about how they expect COVID-19 to impact them and received over 1,000 responses.
“Businesses told us clearly that they are in a very, very troubled position with so many unknowns. The best analogy is that we have suffered an economic gash that needs immediate attention and will take time to heal,” said Saskatchewan Chamber of Commerce CEO Steve McLellan.
Some of the results of the survey:
- 85 per cent of businesses that responded have felt a negative impact already, and 87 per cent believe the challenges will continue for two months or longer.
- The greatest negative impacts include reduced revenues; impacts on staff either through layoffs, workers being off for health reasons due to isolation protocols, or under-utilized labour while still at work; and the cancellation of important work-related travel events.
- 42 per cent of respondents believe they will see as much as a 50 per cent drop in revenue.
“We were heartened that almost half of the respondents had a plan in place to help mitigate the challenges,” said McLellan. “We have also seen many creative and impactful actions by businesses to show support for health of employees and the public, and for Canada’s collective effort.”
“From voluntary closures of public spaces, including restaurants and facilities, to donating excess food to food banks, businesses are still focused on doing the right thing for the community, employees, and customers.”
Respondents to the survey recommend government implement the following:
- Immediate action on Federal Employment Insurance (EI)
- Allow layoffs without termination
- Expand loan access
- Extend tax windows
- Ensure access of products across the border
“Our businesspeople have dealt with this dramatically changing economic landscape as well as could be expected given the circumstances so far,” said Chair of the SCC Board of Directors Valerie Sluth.
“But there needs to be co-ordinated action by the federal and provincial governments or else we will see closures on a level that we have not seen in this province for decades.”
“Most businesspeople are monitoring the government messages and are fully supportive of the level of inter-jurisdictional cooperation that has happened to date, quick action by these levels of government will be required in the next few days to retain a stronger hope of future success,” said Sluth.
Businesses are feeling the economic impact in devastating ways right now, McLellan says.
“The impact without question is a gash to our economy and we heal from gashes, we will get through it,” said McLellan. “But there is some bleeding happening right now.”
“I’m shocked that the level of impact is so high and the impact will be at least a couple of months and of course in some cases it’s as much as a 50 per cent revenue drop and it could be even higher than that,” said McLellan.
McLellan says although the effects have been devastating, businesses need to keep informed and can’t make rash decisions.
“The best advice I can give is to stay current with what the government is announcing in terms of employment insurance, those sorts of policies that are assisting businesses and employees,” said McLellan.
“The second thing is, don’t make decisions that will have long-term impacts. For example, don’t decide you’re going to close down the business, this will at some point end and the business will become viable again.”
“Don’t necessarily terminate your staff yet because there’s reason to keep them and there’s potential for EI and provincial labour rules to change that makes that separation on a temporary basis a little more amenable for both the employee and the employer.”
McLellan says during the COVID-19 pandemic making sure your employees and customers are healthy is the top priority.
“The short-term thing to be sure of is to keep your staff and your customers safe. Do what you need to do if you remain open to constantly disinfect and monitor both peoples physical and mental health,” said McLellan.
Businesses must have a plan in such a trying time and need to keep dialogue open with everyone involved, says McLellan.
“It’s hard to do a long-term plan, but a short-term plan is critical. Talk to your staff, talk to your customers, tell them what you know and what you’re doing. Tell them what it means to them as employees, what it means for them as suppliers or customers,” said McLellan.
“Having that open and frank conversation is very important because without that there’s simply too many unknowns.”
“The long-term plan is very hard to do right now because in the last week this whole situation has changed and may again within the next week.”
McLellan knows the economic fallout will be massive, but still believes Saskatchewan will get back to where they were down the road.
“The economic impact will be in the billions of dollars. With some assumption we’ll be back to some semblance of normal within 90 days and businesses will start to springboard back,” said McLellan.
“Our GDP will be impacted no question, the second quarter of this year will be dramatically down from earlier projections, but I’m also confident that the Saskatchewan business community has weathered storms before and will get through this one too.”
“In the short-term it’s a significant devastating financial loss, but in the long-term we’re going to be fine.”
With the financial aid package Trudeau’s government announced, McLellan says it’s a move in the right direction towards recovery.
“The bottom line is without question the federal government has stepped up in a big way,” said McLellan. “There’s still a lot of work to be done and a lot of details to still come out, but we’re happy with what we’ve seen so far.”
