New figures from Statistics Canada show more than half of all businesses say their revenues have dropped 20 per cent or more, with some businesses recording declines of up more than 70 per cent, because of COVID-19.
These figures emerge from an online survey that drew responses from more than 12,600 businesses between April 3 and 24. Nearly one-thirdof businesses who responded to the survey said that their first quarter revenues dropped 40 per cent or more from the same quarter a year earlier. Another 21.2 per cent of businesses said their revenues had decreased by 20 to 40 per cent during the same period.
The decline was especially evident in industries such as accommodation and food services (72.6 per cent), arts, entertainment and recreation (66.7 per cent) and retail trade (60.3 per cent). Just over 40 per cent of businesses in agriculture, forestry, fishing and hunting reported either no change or higher revenues.
The survey also gives insights into how businesses are responding to the crisis both when it comes to their finances and staff.
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Over one-quarter (28.6 per cent) of businesses said they asked for credit from financial institutions to cover operating costs due to revenue shortfalls caused by COVID-19. Financial institutions have either fully or partially approved over three-quarters (77.3 per cent) of requests. In terms of businesses that pay rent, one-fifth secured rent deferrals.
In terms of staffing levels, almost 40 per cent of businesses cut staff hours or shifts, while the same number of businesses said that they had laid off staff, with almost 20 per cent of all businesses having laid off 80 per cent or more of their workforce. Of the businesses that laid off at least one employee, just over 45 per cent laid off 80 per cent or more of their workforce, confirming that small businesses with small staff are bearing the brunt of the pandemic.
A total of 1.3 million Canadians were away from work because of COVID-19 last month, with another 2.1 million working reduced hours.
Layoffs have been especially numerous in the accommodation and food services sector. Almost 70 per cent of businesses in that sector reporting layoffs said they laid off 80 per cent or more of their workforce.
Social distancing rules have also hit different parts of the economy. Around 90 per cent of businesses in the accommodation and food sector as well as the arts, entertainment and recreation sector say social distancing has hurt them. Businesses in health care and social assistance (87 per cent) and educational services (86.7 per cent) have reported comparable numbers.
Finally, the report notes that nearly two-thirds (62.3 per cent) of businesses say that they could reopen or return to normal operations in less than one month following the removal of social distancing rules.
In other words, it will take some time for ‘normal’ economic activity to resume once social distancing rules end.
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