1 in 10 Canadian businesses may never recover from coronavirus, industry group says

Many provincial governments are slowly relaxing novel coronavirus restrictions and reopening, but some Canadian business groups are concerned that many enterprises won’t be able to bounce back.

“We’re hearing from our members directly that about 10 to 12 per cent of them have serious questions about whether they will ever reopen at this stage, that they are looking at this point to either winding down their businesses or potentially going bankrupt,” Canadian Federation of Independent Business president Dan Kelly said in an interview with Global News Ottawa Bureau Chief Mercedes Stephenson on Sunday’s episode of The West Block.

“If you extrapolate that for the full economy, that means that we could have 100,000 businesses or more permanently closing their doors, leaving huge gaps on every main street across the country.”

Non-essential businesses across Canada were effectively shuttered between late March and early April in an effort to prevent the novel coronavirus from spreading, with many either re-tooling to create personal protective equipment (PPE) or relying on federal government initiatives such as the Canada Emergency Business Account and Canada Emergency Commercial Rent Assistance to stay afloat.

Kelly said these government benefits may have been helpful at the beginning, but said they may now become a “disincentive” to return to work for some.

According to Kelly, many members reported employees declining return-to-work offers in favour of their monthly Canada Emergency Response Benefits, which provides up to $2,000 per month to workers who could prove they lost their jobs or income due to COVID-19.

Employers will have to account for that, he said, and they are going to need to find ways to entice workers to want to come back.

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“There’s going to need to be flexibility on the part of employers in how they manage their employees,” he said.

It’s also difficult for business owners who already took on large losses as a result of the pandemic to incur more costs, said Goldy Hyder, president of the Business Council of Canada. He said it cost a lot for some employers “just to keep their business alive,” leaving them in “mounting bills of debt.”

Those that have survived the pandemic are now beginning to rehire, said Hyder. But bringing workers back is “not a straight line.”

“There are a whole host of issues that businesses are facing, a whole bunch of new costs as well,” he said, including potential supply chain disruptions, being able to afford PPE for workers, extra staff and cleaning supplies.

To combat this, the Business Council of Canada is spearheading an initiative called the “POST Promise” — an acronym for “People Outside Safely Together”. The program invites companies to display a logo on their business saying they uphold certain safety principles.

The POST Promise “calls on business owners and managers across the country to uphold five key steps to help stop the spread of the coronavirus: maintaining physical distance, washing and sanitizing hands, keeping workplaces clean and disinfected, staying home if unwell, and practicing respiratory etiquette, including wearing a mask when recommended,” the website states.

“It’s a word mark campaign, much like Good Housekeeping or DineSafe where people can feel a sense of confidence that businesses are doing what they can to make the experience safe,” said Hyder.

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While Hyder praised the Canadian government for rolling out subsidy wage programs early, he said businesses need to be able to transition into a new normal.

“The government needs to signal that these programs are going to be coming to an end at some point because they’re financially unsustainable,” he said.

“People want to work. People want their jobs. We need to create that demand. And that transition is what we are what we’re going through. Our message to Canadians is: we can do this.”