What happened: Mustel Group surveyed representatives of businesses that are members of either the Greater Vancouver Board of Trade, Business Council of British Columbia and BC Chamber of Commerce to discover the extent of the hit that most are reeling with and what solutions they have for governments.
Why it matters: Businesses are the core of the economy and their success is vital to an economically vibrant British Columbia.
Data points from a Mustel Group survey connect to reveal an ominous portrait of what 1,938 surveyed B.C. businesses are experiencing, and what bleak future executives expect their enterprises to face. The survey was conducted between March 26 and April 1.
Some kernels from the survey include that:
-
Nearly one-third of surveyed business representatives are planning to cancel, or have had contracts or tenders cancelled, while a quarter plan to defer or cancel capital projects in the next two weeks;
-
Among those ventures laying off staff, on average, organizations have laid off 43 employees. As B.C. businesses tend to be skewed to smaller businesses with fewer than 20 employees, the median number of layoffs is much lower, at five employees;
-
More than 50% of business representatives surveyed are concerned that their enterprises will be insolvent, or not have the fiscal capacity to restart;
-
Business operators are trying to pivot, with 23% of surveyed representatives saying that they are increasing efforts towards online, digital, or e-commerce options; and
-
Business representatives tend to expect the economic rebound in their market will be slow (55%, versus 14% who said it would be fast) but a sizable group is unsure (31%)
Opinions are divided on the effectiveness of government support announced to date, especially with respect to measures that are intended to support cash flow and to prevent layoffs. Most of the survey was conducted before the federal government announced its move to provide a 75% wage subsidy for businesses that are suffering at least a 30% drop in revenue year-over-year on a monthly basis.
When asked what actions the federal government could take to further support business, respondents pointed to the following measures:
-
Provide direct payments to affected businesses (56%);
-
Immediately reduce rates for EI, company taxes, personal tax, GST, other government impose levies or charges (42%);
-
Ensure that critical supply chains are able to function (32%); and
-
Ensure that credit markets and the financial system continue to function (33%).
Top recommendations for the B.C. government include to:
-
further reduce tax rates and defer payments facing B.C. businesses and households (57%);
-
consider remedies for businesses not able to pay rent in collaboration with property owners and tenants (42%); and
-
provide direct support to B.C. industry sectors that are being particularly affected by the pandemic crisis (46%).
"Our members are saying ‘time is of the essence,'" said Val Litwin, president & CEO of the BC Chamber of Commerce. "Entrepreneurs are sending a clear message to Ottawa and Victoria: they need enhanced supports now because time is running out."
Greater Vancouver Board of Trade president & CEO Bridgitte Anderson highlighted the unprecedented nature of the current crisis.
"Each passing day represents a critical juncture for many employers, as they are making difficult decisions and waiting for government support to arrive," she said. "We need a bridge to the other side of this crisis that will help to hasten the economic recovery when the public health emergency subsides.”
Greg D'Avignon, president & CEO of the Business Council of British Columbia similarly urged quick action.
"Speed and efficiency in implementing government actions to support supply chain resilience, provide access to credit and reduce the tax and regulatory cost burdens that combined are vital to successfully emerging into the vastly different world we will inherit post the COVID-19 pandemic,” he said.
