July 28, 2020, Chetwynd BC -  While British Columbia has entered phase three of its Restart Plan, slightly over half (58%) of businesses surveyed in Northern BC are using some form of government support, fewer than in other regions across the province. Businesses expect a substantial “second wave” of negative impacts should these programs expire too quickly.

 

Only about four-in-ten northern businesses (38%) on government support expect to return to normal once the programs end. Of the remainder, 27% expect to reduce employee hours, 19% expect to lay-off or terminate employees, and 18% anticipate taking on debt. One-in-ten will have to close either temporarily or permanently.

 

When compared to the rest of the province, more businesses in Northern BC report that reopening requirements are difficult (26%), lack clarity of health and safety requirements (22%), and are expensive to implement (26%). Small businesses are especially hardest hit with 19% reporting that the measures are very expensive compared to 12% of all businesses in Northern BC.

 

The findings are the results of a fourth survey in a series of pulse checks using the BC Chamber network BCMindReader.com platform that 216 responses from businesses in Northern BC. The provincial survey had 1,401 participants.

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 in Northern BC are not particularly confident that the recovery plan will help their business succeed or survive when compared to other regions in the province. Only 14% are confident (16% average in other regions), compared to 55% that are not confident (47% average in other regions).

Businesses say the most important components of the recovery plan are reducing taxes and fees and cutting red tape. Creating better conditions for investment, providing payroll/wage supports, and reducing or making regulations more efficient were other notable suggestions.

 

Other Key Findings for Northern BC

 

The pandemic has spurred lasting changes affecting where and how businesses operate:

 

• Of businesses that work in an office setting, 60% are currently working in an office, with the remainder working remotely (22%) or some other way (18%).

• Over half see employees returning to the office by the end of the year (74% for whom the question is applicable) but note that 16% do not expect a return until 2021 and 10% 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 (27%) employees’ reluctance to return to the workplace due to safety concerns at the workplace (24%) and, to a slightly lesser extent, expensive measures to ensure a safe workplace and adhere to health and safety guidelines (22%).

• 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 41%.

• The most common lasting changes noted are increased reliance on digital means for communications, meetings, etc. (40%), and expanding or implementing work at home policies (27%). Considerable proportions also expect to reduce the number of employees at the workplace (19%), and reduce their office space needs (12%).

• Among businesses who travel, the majority do not expect to return to business travel until 2021 or when a vaccine is available. In fact, approximately a third do not expect to return to pre-COVID levels until after a vaccine has been found (18%) or ever (12%).

 

Ranking support programs

 

While two-thirds (65%) of businesses surveyed in BC are using some form of government support, only 54% in Northern BC are using government support program – the uptake and accessibility of programs is uneven.

 

• The most useful program has been the Canada Emergency Wage Subsidy (54%) 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 3%, 3%, and 2%, respectively, ranking these programs as useful.

 

Impacts on business

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• 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 48%. In terms of the cost of implementing the measures, 51% rate the cost ‘3’ or less where ‘5’ means minimal cost.

  • Small businesses are hardest hit with 67% rating the clarity and simplicity of health and safety requirements a ‘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, 42%, also report increasing operating costs, likely due to reopening or expanding operations. This level increases to over 60% for medium and large business.

• The most common impact continues to be decreased sales volume, reported by 69% of businesses. And again, over four-in-ten report reducing staff hours (48%), laying off employees (37%), and closing temporarily (27%).

• Between 26% to 28% have had capital projects, contracts/tenders, or marketing projects either cancelled or deferred.

• Positively, 25% have increased their digital or e-commerce presence, and small groups have introduced new products or services (11%), advanced new marketing projects (7%) or advanced new research and development (4%).

• Among businesses that have laid off employees, close to four-in-ten (39%) are not sure what they are going to do when the temporary lay-off period ends, while 2% 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 northern BC businesses are today,” Val Litwin, President & CEO, BC Chamber of Commerce said. “Entrepreneurs are waking up to the reality that their new operating environment is more costly and fraught with risk – especially in BC’s rural communities. 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 focused on delivering their recovery plans swiftly.” 

“The recovery of our local businesses is of utmost importance,” Executive Director for the Chetwynd Chamber of Commerce, Naomi Larsen said. “We need to do everything we can to make sure our local economy and the north remains strong and resilient in the face of Covid19. Thank you to all of our businesses who took part in the Pulse Check surveys. Your opinions and your voices are being heard.”

Larsen encourages local and norther business to log onto www.bcmindreader.com today and sign up.