Posthaste: Coronavirus costing small firms $66,000 on average; a fifth have started laying off staff
The stay-at-home policy is prudent and sensible amid the worst health crisis in years, but it’s also impacting your friendly neighbourhood store and business.
Half of Canada’s small firms say they have seen a drop in sales due to the economic effects of COVID-19, with 4 in 10 of those affected businesses also reporting a decrease of more than 25 per cent, according to a fresh survey conducted by the Canadian Federation of Independent Business (CFIB).
“The early economic impacts of coronavirus on Canada’s SMEs has been massive,” Dan Kelly, CFIB president, said in a statement this morning. “Even more alarming is our finding that a full quarter of small firms would not be able to survive for more than a month with a drop in business income of more than 50 per cent.”
Industries most impacted by the virus are are hospitality, arts/recreation, retail and personal services. CFIB estimates the average cost to those affected by the economic impacts of COVID-19 is about $66,000. As many as 43 per cent said they have reduced staff hours and 20 per cent have begun temporary layoffs; 38 per cent say they have experienced supply chain issues; while 42 per cent noted that they expect to have zero sales if they avoid face-to-face contact with potential clients.
As many as 91 per cent of firms surveyed say the government should offer direct financial support to small business owners suffering from the downturn. Just over two-thirds would like temporary tax relief on income, payroll and sales taxes (69 per cent), and would prefer to planned tax increases such as CPP/QPP and carbon tax cancelled (66 per cent). They are also asking to delay tax filing deadlines and eliminate penalties for late payments and remittance, and introduce wage subsidies for businesses to retain staff (58 per cent).
Real estate activity, Canada’s economic engine for a long time, is also going to see a dip. Interest rates may be at a record low level, but nobody is in the mood to make the biggest purchase of their life, in arguably one of the worst crisis we have seen in recent years.
“Unprecedented measures to slow down the spread of the coronavirus — including social distancing — have the potential to bring house hunting activity to a virtual halt this spring,” said Robert Hogue, senior economist at Royal Bank of Canada. “An expected recession marks a further deterioration in the market’s near-term outlook.”
Here’s what you need to know this morning:
Statistics Canada to release its monthly survey of manufacturing for January at 8:30 a.m. ET
Dr. David Williams, Chief Medical Officer of Health, and Dr. Barbara Yaffe, Associate Chief Medical Officer of Health, to provide update on COVID-19 kin Toronto
Dr. Bonnie Henry, provincial health offices, and Health Minister Adrian Dix provide an update on the COVID-19 pandemic in Victoria
Notable Earnings: Alimentation Couche-Tard Inc.
In this age of the pandemic, it’s a hot commodity.
Canadians have lined up, driven up and in some cases waited for hours in recent days to try to get a test for the virus that causes COVID-19.
“Most of them are sick. The symptoms are a fever and a cough,” said Dr. Danielle Martin of the assessment centre at her Women’s College Hospital in downtown Toronto. “Many of them look like people who have a bad cold.”
A good proportion across the country have also left frustrated that they didn’t qualify to be swabbed, while doctors report that there are definite gaps in the system.
But the data suggest testing is actually a relatively good-news story amid the anxiety over COVID-19. Canada is screening for the novel coronavirus more widely than many countries in the world, and at a far greater rate per capita than in United States, writes Tom Blackwell.
— Please send your news, comments and stories to [email protected]. — Yadullah Hussain @Yad_Fpenergy
With files from The Canadian Press, Thomson Reuters and Bloomberg