Canada’s national statistics agency surveyed businesses to gauge the impact of the pandemic, and it’s not pretty. Statistics Canada (Stat Can) surveyed 12,000 business operators between April 3 and 24, on how COVID-19 impacted them. Some businesses are minimally impacted, much to our surprise. However, the majority have seen significant revenue declines, and have had to adjust staffing levels through reduced hours and layoffs.
Over Half of Canadian Businesses Saw Revenues Drop Over 20%
Most people already knew revenues in the first quarter were down, but by how much is somewhat of a surprise. The survey shows 32.3% of companies experienced a decline of 40% or more in revenue. Another 21.2% of companies experienced a drop between 20% and 40% compared to last year. To contrast, just 10.5% of companies saw a boost in revenue compared to last year. The majority of businesses have been hit with revenue loss, and that’s been trickling down to the rest of operations.
Canadian Business Revenue Impact
The estimated change in revenue for Canadian businesses for Q1 2020, compared to last year.
Source: Statistics Canada, Better Dwelling.
1 In 5 Businesses Laid Off More Than 80% of Staff
A lot of companies have been reducing staff, length of shifts, or just plain laying people off. Almost two-fifths (38.1%) of businesses reduced staff hours in March, but weren’t laid off. Two-fifths (40.5%) of businesses needed to lay off staff, with nearly half of those companies laying off more than 80% of staff. On the upside, 59.5% of businesses laid off fewer than 1% of their staff. 27% of businesses reported no change to their workforce at all – that is no layoffs, or reduced hours.
Canadian Business Layoffs
The percent of staff Canadian businesses have laid off as a result of COVID-19.
Source: Statistics Canada, Better Dwelling.
Half of Businesses Can’t Operate Without Revenue For Over 90 Days
The longer the lockdown lasts, the more businesses will have to shutter. Over one-fifth (22.9%) of businesses said they were only able to operate for 30 days or less without revenue. Another 13.8% estimate being able to operate for 31 to 60 days without a source of revenue. Only 21% estimate they could continue to operate without revenue for over 60 days. A big segment, 36.7%, had no clue how long they could operate without a source of income. Not sure if that’s a positive or negative note.
How Long Can Canadian Businesses Last Without Revenue?
The number of days Canadian businesses estimate they can stand no revenue.
Source: Statistics Canada, Better Dwelling.
A surprising amount of businesses are experiencing little to no impact. However, the majority of them have been placed in a precarious situation, that gets worse by the day. Some relief might be coming with wage subsidies, and the unveiling of commercial rent relief. The latter may be an important sentiment changer, since the survey was mostly conducted before the details of the program were released.
Like this post? Like us on Facebook for the next one in your feed.
Which means it’s going to be worse. If you ask businesses, they’ll say they’ve been impacted by COVID-19 since January. In February, they were blaming a Christmas slowdown.
Asking a business how long they have to survive is like asking a person when they’ll die. Optimistically, in the distant future. The reality? Not so much.
Well said Marc, and it’s just getting started. The Reality will set in months down the road when the recovery doesn’t have a V bottom. I have been expecting a recession for the past 18 months so I have hedged myself to the gills..
Hey reality check, that townhouse you got for 200k isn’t worth 700k now.
Let this housing bubble deflate. People who live in their homes dont really care.
Even if housing price drop 50% we are just back to 5 years ago. Who cares, let real estate predators get wiped out.
No one cared that young people are getting screwed who cares about real estate predators.
The economy was teetering before COVID. Equities pumped up, Trump tweeting the stock market was the highest ever, I was waiting for the pin. Coronavirus is it. When it’s over in xx months, the economic repercussions will be felt for years. Social habits and spending probably won’t go back to normal any time soon. This emergency will teach people why saving is important and that maybe debt financed spending is not the wisest thing to do.