As a result of the widespread measures taken to contain the spread of COVID-19, the Canadian economy contracted 11.6% in April, following a 7.5% drop in March. By the end of May, many businesses had begun to adapt to the new reality by shifting to teleworking, reducing hours, laying off staff, applying for government funding or seeking rent relief. As pandemic-related restrictions were gradually lifted throughout the summer, the business climate began to improve slightly. 

Nevertheless, challenges remain, especially in light of the resurgence of COVID-19 and a return to partial shutdowns in several provinces. From mid-September to late October, Statistics Canada conducted the Canadian Survey on Business Conditions to collect information the pandemic’s impact on businesses throughout the summer, and on businesses’ expectations moving forward.

Layoffs during the pandemic
36.5% of businesses had laid off at least one employee since the start of the pandemic. Of businesses that had laid off at least one employee, almost two-thirds (64.3%) had laid off half or more of their workforce. Just over half (53.8%) of businesses that had laid off staff reported hiring back 50% or more of their workforce.

The majority of businesses expect to retain the same number of employees over the next three months
74.1% of businesses expected their number of employees to remain the same over the next three months, while 10.4% expected their number of employees to decrease. 

Some businesses expect to raise prices over the next three months
18.1% of businesses expected to raise prices over the next three months, including over one-quarter of businesses in the retail trade (31.1%) and construction (27.8%) sectors. In contrast, 5.1% of all businesses expected to lower prices.

Liquidity and ability to take on more debt
76.9% of businesses had the cash or liquid assets required to operate. 43.9% of businesses reported that they were unable to take on more debt, while 19.4% could not say whether they could take on more debt. 

Outlook on business operations
30.4% of businesses did not know how long they could continue to operate at their current level of revenue and expenditures before considering further staffing actions, closure or bankruptcy. 17.5% reported they could continue for less than six months.  5.2% reported that they were actively considering bankruptcy or closure.

Business revenues
30.8% of businesses reported that their revenues from August 2020 were down 30% or more, year over year. 15.5% of businesses reported that their revenues were down by half or more.

36.4% of businesses did not expect their revenues to be higher over the next three months compared with the previous three months. 27.5% of businesses were uncertain about their revenues over the next three months.

Special accommodations for employees who are parents
59.4% of businesses where not all work could be performed on a flexible schedule or where schools and child-care facilities were not expected to have a normal schedule during the fall were providing or considering providing special accommodations for parents. 41.8% of these businesses allowed or would allow parents to change their schedules; 27.5% allowed or would allow parents to telework or work remotely; and 23.7% allowed or would allow parents to switch to part-time status on a temporary or limited basis.

Teleworking or working remotely during and after the pandemic
Teleworking and working remotely have become more prevalent since the start of the pandemic. 35.3% of businesses reported that teleworking or working remotely was a possibility for their employees. Of these businesses, 27.2% reported that all of their workforce was teleworking or working remotely on August 31, 2020. Once the pandemic is over, 14.7% of businesses anticipate that all of their workforce will continue to primarily telework or work remotely.

For businesses that indicated that teleworking was potentially applicable to their workforce, 28.3% reported being likely or very likely to permanently offer more employees the possibility of teleworking or working remotely once the pandemic is over, while 12.7% were likely or very likely to require it.

Source: Statistics Canada