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B.C. businesses brace for second wave of impacts when government support ends

Many businesses on government support foresee cutbacks, more debt and layoffs when that support ends
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Many B.C. businesses anticipate additional consequences and challenges when government support ends | Rob Kruyt

What happened: Two-thirds of B.C. businesses are using some form of government support in the third phase of the province’s restart plan, according to a new survey from the BC Chamber of Commerce and others.

Why it matters: While nearly 30% of businesses on support expect to return to normal once support ends, many expect a second wave of negative impacts, including layoffs and temporary or permanent closures.

A new survey suggests B.C. businesses expect to face a second wave of challenges when COVID-19 government support programs end.

Data collected from 1,400 member businesses of the BC Chamber of Commerce, Greater Vancouver Board of Trade, Business Council of British Columbia and others shows approximately two-thirds of businesses in the province are currently accessing some form of government support.

While 28% of them expect to return to normal once support programs expire, many anticipate having to reduce staff hours (32%), lay-off or terminate employees (27%) and take on debt (24%).

One in 10 businesses believe they will have to shut down temporarily or permanently.

“Policy-makers and politicians must stay sensitive to how vulnerable BC businesses are today.  Entrepreneurs are waking up to the reality that their new operating environment is more costly and fraught with risk,” said BC Chamber president and CEO Val Litwin in a news release.

“A bold economic recovery plan that helps small businesses compete is a non-negotiable for a prosperous B.C.”

According to the survey, the Canada Emergency Wage Subsidy – which has been extended until the end of the year – has been the most useful government support program for businesses. 

Other programs – such as the Business Credit Availability Program and the Large Employer Emergency Financing Facility – were considered minimally useful to respondents. Only 7% of respondents described the Canada Emergency Commercial Rent Assistance program as useful.

The survey – one of several Pulse Check surveys released during the pandemic – found that a higher proportion of companies are now reporting higher operating costs as a result of COVID-19: 40% in the latest survey, compared with 25% in May.

As for workplace changes that last beyond the pandemic, more than half of businesses expect an increased reliance on digital means of communication, 44% anticipate implementing or expanding work-from-home policies and 31% foresee a reduced number of employees at their workplace.

hwoodin@biv.com

@hayleywoodin

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