Last week, we looked at how businesses in British Columbia can help protect their staff during the current pandemic. This week, we will look at some of the impacts being felt by B.C.’s business community as a result of the dramatic changes that have taken place since last Friday.
B.C. Business Council Warns of Economic Impact
The Business Council of British Columbia began the year with a prediction that the province would see economic growth of approximately 2% throughout 2020. In a report issued on March 6, the Council downgraded that forecast to a range of 1-1.5%, with the chance of a recession if the impact of COVID-19 were to escalate significantly. The initial positive outlook predicted in January relied on several factors, including commercial and industrial construction, a strong housing market and a growing population. However, the disruptions felt across the business community by the pandemic has drastically changed that outlook.
Given the growing global travel restrictions and the impending closure of the U.S./Canadian border, the Council predicts that the airline, tourism and hospitality industries will bear the brunt of the losses, however, the impact will likely be felt across the board.
According to an article in the Vancouver Sun, the B.C. Chamber of Commerce conducted a survey of businesses in the province and found that 90% of small businesses were already feeling a pinch in some way related to COVID-19. While the fallout is different across the board, nearly every business reported a downturn resulting in some way, from cancelled contracts, lost sales and even layoffs.
The report highlighted the fact that as businesses begin to operate as normal again after the worst is over, an economic bump is expected. However, whether that can make up for the losses being suffered is unlikely.
The tourism industry is already suffering significantly. Hotels, restaurants and other tourism-dependent businesses have already seen dramatic reductions in bookings. The Tourism Industry Association of B.C. said that each year, the industry accounts for approximately $19 billion in revenue from over 19,000 businesses, making it the third-largest industry in the province. The organization fears that the safety precautions put into place, including social distancing, travel restrictions will mean that many businesses won’t survive.
The group is seeking the creation of an emergency contingency fund to help business owners weather the massive downturn caused by the COVID-19 pandemic, In addition, it is also seeking a suspension of land tenure fees, loan payment forgiveness and a suspension of employer health taxes. The group also warns that assistance will likely be required for some time after businesses begin to resume operations in the future.
B.C. Physician Asking Businesses for Assistance in Limiting the Spread of COVID-19
A doctor in B.C. has started a petition seeking the assistance of local businesses to do everything they can to slow the spread of COVID-19. Dr. Alex van Duyvendyk, a physician in Kelowna, took the idea from seeing doctors ban together in other provinces to do what they can to help inform the public to slow the spread of the virus. Further, she points out that Canadians have the benefit of seeing what has and has not worked in other countries where COVID-19 was rampant before it began to peak here.
Dr. van Duyvendyk points out that while many businesses such as restaurants and gyms have been ordered to close or change their operations to encourage social distancing, many other businesses that are not considered essential remain open. In particular, the petition seeks to encourage those businesses remaining open to change their operations in order to prevent any person-t0-person contact. Further, the petition seeks to encourage the temporary closure of all non-essential businesses including car dealerships, liquor stores and nail salons.
In a time where people are beginning to call for a full Canada-wide lockdown in order to slow the spread, the mandated closure of non-essential businesses where person-to-person contact cannot be avoided is a distinct possibility.
The pandemic’s impact and associated guidelines are changing on a daily basis. We will continue to monitor the situation and provide updates on any changes having a significant impact on our clients.