Respondents reported severely lower demand, revenue declines of at least 20%, and requests for rent relief
Business owners across the country are reeling from substantially lower revenues, decreased demand for their services, and social distancing measures, according to a survey by Statistics Canada and the Canadian Chamber of Commerce.
Of more than 12,600 businesses that responded to an online questionnaire from April 3 to 24, over half saw a 20% year-on-year decline in their first-quarter revenue. That included 32.3% that reported decreases of 40% or more, and 21.2% who said their revenue dropped by 20% to 40%.
Over half of businesses in Alberta (57.7%), Ontario (56.3%), British Columbia (54.8%), Newfoundland and Labrador (53.5%), and Saskatchewan (52.8%) said their revenue slumped by 20% or more.
The survey also found nearly two thirds of businesses (34.8%) reportedly being highly affected by lower demand for their products or services. Nearly half of respondents (48.5%) said they were highly affected by the need to cancel services they offered, with the heaviest impact reported in the accommodation and food services (88.7%), arts, entertainment, and recreation (87.1%), and retail trade (72.5%) sectors.
Against that backdrop, over one fourth (28.6%) of the participating businesses said they’d requested credit from financial institutions to cover operating costs, with over three quarters (77.3%) of those requests either fully or partially approved, according to respondents. Many survey respondents also expressed worries on rent, with one fifth (20%) saying they’ve had to ask for deferrals on their payments.
In line with that, a new report from Colliers Canada indicates that 21% of 7,100 retail, industrial, and office tenants it polled have requested April rent relief. Tenants whose businesses were completely closed were 3.4 times more likely to request rent relief, and small-business tenants were 2.7 times more likely to ask for relief than regional, national, or international tenants.
On April 24, Ottawa announced its Canada Emergency Commercial Rent Assistance (CECRA) program to provide more help for small businesses. But according to John Duda, President of Real Estate Management Services at Colliers Canada, the federal government needs to clarify certain elements of the program before landlords can properly decide on whether they would participate.
“More information is needed in a number of important areas, including how the program will treat landlords who have agreed to revised rental payment terms for April or May with their tenants, when the loan funds will be available and how this program will be rolled out for each province,” Duda said.