Logo StatCan COVID-19: Data to Insights for a Better Canada Impact of COVID-19 on Small Businesses in Canada, May 2020

by Stephanie Tam, Shivani Sood, and Chris Johnston

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As a result of the widespread measures taken to contain the spread of COVID-19, the Canadian economy has dramatically declined over the past few months and has significantly impacted the ability of businesses in Canada to operate. The latest gross domestic product by industry release for April 2020 reported that real gross domestic product (GDP) dropped 11.6% in April, following a 7.5% decline in March. All 20 industrial sectors of the Canadian economy were down, producing the largest monthly decline since the series started in 1961. The economy was 18.2% below its February level, the month before the COVID-19 measures began.Note 

As Canada’s economy moved towards a recovery, Statistics Canada ran the Canadian Survey on Business Conditions to better understand the ongoing effects on businesses as the economy begins to reopen. Based on the results of the survey, while the majority of businesses in Canada were impacted, small businesses with 1 to 99 employees were slightly more affected by the recent economic downturn even as businesses began reopening.

Revenues: Small businesses were more likely than businesses with 100 or more employees to see revenues down by 40% or more from April 2019

The majority of businesses of all sizes reported revenues down from April 2020 when compared with April 2019. Approximately two-fifths of businesses with 5 to 19 employees (41.4%) and 20 to 99 employees (39.1%) reported that their revenues were down 40% or more. However, less than three-tenths (27.7%) of businesses with 500 or more employees said the same. In fact, nearly one-quarter (23.7%) of businesses with 500 or more employees said there was no change in their revenues, compared to less than one-fifth of businesses with 20 to 99 employees (16.5%) and 5 to 19 employees (16.1%) that said the same.


Table 1
Revenues: Small businesses were more likely than businesses with 100 or more employees to see revenues down by 40% or more from April 2019
Table summary
This table displays the results of Canadian Survey on Business Conditions: Impact of COVID-19 on businessses in Canada
Revenues: Small businesses were more likely than businesses with 100 or more employees to see revenues down by 40% or more from April 2019 Percentage of businesses that reported no change in revenue, Percentage of businesses that reported a 1% to less than 20% decline in revenue, Percentage of businesses that reported a 20% to less than 40% decline in revenue and Percentage of businesses that reported a 40% or more decline in revenue (appearing as column headers).
Percentage of businesses that reported no change in revenue Percentage of businesses that reported a 1% to less than 20% decline in revenue Percentage of businesses that reported a 20% to less than 40% decline in revenue Percentage of businesses that reported a 40% or more decline in revenue
All employment sizes 19.6 10.6 17.5 42.1
1 to 4 employees 22.5 9.7 15.3 43.4
5 to 19 employees 16.1 11.9 18.8 41.4
20 to 99 employees 16.5 11.1 23.4 39.1
100 to 249 employees 12.6 16.8 20.3 31.3
250 to 499 employees 21.2 14.5 19.9 32.3
500 or more employees 23.7 13.2 20.7 27.7

Layoffs: Small businesses with 5 to 99 employees were more likely to report laying off at least one staff due to the pandemic

Over two-fifths (41.7%) of businesses with 5 to 19 employees reported laying off staff. Nearly half (47.4%) of businesses with 20 to 99 employees reported the same. Conversely, less than one-fifth (15.9%) of businesses with 1 to 4 employees, and less than one-quarter (23.0%) of businesses with 500 or more employees reported laying off staff.

Of the businesses that laid off at least 1 employee, nearly three-quarters (73.0%) of businesses with 1 to 4 employees, over three-fifths (61.2%) of businesses with 5 to 19 employees, and nearly half (46.8%) of businesses with 20 to 99 employees reported laying off 50% or more of their staff. In contrast, over a quarter (27.0%) of businesses with 500 or more employees reported the same.

Chart 1 Percentage of businesses that reported layoffs due to the COVID-19 pandemic, amounting to 50% or more of their workforce

Data table for Chart 1 
Data table for Chart 1
Table summary
This table displays the results of Layoffs: Small businesses were more likely to report laying off at least one staff due to the pandemic Of businesses that laid off staff, percentage of businesses that laid of 50% or more of their workforce (appearing as column headers).
Of businesses that laid off staff, percentage of businesses that laid of 50% or more of their workforce
All employment sizes 61.3
1 to 4 employees 73.0
5 to 19 employees 61.2
20 to 99 employees 46.8
100 to 249 employees 41.4
250 to 499 employees 48.1
500 or more employees 27.0

Funding or credit: Small businesses were more likely to be approved for funding from government programs put in place to support businesses during the pandemic

Due to COVID-19, various government programs focusing on funding or credit were made available to support businesses. The Canada Emergency Business account (CEBA) provides eligible small businesses and non-profits with a loan up to $40,000, designed to help cover operating costs. The Canada Emergency Wage Subsidy (CEWS) is a subsidy of 75% of employee wages for eligible businesses, to re-hire previously laid off staff due to COVID-19 and prevent further job losses. The Temporary 10% Wage Subsidy is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA).Note 

Over half (52.9%) of businesses with 5 to 19 employees, over two-fifths (41.3%) of businesses with 1 to 4 employees and nearly one-third (30.7%) of businesses with 20 to 99 employees were approved for the CEBA.

Small businesses with 5 to 99 employees were more likely to be approved for the CEWS than larger businesses. Two-fifths (40.7%) of businesses with 20 to 99 employees were approved for the CEWS, compared to under one-third (31.4%) of businesses with 500 or more employees. The CEWS allowed some businesses to hire back a share of their workforce. Nearly two-fifths (39.4%) of businesses with 1 to 4 employees and close to one-third (32.7%) of businesses with 5 to 19 employees reported they were able to hire back 80% or more of their workforce. Over two-fifths (42.7%) of businesses with 500 or more employees were able to do the same with the CEWS.

Under one-third (31.1%) of businesses with 20 to 99 employees were approved for the Temporary 10% Wage Subsidy, while under one-fifth of businesses with 250 to 499 employees (18.3%) and 100 to 249 employees (16.1%) were approved for the subsidy.

Chart 2

Data table for Chart 2 
Data table for Chart 2
Table summary
This table displays the results of Funding or credit: Small businesses were more likely to be approved for funding from government programs put in place to support businesses during the pandemic. The information is grouped by Number of employees (appearing as row headers), Percentage of businesses approved for funding (appearing as column headers).
Number of employees Percentage of businesses approved for funding
Percentage of businesses approved for the Canada Emergency Business Account Percentage of businesses approved for the Canada Emergency Wage Subsidy Percentage of businesses approved for the Temporary 10% Wage Subsidy
All employment sizes 43.1 22.6 18.3
1 to 4 employees 41.3 12.6 11.0
5 to 19 employees 52.9 32.2 26.3
20 to 99 employees 30.7 40.7 31.1
100 to 249 employees 4.7 38.5 16.1
250 to 499 employees 6.2 31.4 18.3
500 or more employees 1.7 31.4 4.4

Rent deferral: Small and medium sized businesses were more likely to have their request for rent or mortgage payment deferral rejected

Of businesses that make rent or mortgage payments, small businesses with 1 to 4 employees (7.2%), 20 to 99 employees (5.5%), 5 to 19 employees (3.9%), and medium businesses with 100 to 249 employees (5.9%) were more likely than larger businesses with 500 or more employees to have their request for payment deferral during the COVID-19 pandemic rejected. Meanwhile for the same group of businesses, over one-quarter of businesses with 5 to 19 employees (27.1%) and 20 to 99 employees (25.5%) reported having their payments deferred. 6.0% of businesses with 500 or more employees had their payments deferred.

Chart 3

Data table for Chart 3 
Data table for Chart 3
Table summary
This table displays the results of Rent deferral: Small businesses were more likely to have their request for rent or mortgage payment deferral rejected . The information is grouped by Number of employees (appearing as row headers), Businesses that made rent or mortgage payments (appearing as column headers).
Number of employees Businesses that made rent or mortgage payments
Percentage of businesses that had their payments deferred Percentage of businesses that had their request for payment deferral rejected
All employment sizes 23.6 5.7
1 to 4 employees 20.8 7.2
5 to 19 employees 27.1 3.9
20 to 99 employees 25.5 5.5
100 to 249 employees 23.0 5.9
250 to 499 employees 19.0 0.7
500 or more employees 6.0 0.0

Protective measures: Majority of businesses plan to implement protective measures to protect employees and customers during the pandemic

Over 75% of businesses of all sizes reported that they would be likely or very likely to provide facemasks, gloves, and other personal protective equipment to employees once transitioned back to on-site work as restrictions are eased. Over 90% of businesses of all sizes reported that they would insist that employees displaying any signs of illness stay home once transitioned back to on-site work. Nearly 90% of businesses are likely or very likely to increase sanitization of the workplace.

Chart 4

Data table for Chart 4 
Data table for Chart 4
Table summary
This table displays the results of Protective measures: Majority of businesses plan to implement protective measures to protect employees and customers to during the pandemic. The information is grouped by Number of employees (appearing as row headers), Businesses that may implement protective measures once transitioned back to on-site work (appearing as column headers).
Number of employees Businesses that may implement protective measures once transitioned back to on-site work
Percentage that are likely or very likely to provide facemasks, gloves, and other personal protective equipment Percentage that are likely or very likely to insist that employees displaying any signs of illness to stay home Percentage that are likely or very likely to increase sanitization of the workplace
All employment sizes 79.0 91.2 87.0
1 to 4 employees 75.9 90.9 83.8
5 to 19 employees 80.6 90.9 88.4
20 to 99 employees 84.1 92.5 93.4
100 to 249 employees 87.2 94.4 94.9
250 to 499 employees 79.2 90.6 91.4
500 or more employees 92.8 95.5 95.8

Methodology

From May 29th to July 3rd, representatives from businesses across Canada visited Statistics Canada's website and took part in the online questionnaire about how COVID-19 is affecting their business. This iteration of the Canadian Survey on Business Conditions used a stratified random sample of business establishments with employees classified by geography, industry sector, and size. Estimation of proportions is done using calibrated weights to calculate the population totals in the domains of interest.

References

Statistics Canada - Canadian Survey on Business Conditions: Impact of COVID-19 on businesses in Canada, May 2020.

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