Logo StatCan COVID-19: Data to Insights for a Better Canada Impact of COVID-19 on businesses majority-owned by various sub-population groups and visible minorities, third quarter of 2021

by Shannon Chalmers, Shivani Sood and Chris Johnston

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This article provides disaggregated data to better understand the impact of COVID-19 on specific groups. Visit the Gender, Diversity and Inclusion Statistics Hub for more analysis, including disaggregated data on labour, public safety, health and more.

The COVID-19 pandemic continues to impact Canadians in different communities in numerous ways. Real gross domestic product (GDP) expanded 0.7% in June, following two consecutive monthly declines, placing total economic activity 1.5% below February 2020's pre-pandemic level.Note Growth in retail trade and accommodation and food services were influenced by the easing of public health measures in many provinces in June.

While all businesses in Canada have been impacted by the COVID-19 pandemic, different types of businesses have been impacted in different ways. This is also true for different communities that operate businesses in Canada.

Over a full year has passed since Canada felt the impact of the COVID-19 pandemic and as the recovery unfolds, Statistics Canada continues to report on its impacts on specific populations within Canada. From the beginning of July to early August, Statistics Canada conducted the Canadian Survey on Business Conditions to better understand the ongoing effects of the pandemic on businesses and business expectations moving forward. This article provides insights on those expectations.

This article explores results from the Canadian Survey on Business Conditions by looking at the businesses majority-ownedNote by women, First Nations, Métis or Inuit persons, immigrants to Canada and visible minorities.  In the third quarter 2021, differences were noted in various areas, such as long term optimism, in addition to obstacles such as rising input costs, increasing selling prices of goods and services, recruiting and retaining skilled employees and shortage of labour. Results for businesses majority-owned by First Nations, Métis or Inuit persons as well as businesses majority-owned by women reported a similar proportion of positive optimism over the upcoming year to all private sector businesses. Businesses majority-owned by immigrants and visible minorities were less likely to be optimistic than all private sector businesses.

Future outlook of businesses majority-owned by women have a positive future outlook

Businesses majority-owned by women accounted for 15.6% of all small and medium enterprises (SMEs) in 2017.Note Women-owned businesses were more prevalent in service industries such as retail trade (24.3%) and accommodation and food services (19.9%).Note

Over three-quarters of businesses majority-owned by women (76.7%) indicated that they have an optimistic future outlook over the next 12 months, up from just over two-thirds in the second quarter (68.3%). These businesses were as likely as all private sector businesses (74.8%) to be optimistic over the next 12 months. Businesses majority-owned by women were more likely to expect increases in their sales of goods and services (24.5%) and number of employees (18.6%) than all private sector businesses (21.3% and 14.5% respectively). In comparison, businesses majority-owned by women in the second quarter were less likely to expect increases in their sales of goods in services (16.3%) and number of employees (11.7%) than all private sector businesses (19.6% and 12.4% respectively).

Businesses majority-owned by women (53.5%) were as likely as all private sector businesses (55.8%) to report being able to take on more debt. Additionally, businesses majority-owned by women (53.7%) were as likely as all private sector businesses (53.0%) to report being able to operate for 12 months or more at their current level of revenue and expenditures before considering closure or bankruptcy. For comparison, in the second quarter, about two-thirds of both businesses majority-owned by women (66.9%) and all private sector businesses (67.8%) believed the same.

Over one-third (37.0%) of businesses majority-owned by women expect to face challenges in recruiting skilled employees, slightly higher than all private sector businesses (34.6%). Nearly one-third (32.5%) of businesses owned by women expect the rising costs of inputs to be an obstacle compared to nearly two-fifths of all private sector businesses (39.9%) in the third quarter. This trend held from second quarter to third quarter where businesses majority-owned by women were also less likely (32.7%) to consider rising costs of inputs to be an obstacle to their business as all private sector businesses (39.1%).

Businesses majority-owned by First Nations, Métis or Inuit persons expect to face more obstacles

According to the 2016 census, 4.9% of Canada’s population consisted of First Nations, Métis or Inuit persons.Note  In 2017, First Nations, Métis or Inuit persons owned 1.4% of SMEs.Note

About three-quarters of businesses majority-owned by First Nations, Métis or Inuit persons indicated having a positive future outlook (73.8%) over the next 12 months, similar to all private sector businesses (74.8%).  By comparison, in the second quarter, these businesses were less likely (66.7%) to be optimistic than all private sector businesses (73.1%). Two-thirds (66.1%) of these businesses can continue to operate for 12 months or more at current revenue and expenditure levels before considering closure or bankruptcy. In contrast, over half (53.0%) of private sector businesses reported they could operate at current levels for 12 months or more before considering closure or bankruptcy. Businesses majority-owned by First Nations, Métis or Inuit persons (55.1%) were as likely as private sector businesses (55.8%) to be able to take on more debt.

Over the next three monthsNote , a larger proportion of businesses majority-owned by First Nations, Métis or Inuit persons expect to face obstacles such as recruiting skilled employees (49.4%), rising cost of inputs (47.3%), retaining skilled employees (44.3%), and shortage of labour force (42.2%), compared to all private sector businesses (34.6%, 39.9%, 24.5%, and 30.8% respectively).  The percentage of businesses majority-owned by First Nations, Métis or Inuit persons expecting each of these obstacles in the third quarter was significantly higher than it was in the second quarter (25.4%, 31.3%, 23.2% and 20.5% respectively).

When compared with all private sector businesses, businesses majority-owned by First Nations, Métis or Inuit persons more likely to expect an increase in profitability (17.0%), and at the same time, were more likely to expect an increase in the number of employees (23.8%), selling price (30.5%) and demand (27.4%) for goods and services offered. One in ten of these businesses (9.6%) expected a decrease in sales compared with one in seven (15.4%) of all private sector businesses.

Businesses majority-owned by immigrants to Canada less likely to have a positive future outlook

Immigrants to Canada constituted over one-fifth (21.9%) of the population in Canada. Note Immigrants to Canada are the primary decision makers for approximately 25.0% of SMEs in Canada, a proportion that has been rising over the past decade.Note This section presents results on individuals born outside of Canada who run businesses in Canada.

Businesses majority-owned by immigrants to Canada were less likely (67.8%) to indicate having a positive future outlook over the next 12 months than all private sector businesses (74.8%).

Over two-fifths (44.1%) of businesses majority-owned by immigrants to Canada reported they could continue to operate for 12 months or more at current revenue and expense levels before considering closure or bankruptcy. In contrast, more than half (53.0%) of all private sector businesses reported they could do the same. Businesses majority-owned by immigrants were less likely (49.9%) to be able to take on more debt than all private sector businesses (55.8%).

Businesses majority-owned by immigrants to Canada reported that they were less likely to expect to face obstacles such as recruiting skilled employees (27.5%), shortage of labour force (25.2%) and retaining skilled employees (22.1%).  In contrast, private sector businesses are more likely to expect rising costs of inputs (39.9%), recruiting skilled employees (34.6%) and shortage of labour force (30.8%) to be obstacles.

Over the next three months, businesses majority-owned by immigrants were less likely than all private sector businesses to expect increases in sales of goods and services offered (18.5%), number of employees (13.6%) and profitability (12.3%).  More than two-fifths (42.7%) of businesses majority-owned by immigrants expect to see an increase in operating expenses over the next three months, compared with 38.2% of all private sector businesses.

Businesses majority-owned by visible minorities less likely to be optimistic

According to the 2016 census, close to one-quarter (22.3%) of the Canadian population were visible minorities.Note In 2017, nearly one-eighth (12.3%) of SMEs were majority-owned by visible minorities. This proportion has remained relatively the same between 2007 and 2017.Note For the purposes of the Canadian Survey on Business Conditions, visible minorities are defined as individuals, other than Indigenous persons, who self-identified as non-white in colour or race, regardless of place of birth.

Businesses majority-owned by visible minorities were less likely to indicate being optimistic about their future over the next 12 months (64.3%) compared to all private sector businesses (74.8%). These findings are relatively unchanged from the second quarter.

Businesses majority-owned by visible minorities were less likely than all private sector businesses to be able to continue to operate at current revenue and expense levels for 12 months or longer before considering laying off staff (36.9%) or considering closure or bankruptcy (45.3%). Over two-fifths (43.5%) of businesses majority-owned by visible minorities could take on more debt compared with 55.8% of all private sector businesses.

Over the next three months, rising costs of inputs (44.1%) and retaining skilled employees (27.5%) were more likely to be obstacles for businesses majority-owned by visible minorities compared with all private sector businesses (39.9% and 24.5% respectively). Businesses majority-owned by visible minorities are more likely to expect increases in the demand for their products and services (24.3%), sales of goods and services (22.5%) and number of employees (15.6%), than all private sector businesses (23.2%, 21.3% and 14.5% respectively).

Appendix


Table 1
Future operations over the next 12 months, second and third quarter of 2021
Table summary
This table displays the results of Future operations over the next 12 months Business can continue to operate for 12 months or more, Before considering laying off staff, Before considering closure or bankruptcy, Q2 2021 and Q3 2021, calculated using percent units of measure (appearing as column headers).
Business can continue to operate for 12 months or more
Before considering laying off staff Before considering closure or bankruptcy
Q2 2021 Q3 2021 Q2 2021 Q3 2021
percent
All private sector businesses 61.2 48.4 67.8 53.0
Businesses majority-owned by women 57.2 49.5 66.9 53.7
Businesses majority-owned by First Nations, Métis or Inuit persons 57.5 55.1 67.9 66.1
Businesses majority-owned by immigrants to Canada 57.2 39.1 60.9 44.1
Businesses majority-owned by visible minorities 55.7 36.9 62.8 45.3

Table 2
Businesses' ability to take on more debt, third quarter of 2021
Table summary
This table displays the results of Businesses' ability to take on more debt Business can take on more debt, Business cannot take on more debt and Business does not know if they can take on more debt, calculated using percent units of measure (appearing as column headers).
Business can take on more debt Business cannot take on more debt Business does not know if they can take on more debt
percent
All private sector businesses 55.8 18.3 25.9
Businesses majority-owned by women 53.5 18.1 28.4
Businesses majority-owned by First Nations, Métis or Inuit persons 55.1 22.5 22.4
Businesses majority-owned by immigrants to Canada 49.9 19.1 31.0
Businesses majority-owned by visible minorities 43.5 20.9 35.6

Table 3
Future outlook over the next 12 months, second and third quarter of 2021
Table summary
This table displays the results of Future outlook over the next 12 months Q2 2021, Q3 2021, TOTAL optimistic, TOTAL not optimistic and Unknown, calculated using percent units of measure (appearing as column headers).
Q2 2021 Q3 2021
TOTAL optimistic TOTAL not optimistic Unknown TOTAL optimistic TOTAL not optimistic Unknown
percent
All private sector businesses 73.1 12.0 15.0 74.8 11.2 14.0
Businesses majority-owned by woman 68.3 14.0 17.7 76.7 10.4 12.8
Businesses majority-owned by First Nations, Métis or Inuit persons 66.7 14.2 19.1 73.8 14.9 11.3
Businesses majority-owned by immigrants to Canada 61.6 18.5 20.0 67.8 12.7 19.6
Businesses majority-owned by visible minorities 65.9 15.9 18.3 64.3 12.4 23.3

Table 4
Selected obstacles for majority-owned businesses by various sub-population groups and visible minorities, second and third quarter of 2021
Table summary
This table displays the results of Selected obstacles for majority-owned businesses by various sub-population groups and visible minorities. The information is grouped by Obstacles (appearing as row headers), All private sector businesses, Businesses majority-owned by women, Businesses majority-owned by First Nations, Métis or Inuit persons, Businesses majority-owned by immigrants to Canada, Businesses majority-owned by visible minorities, Q2 2021 and Q3 2021, calculated using percent units of measure (appearing as column headers).
Obstacles All private sector businesses Businesses majority-owned by women Businesses majority-owned by First Nations, Métis or Inuit persons Businesses majority-owned by immigrants to Canada Businesses majority-owned by visible minorities
Q2 2021 Q3 2021 Q2 2021 Q3 2021 Q2 2021 Q3 2021 Q2 2021 Q3 2021 Q2 2021 Q3 2021
percent
Rising cost of inputs 39.1 39.9 32.7 32.5 31.3 47.3 40.0 38.0 38.4 44.1
Shortage of labour force 24.1 30.8 23.4 30.1 20.5 42.2 19.0 25.2 18.4 26.6
Recruiting skilled employees 27.8 34.6 26.9 37.0 25.4 49.4 23.3 27.5 21.2 30.8
Retaining skilled employees 22.0 24.5 26.8 26.6 23.2 44.3 23.6 22.1 21.1 27.5
Fluctuations in consumer demand 27.4 23.3 31.0 25.9 26.4 29.8 32.5 28.7 32.1 33.5

Table 5
Increase in business expectations of majority-owned businesses by various sub-population groups and visible minorities over the next three months, second and third quarter of 2021
Table summary
This table displays the results of Increase in business expectations of majority-owned businesses by various sub-population groups and visible minorities over the next three months All private sector businesses, Businesses majority-owned by women, Businesses majority-owned by First Nations, Métis or Inuit persons, Businesses majority-owned by immigrants to Canada, Businesses majority-owned by visible minorities, Q2 2021 and Q3 2021, calculated using percent units of measure (appearing as column headers).
All private sector businesses Businesses majority-owned by women Businesses majority-owned by First Nations, Métis or Inuit persons Businesses majority-owned by immigrants to Canada Businesses majority-owned by visible minorities
Q2 2021 Q3 2021 Q2 2021 Q3 2021 Q2 2021 Q3 2021 Q2 2021 Q3 2021 Q2 2021 Q3 2021
percent
Number of employees 12.4 14.5 11.7 18.6 14.9 23.8 6.8 13.6 8.8 15.6
Sales of goods and services offered by the business or organization 19.6 21.3 16.3 24.5 20.6 24.0 11.7 18.5 12.1 22.5
Selling price of goods and services 20.9 22.9 17.8 22.9 13.0 30.5 18.9 23.3 17.5 20.3
Demand for products and services offered 20.6 23.2 19.0 27.3 17.3 27.4 13.1 20.8 14.0 24.3
Profitability 13.0 14.3 13.2 15.7 12.1 17.0 9.8 12.3 9.0 14.1
Operating expenses 39.4 38.2 36.2 38.9 41.7 43.3 36.6 42.7 36.7 48.9

Methodology

From July 2 to August 6, 2021, representatives from businesses across Canada were invited to take part in an online questionnaire about how COVID-19 is affecting their business and business expectations moving forward. The Canadian Survey on Business Conditions uses a stratified random sample of business establishments with employees classified by geography, industry sector, and size. An estimation of proportions is done using calibrated weights to calculate the population totals in the domains of interest. The total sample size for this iteration of the survey is 36,294 and results are based on responses from a total of 16,925 businesses.

References

Statistics Canada. (2021). Canadian Survey on Business Conditions, second quarter of 2021.

Statistics Canada. (2021). Canadian Survey on Business Conditions, third quarter of 2021.

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