The COVID-19 pandemic is having a “profound impact” on Canada’s small businesses, says Lisa Kramer, a professor of finance at U of T Mississauga.
Toronto’s medical officer yesterday called on all non-essential businesses, like clothing stores and salons, to close. The announcement is an expansion of the earlier mandated closure of theatres nightclubs, restaurants and bars, with the exception of take-out and delivery. While the recent request for additional closures isn’t mandatory, many businesses have already closed their doors in an effort to help limit the spread of the virus.
These closures, combined with people following expert advice to stay home as much as possible and practice social distancing, means businesses are feeling the pinch.
Kramer says the additional measures will hit the service sector “especially hard.”
She explains businesses are trying to pay employees, but for many small businesses that may not be possible because they are already working with such thin margins and have other bills to pay, including rent.
“We’re lucky we have a government that’s trying to be responsive,” Kramer says, noting the government is loosening restrictions for those who need to access employment insurance and providing access to short-term loans for business.
The overall impact on business will depend on how long the pandemic lasts. If it’s a couple of weeks, ideally businesses will get back up and running, but if businesses can’t reopen in the coming weeks, “inevitably we’ll see some small businesses and even large businesses fail,” Kramer says.
While the government has introduced short-term measures to help, Kramer says consumers who have the financial means can also step up and help.
Some businesses are taking orders over the phone or online and offering delivery, Kramer says. Some restaurants are still offering take-out and delivery. If accessing goods or services now isn’t possible, gift cards may be an option. Kramer says the money now will mean businesses can continue to pay employees.
There’s also the option of making a donation. Some arts organizations allow the cost of a ticket for a cancelled performance to be donated, with patrons receiving a tax receipt, Kramer says. Or donations can be made to organizations like The AFC, which is a last resort for those in the entertainment industry who are struggling to pay bills.
Helping businesses is much the same as reaching out to a neighbour to help, because it’s ultimately about helping people, Kramer says, explaining small businesses are run by individuals or families, and they employ people who are “equally affected by the barrage of bad news.” Their income, she adds, is in jeopardy.
While many businesses are having to shut their doors, Kramer notes there are still workers on the front lines of grocery stores, pharmacies and gas stations, which remain open. They have become providers of essential services, yet they are paid the least, she says.
“We need to think deeply about how we value work in our country,” Kramer says, adding there’s a lot to be said about the fabric of a community that knows how to help one another.