As the number of new COVID-19 daily cases and hospitalizations decline across Ontario, small businesses are preparing for the new normal. So, what is the new normal?
While many businesses are eagerly awaiting further announcements from Premier Ford that will present new opportunities heading into and after Step 3, there remain many challenges to be managed, depending on your type of business, size of operation, and confirmed restrictions.
One of the most concerning issues is the possibility of rising bankruptcies from excessive business debt loads. The Canadian Chamber of Commerce is warning there could be several bankruptcies among heavily indebted companies particularly in the travel, tourism, and hospitality sectors as well as in the hard-hit retail and services sector.
Many companies and industries that rely on seeing customers will struggle with reduced cash flow and high debt levels well into 2022. The Canadian Chamber is calling for an extension to the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) until next spring for companies in hard-hit industries to cover costs as business needs slowly normalize.
While the province sees progress and is excited at the prospect of more openings henceforth, many businesses will continue to struggle to survive as they operate under reduced and continued strict regulations. Chambers of commerce and boards of trade across Ontario have called for evidence-based metrics for reopening Ontario’s economy as we work together towards a steady and inclusive recovery. Business wants to see the data so business can be part of the solution.
Continued financial supports such as an additional round of the Ontario Small Business Support Grant are essential and critical to assist small business in this slow, methodical re-opening.
The Ontario Chamber of Commerce has called on the provincial government to expand the small business grants as opposed to making more loans available because of the looming business debt crisis in the small business sector. At the local level, the Greater Kitchener Waterloo Chamber, for example, has been a leader in calling for more small business support since the last lockdown began and stay-at-home orders started in April of this year.
Since last summer, the message to all levels of government is that COVID-19 restrictions present serious cash flow challenges for small businesses facing fewer customers, lower sales, and overall lower revenues. The rent and wage subsidies provide support for specific business functions; however, many operations must continue to operate with lower cash levels. Government support for functions apart from wages and rent will be necessary until the end of 2021 and far beyond as business slowly reboots.
Another critical issue that governments need to address is clear guidelines for what companies can ask or expect of employees or customers in relation to vaccinations. Many businesses may be walking into legal landmines if they start asking employees, customers, and clients about vaccination status. It is clear governments need to get out in front of this issue and provide companies and the public with guidance.
Another imminent issue is what is the new normal in hiring going to look like. A recent report from human resources firm Ceridian indicated that nearly 70 per cent of Canadian employers expect to hire more contract and freelance workers over the next two years as their businesses emerge from the pandemic, with more than half of the online respondents anticipating expansion of their workforce over the next year as the economy reopens.
The pandemic has shifted the needs and demands of both business and their workforce. The rise in work-from-home means that workers are no longer tied to one physical location. Some employees do not want to return to pre-COVID environments and are demanding more work-life balance.
While consumers and business can clearly see the light at the end of the tunnel, all levels of government need to understand that the economy is not fully open and operating. So, the new normal for business is uncertain and unclear at best. Continued government financial support, clear guidelines for business operation, clarity on vaccinations, and a timeline to fuller re-opening that gets us to the new normal is vital for our province.
Ian McLean is President and CEO of the Greater Kitchener Waterloo Chamber of Commerce and Chair of McLean and Associates. He is the host of ‘Business to Business’ on 570 News and was previously a columnist at the Waterloo Chronicle. McLean served as City of Waterloo councillor from 2003 to 2010, chairing the finance and strategic planning committees during his tenure.