A significant share of Canadian businesses have only a few months operating at their current revenues and spending levels before they’ll face shutting down or making more staff cuts, Statistics Canada says.
In a survey of Canadian businesses, 19.3% said they have fewer than six months in prevailing conditions before they’d have to consider further layoffs, closure or bankruptcy.
In the food and travel sector, more than one-third of firms (34.7%) would face drastic measures within that time period.
The risk was also elevated in the cultural industries sector (31.5%) and in the arts, entertainment and recreation sector (26.8%), StatsCan said.
So far, more than one-quarter (28.4%) of businesses have laid off workers due to the pandemic, and another 40% have reduced working hours, the survey found.
For firms with layoffs, 61.3% said they’ve laid off at least half of their workers.
This share rose to over 80% in hard-hit sectors, such as the arts and entertainment sector, the food and travel sector, and the agriculture, forestry, fishing and hunting sector, StatsCan said.
The survey also found that 23.6% of businesses had rent or mortgage payments deferred due to the pandemic, and that 5.7% had their deferral requests rejected.
Most businesses (60.1%) either haven’t sought deferrals or weren’t offered them, it said.
Looking ahead, StatsCan’s survey found that almost two-thirds of companies (65.8%) expect their employee headcount to remain the same over the next three months; another 15.1% see their employment numbers rising.
Businesses also expect to see more employees working remotely, even after the pandemic ends.
Currently, about one-third (32.6%) of businesses said at least 10% of their workforces are now working remotely, up from 16.6% before the pandemic.
Post-pandemic, 22.5% of businesses expect to continue with more than 10% of their staff working remotely, StatsCan said.
In certain industries, such as the information and cultural sector, almost half (47.2%) of businesses expect working remotely to continue. In the professional, scientific and technical services sector, the share was 44.5%.