Almost half of small employers reducing hours for staff due to COVID-19

One-fifth have started temporary layoffs: survey

Almost half of small employers reducing hours for staff due to COVID-19

Due to the economic effects of COVID-19, almost half (43 per cent) of small employers in Canada have reduced hours for staff, while one-fifth have started temporary layoffs.

One half have already seen a drop in sales, with four in 10 of those affected businesses reporting a decrease greater than 25 per cent, according to a survey by the Canadian Federation of Independent Business (CFIB).

"The early economic impacts of coronavirus on Canada's SMEs has been massive," says Dan Kelly, CFIB president. "Even more alarming is our finding that a full quarter of small firms would not be able to survive for more than a month with a drop in business income of more than 50 per cent."

Two-in-five employers (42 per cent) said they will have zero sales if face-to-face contact becomes impossible, found the survey of 8,730 employers, and the sectors most negatively affected are hospitality, arts/recreation, retail and personal services.

Almost half (47 per cent) say the pandemic has had an impact in terms of HR issues such as employee stress, managing employees with possible exposure to the virus, and work availability.

Additional measures needed from government

All small business owners should listen and respond to the advice of public health officials in order to keep their employees and customers safe, says Kelly.

"However, we must recognize that calls for self-isolation have massive economic consequences for many Canadian small businesses, especially as close to two-thirds of small firms would not be able to quickly shift more than 10 per cent of sales to online or telephone options."

While the government’s decision to waive the one-week EI waiting period and expand the Work-Sharing program were helpful moves, the CFIB is concerned with the calls to mandate employers to provide 14 sick leave days at a time when they are already experiencing tremendous cost pressures and decreases in revenues, says Corinne Pohlmann, CFIB's senior vice-president of national affairs.

"Governments need to step in and offer direct cash support to employees and the self-employed who are forced to self-isolate, as has happened in the U.K., Ireland, Norway, Sweden and Denmark."

When asked what additional measures governments should put in place to help them, 91 per cent said government should offer direct financial support for firms experiencing a significant drop in sales. In addition, small business owners suggest governments:

· provide temporary tax relief on income, payroll and sales taxes (69 per cent)

· cancel planned tax increases such as CPP/QPP and carbon tax (66 per cent)

· delay tax filing deadlines and eliminate penalties for late payments and remittance (65 per cent)

· introduce wage subsidies for businesses to retain staff (58 per cent)

· create incentives to boost consumer spending (46 per cent).

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