Recovery still a tough go for B.C. businesses
August 21, 2022
Darren Gay’s niche video-rental business had already become precarious by New Years 2020, but it was stable enough that he was thinking of ways to diversify Black Dog Video’s operations on Commercial Drive.
Instead, his business was crushed by a customer base that largely just stayed home during COVID-19 restrictions and haven’t returned in enough numbers to help with the rent increase he was hit with in January, rising insurance costs and increasingly expensive prices to stock inventory.
“Our last day was June 25,” Gay said of his decision to finally pull the plug, “because I knew that I needed, like, five days to get everything out of there.”
Gay isn’t alone. There are signs a sizeable number of B.C. businesses are still under stress with sales that haven’t matched pre-pandemic levels while their costs are rising, the Canadian Federation of Independent Business found in a recent survey.
Some 17 per cent of respondents admitted to considering winding up their operations, or even declaring bankruptcy.
“It’s just the accumulation of all these” things, said Annie Dormuth, the federation’s director of provincial affairs for B.C.
Businesses have COVID-19-related debts from federal assistance programs they can’t repay because revenues have been slow to recover, Dormuth said, higher government costs from increasing employment insurance and Canada pension plan payments, and rising rents.
Difficulties finding employees, skyrocketing shipping costs and supply chain disruptions that make it harder to stock shelves add to the difficulties in keeping doors open.
Nationally, the CFIB survey found that business bankruptcies have increased since mid 2021, but that only represents “the tip of the iceberg” of struggling businesses. Many would simply close their doors before needing to declare bankrupty.
Measures that government could adopt that would help include increasing the forgivable portion of Canada Emergency Business Account loans to 50 per cent, extending the repayment deadline to the end of 2024 and increasing the small-business tax deduction to $600,000 from $500,000.
Dormuth said, in B.C., the province could rebate some of the $3.4 billion surplus in WorkSafeBC coffers back to the businesses that paid into it.
The survey found that 51 per cent of B.C. businesses haven’t recovered to pre-pandemic revenue levels and 56 per cent still carried pandemic debts.
“Property taxes is a big one, as well they’re dealing with provincial costs (with) employer-paid sick days that came into effect this year,” Dormuth said.
Source: Vancouver Sun
