Majority of Island businesses surveyed question their viability if lockdown continues

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MANITOULIN – Half of the businesses on Manitoulin Island could face significant financial impacts due to COVID-19, according to a new report from Workforce Planning for Sudbury and Manitoulin (WPSM) on the impacts of COVID-19 businesses in the City of Greater Sudbury as well as the districts of Sudbury and Manitoulin.

“More than half of businesses are worried that in the coming months, they won’t be able to stay open or remain viable,” said WSPM executive director Reggie Caverson. “Half responded saying this is going to have a significant financial impact. Just from a business perspective, that’s extremely critical in terms of what could be happening on the Island if things continue.”

The WPSM study took place to get a better sense of the impacts on the region’s business community, since nationwide statistics of job losses do not illustrate these outcomes. These data give both statistics and business owner perspectives which will be invaluable in the future

“We need to grind down to what’s happening in the local communities so we have the foundation to start building from,” Ms. Caverson said.

WPSM, which gathers statistics on the labour market to help organizations and individuals plan for the future, assembled a report for each of the regions in its catchment area of the City of Greater Sudbury and the districts of Sudbury and Manitoulin. The survey was available from April 27 to May 4, revealing the thoughts of business managers at that point in time.

Results from the voluntary business survey show a mix of impacts on businesses due to the pandemic. About a third of Manitoulin businesses said the pandemic could put them out of business, half of the businesses said it would significantly impact their financial situation and the remaining 20 percent said they felt confident they could survive COVID-19.

Half of Manitoulin businesses have temporarily shut down while 29 percent have reduced hours, staffing and business operations. A quarter of Island businesses are continuing operations remotely and 10 percent (roughly four respondents) said their business had increased by the time of the survey.

Just 48 of the approximately 1,088 businesses in the District of Manitoulin responded to WPSM’s survey, which was shared through this newspaper. Although the response rate of about four percent of businesses may not offer the most comprehensive glimpse into the state of the business world, the head of WPSM said the respondents were a cross-section of the Island economy as a whole.

“Our survey is not a statistically representative sample,” said Ms. Caverson. “We ran into an issue in Sudbury District as well where there’s a lot of seasonal operators that may not be up and running yet and not answering business-related communications.”

About half of responding Manitoulin businesses have shifted to phone or online ordering to continue their business activities and 13 percent have kept their storefronts open, likely for essential services such as groceries or pharmacies. Three in five businesses are restricting spending because of the uncertainty.

Between February 1 and April 1, the number of businesses that employed fewer than 10 people shrunk from 49 percent to 37 percent. At the same time, businesses with no employees grew from 28 percent to 47 percent.

Layoffs have hit the Island workforce particularly hard. Of the 20 businesses that answered the question, there were a total of 126 layoffs—an average of five employees for every one of the responding businesses. Half of those layoffs (67) were full-time jobs, 34 were part-time, 22 were seasonal and three were contract jobs.

When looking at employee impacts from a business perspective, 30 percent of responding organizations said they had closed temporarily and were not paying employees during the closure. Others have focused on educating employees and connecting them to government assistance programs.

For businesses staying open, nine percent of respondents said they continue to pay employees who are not working due to quarantine or illness. Of all 37 businesses that answered this section, none was asking employees to use their vacation, sick or personal days during the pandemic.

“That’s a really important piece because it hasn’t been the case in other locations. Thankfully Greater Sudbury and Sudbury District were similar but I’m definitely hearing that is an issue in other parts of the province,” said Ms. Caverson. 

For the small number of companies that have seen an increase in business, it appears that only one has hired extra help. One additional full-time and one part-time position have been created to keep up with demand.

Despite business pressures, the majority of new hires have been brought into the companies at the same level of compensation as in a normal time period. One respondent said the new-hire compensation was higher than the normal level.

The most common request from responding businesses was for an increase in their fellow Islanders promoting and supporting local services, businesses and programs, both now and especially after the pandemic. Others have requested aid in long-term planning to re-open later in the year, and supporting businesses that wish to re-open after enacting increased safety measures such as sanitation.

Several respondents shared concerns about travel on and off Manitoulin Island as well as on-Island traffic. Responses included the desire for limiting visitors as well as finding solutions to the travel restrictions in M’Chigeeng.

On the subject of government aid, 97 percent of respondents said they were aware of funding programs from Canada and Ontario. However, only 59 percent had accessed or planned to access those programs, while just 54 percent of respondents believed that those programs would actually benefit their business.

Ms. Caverson said Manitoulin respondents’ confidence in the funding programs was far lower than other surveyed areas, but she acknowledged the many small businesses that do not meet the existing criteria, as well as the fact that many were just starting up when this survey was conducted.

The financial impacts ranged between responding businesses at the beginning of May. Sixty-five percent of respondents said they had either been impacted by less than $20,000 or not at all, but 14 percent said they had lost between $20 and $50 thousand. About six businesses estimated they had already lost $100,000 at the beginning of May.

Although 41 percent of businesses said they should be able to survive the pandemic on Manitoulin, 27 percent said they would not last past three months.

“That would be frightening for any economy. We really do not know the impact of all the financial supports provided by the government. FedNor just announced another support mechanism for small businesses which may benefit Manitoulin employers but we really don’t know at this time,” said Ms. Caverson.

Ms. Caverson said WPSM has plans for further studies in May and June to gather some rough trends and identify the changes to area businesses.

“We’re hearing from businesses that want to tell their story but they feel there isn’t anybody to tell. This is a lousy time and a lot of businesses are shutting down, so we see this as an opportunity to let them share what’s going on so we can plan better as we all move forward,” she said.

Future surveys are expected to gather more information about the region’s businesses’ responses to government funding programs.