An update on how area businesses are doing from the recent COVID-19 Impact Assessment and Recovery Project
On Monday, June 28, Whitecourt town council heard their findings. Josh Burger, Manager, Government Liaison and Public Affairs along with Ballad walked into Council with the details.
“Reaching out to the town that led to the early stages of the pandemic found that COVID-19 affected 92 percent of the town’s businesses. At that time, there was a lot of uncertainty as to whether these effects were temporary or permanently and how this pandemic will affect businesses. ”
Burger presented the obvious. “The impact of COVID has been enormous whether at the regional, provincial, national or international level. There is still a lot of uncertainty about the effects of the pandemic. We know it will be felt in the coming years, and there will be a need for strong ones. solutions to these challenges from all levels of government. ”
Ballad reached nearly 300 businesses, and of those, 75 completed the entire interview. “The engagement focused on key urban industries, oil and gas, the resource sector, and consumer-facing industries such as retail, commodities, and personal services. There are approximately 40/60 separated in various small businesses, those with less than five employees, and those on a larger scale, ”he explains.
Burger said many businesses have been forced to close because of provincial health guidelines and the fall in energy prices directly or indirectly affecting many. He said regional unemployment was significant and it started from a base higher than the province, about ten per cent. “Many small and medium-sized businesses indicate a real uncertainty in their ability to repay emergency loans which is something we have flagged as fairly critical.”
He said sales and revenue have plummeted in the town’s community since the pandemic began. “The direct impact is that following multiple rounds of public health restrictions, workers are laid off, while consumers are unable to access the services they want. This has indirectly resulted in widespread concern over state of the global economy and energy demand.The increase in high crude oil inventories and no reduction in production means declining energy prices. ”He noted that they are seeing early signs of recovery in the energy sector .
Burger said 71 percent of businesses have seen their sales drop. “Some saw higher losses than others. Almost everything was affected by only a small minority, only twelve percent of the businesses interviewed, who said they saw an increase in sales. That was really driven by the pandemic. The restrictions on overseas travel mean people are spending on recreational products such as ATVs and RVs.There has been an increase in residential investment in some areas, leading to a strong year for wood makers .We also have lower housing financing costs, ”Burger said. In Whitecourt’s case, he said that translated into more stable sales in the upper part of the residential sales market.
For businesses considered essential services, demand remained. “Pharmaceuticals, compliance and safety services, wellness products, many of those companies have had a good year, but it’s a small minority in the general business community. And even the smaller minority is were able to actively target new markets in some pivoting their business. ”Burger said many businesses have repurposed equipment for other uses or offered curbside pickup and delivery in response to revenue cuts. . Only 29 percent of companies described their sales as highly resilient to more public health restrictions even with those changes.
The shift to online retail has shown uncertainty, especially for small businesses. Barriers include shipping and delivery costs and the limited discounting capacity for smaller companies compared to large box stores. “As we start to see increasing demand, there’s a challenge to supply chain barriers more than anything, so it’s kind of a double hit,” Burger said. “We’re hearing significant shipping problems, and that’s compounded even more from when the Suez Canal was blocked, creating a backlog that we still see today.”
Burger gave an example. “One business I talked to, the pre-pandemic container shipping cost was $ 2,500 to carry a container full of product. The current pricing is $ 16,000. So, an exponential increase in shipping costs makes a lot of sense. products that can’t be sold. In that case, they just stop bringing in containers. ”
One thing that is important to keep the business going is public support. “We’re really pleased to see the town going forward with recommendations about micro-Grant funding and business visits. You’re doing everything you can in terms of supporting these struggling businesses,” Burger said. ” Once the dust has settled, we need to determine what it will look like in terms of debt repayment. A significant proportion of businesses indicated that their closures or reduction risks were elevated in the region by 40 percent. Their ability to repay the loans was affected. ”
He said that despite issues with funding supports, it is clear that money is an important lifeline for many businesses. “For some sectors, especially those who saw multiple closures during the pandemic, financial assistance ensured their safety.” Burger said building the region’s stability is important to move forward. He said more regional supply chains and strengthening the labor market with local skill development are the two ideas.
“I hear again this time and time again if, from smaller businesses or larger employers, there is more success in getting local people to stay in the area compared to people who come from outside, stay one up to two years and then moving on. To harness local talent through RAP programs, internships, co-ops and pairing with local high schools and secondary posts, all of that will be very important going forward. ”
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For viability, 35 percent of businesses view their risk of closing as moderate or high. “During our engagement in May and June, the number of businesses started to expand that and indicated that they couldn’t survive another lockdown,” Burger said. “We had a very difficult conversation, and my heart goes out to the business owners.”
Wrapping up his presentation, Burger said he felt Whitecourt could be a model for other resource -based municipalities seeking to make similar shifts with proactive approaches. He praised the steps taken to identify and address barriers to growth.