More than half (51.3 per cent) of Canadian business owners surveyed did not know how long they could continue to operate at their current level of revenue and expenditures before considering closure or bankruptcy.
That figure appears in a survey by Statistics Canada asking businesses about expectations moving forward and the ongoing impact of the pandemic.
The picture appears especially grim for accommodation and food services, where businesses are bracing for a tough year ahead.
The vast majority of businesses in accommodation and food services (86.4) as well as arts, entertainment and recreation (78.3 per cent) reported declining revenues in 2020 compared to the previous year and expectations for the new year are low.
Almost three-fifths (56.4 per cent) of businesses in accommodation and food services expected profitability would decrease over the next three months, a figure worse than the overall picture, which shows more than two-fifths (41.8 per cent) of all businesses expect decreasing profitability.
Nearly one-quarter of businesses in accommodation and food services (24.9 per cent) and arts, entertainment and recreation (23.3 per cent) said they could continue to operate at current revenue and expenditure levels for less than 12 months before having to consider closure or bankruptcy. By contrast, the overall figure for all businesses is 10.3 per cent.
While many retailers have shifted operations online to make up for lost in-person sales, this option is simply not available for hotels and many other types of businesses in those two sectors as they rely on in-person presence.
Businesses in those sectors pay special attention to government rules with many 43.6 per cent in arts, entertainment and recreation and 38.1 per cent in accommodation and food services considering government regulations an obstacle for the next three months.
On a more existential level, over two-fifths (42.5 per cent) of businesses in accommodation and food services expect that maintaining sufficient cash flow or managing debt would be an obstacle. Over half of businesses in this sector stated they do not have the ability to take on more debt (52.7 per cent).
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