The Whitehorse Chamber of Commerce and the Yukon Bureau of Statistics have released reports on the effects of the COVID-19 pandemic on the economy.
The chamber released the results of its business impact survey on June 8, which showed that 80 per cent of the participating businesses reported being negatively affected by the pandemic while 20 per cent reported no impacts.
Of the 80 per cent that were impacted, half reported to have lost 50 per cent or more revenue.
Five per cent of surveyed businesses are thinking about closing by the end of June and 33 per cent are unsure of the future.
Inga Petri is the researcher who carried out the study and sits on the chamber board. She spoke with the News on June 8 about the results.
There were 211 businesses that opted in to participate.
“We do represent the survey results very much in the sense of, these are results that are valid and reliable for the businesses that responded,” Petri said.
She said there are a number of industries, like accommodation services, retail, trade and restaurants that are suffering.
She explained that a business’ profit margin can be a difference of nine to 15 per cent after expenses.
“Nine per cent represents five weeks out of the year that those businesses have to generate their profitability,” Petri said.
She feels the shutdown had a much greater impact than anticipated and hopes officials will realize that Yukon businesses operate in more varied ways than elsewhere as approximately 61 per cent of businesses are home-based.
“Home-based businesses are treated a little bit differently with (less) of the support programs available than if you were renting your facility,” Petri said.
A sole proprietor may not be on his or her own business payroll, which will make it difficult to get wage subsidies.
She adds that up to 50 per cent of businesses are seasonal, like tourism and mining. These businesses may have been closed during the early days of the pandemic and are still heavily impacted.
“So the initial program designs were not geared towards these kinds of sectors either,” Petri said.
She would like to see business support programs reflect these realities.
The survey has been shared with both the Yukon government as well as the Business Advisory Council.
The chamber’s information lines up with a report prepared for the Yukon Bureau of Statistics based on Statistics Canada’s Economic Analysis Division. This report looked at the decline of tourism.
Weimin Wang, the principal researcher, found that there was a 25 per cent drop in international tourists coming to the territory during the first three months of the year compared to the same time in 2019.
Wang said in the report that tourism is a major part of the Yukon economy. In 2014, tourism made up 5.31 per cent of the territory’s Gross Domestic Product (GDP) and 18.36 per cent of the jobs. This is much larger than the country as a whole, with the industry comprising 2.33 per cent of the GDP and 4.86 per cent of jobs nationally.
Tourism kept growing between 2014 and 2018 at an annual rate of 2.9 per cent.
Wang was unsure what tourism will look like for the rest of the year. What it will look like will depend on when and how travel restrictions are lifted and borders reopened.
Wang added tourism will take longer to recover due to it being “more a luxury consumption than a basic need.”
The report looked at three scenarios on recovery. The first one went through under the assumption that restrictions were lifted in July. This predicted a 100 per cent drop in tourism activities in the second quarter, a 60 per cent drop on the third and a 30 per cent drop in the fourth. This would be a 67.4 per cent annual decrease.
The second scenario pushed the date back to September. This too saw a 100 per cent decrease in the second quarter, 90 per cent decrease in the third and a 50 per cent decrease in the fourth. The growth rate would be -86 per cent.
The last scenario pushed the date back to early December. The second and third quarters are predicted to see a 100 per cent drop and a 90 per cent drop in the fourth. The annual growth rate would be -96 per cent.
Contact Gord Fortin at firstname.lastname@example.org