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Information and perspective for businesses responding to the COVID-19 crisis



Information and perspective for businesses responding to the COVID-19 crisis

We’ve assembled the latest information on support and stimulus for Canadian businesses and provide suggestions on how a pause and pivot approach can help you plan where to go from here.


Jeffrey Boutilier

As of this writing, Canada is the latest country to be gripped by the ongoing COVID-19 pandemic.  There are 665 (Johns Hopkins University) confirmed cases of the disease within our borders: a figure expected to climb dramatically in the days ahead.  Canadians abroad are being called home, global equity markets are in freefall, and borders are closing.  It is a frightening and turbulent time ruled by a growing number of unknowns with no clear endpoint in sight.


98.2% of all businesses in Canada have fewer than 100 employees.  Add those with fewer than 500, and that figure rises to 99.8%.  For every employee currently worried about the impact of this public health emergency on their livelihood and ability to weather this crisis, there is a business owner worried about how to keep their team employed, how to keep wages intact, and how to accommodate a whole demographic of workers now without childcare, access to schools, or caring for loved ones at risk or affected.  Make no mistake, however, for a great many of these businesses there is no strategic reserve of funds to bridge a prolonged closure or a major downturn in sales activity.


There is no greater priority than stopping the spread of COVID-19.  We join in calling on all businesses to do everything they can to observe the guidance of healthcare professionals and government leaders, and to ensure they do their utmost to protect their teams, their customers, families, and communities.  The effort we make today, no matter how painful to our businesses, will be repaid by a faster return to our normal way of life. 


Together, we face a challenge unprecedented in this generation.  The economy must remain resilient if we are to emerge from this crisis a strong and united country.  As the foundation of our economy, small businesses will be essential to the recovery.


The road ahead is long, and businesses must act quickly and decisively to secure their future.  We advise small and medium-size enterprise responding to the COVID-19 emergency to act in two stages:  Pause and Pivot.



The pressure to adjust business strategy in the wake of forced closures, dramatic changes in demand, and an uncertain future is driving rushed and emotional decision-making.  Governments are moving quickly to inject liquidity into markets, ensure banks are equipped to extend additional credit, and to defer taxes.  Major lenders are moving to offer mortgage deferrals.  We strongly recommend that affected business pause for the first week of their response and focus their efforts on ensuring business continuity by ensuring they are positioned to continue basic operations remotely (if possible), communicate with their teams, secure critical assets and infrastructure, and position themselves to access emergency relief.


Consider taking the following steps:


  • Stay informed


Information concerning the virus is emerging daily and recommendations on how to best contain its spread is evolving.  Take time daily to review new information being issued by governments and health authorities and use the information to inform your response.  Avoid acting on information from unreliable sources and social media without first verifying its accuracy.  The right thing to do today might be the wrong thing to do tomorrow.  Stay current.


  • Act immediately to access stimulus programs and other supports for affected businesses


The Government of Canada has announced sweeping measures to support the economy and small businesses under Canada’s COVID-19 Economic Response Plan, with future announcements expected as the situation continues to progress. We note that many of these programs are newly announced and specific details still emerging.


  • To date, the government has announced the following:


    • $10+ billion of additional support has been made available through the Business Credit Availability Program. This support will come primarily in the form of credit solutions for small and medium sized businesses. The Business Development Bank of Canada (BDC) is administering financial support under the program, which includes payment and interest relief for existing borrowers, and lower rates for new loans. Additional information is available here and applications for working capital loans up to $100,000 can be made online here


    • A subsidy has been created to help employers keep their workers during the crisis. Eligible small businesses (criteria is emerging, but is understood to meant those qualified for the small business deduction) can receive a temporary wage subsidy equal to 10% of the remuneration paid during the period for up to three months. The maximum subsidy will be $1,375 per employee and $25,000 per business. There does not appear to be any repayment provision for the subsidy in future periods.


    • This benefit is expected to be available soon and is expected to be offered as a reduction in the amount of federal taxes the business is required to withhold at payroll time. Small businesses using major payroll providers (Payworks, Ceridian, etc.) are encouraged to contact their provider for information on how to access the credit when it becomes available. More information is available here.


    • Tax filing flexibility

      has been announced that will allow all businesses to defer the payment of any income tax amount owing from March 18th until after August 31st, 2020 without penalty or interest. This applies to balances owing on or after March 18th, as well as any instalment payments that become due.


    • The government has also announced that the CRA will not be initiating any post assessment GST/HST or Income Tax audits for the four weeks following March 18th. The government has also announced far reaching efforts to ensure capital market liquidity, and the Bank of Canada has made (and is expected to make further) rate cuts. We note that, to date, the Bank of Canada has not signaled that they will pursue quantitative easing at this time.


    • A number of supports for individuals have also been announced which may be available to you or your employees. Ensure they have up-to-date information about what is available and how they can access it. Encourage them to act quickly as despite the government’s quick response we expect waits may occur before benefits begin flowing. Information can be accessed here.


  • Examine cashflow projections based on current and emergency scenarios


In our experience many small and medium size business struggle to manage their cashflow, and even short-term shocks to cash inflows can have devastating consequences. Now is the time to prepare a detailed cashflow projection for your business outlining expected inflows and outflows based on a realistic estimate of our new shared reality. Many businesses are asking us how long they should expect current measures to last. We expect that, at a minimum, the current circumstances should be expected to remain in place for 8-12 weeks.


Prepare two versions of your projection: one that reflects your current staffing levels and outflows, adjusted for your demand assumptions, and one that reflects the minimum outflows you would have to maintain to stay in business. It is critical as you prepare to talk to your lenders and aim to secure federal relief that you understand your new cash requirements for the next 3-6 months. They are likely very different from the cash requirements you are accustomed to.


  • Assess insurance policies and contracts


In addition to reviewing your cashflow, examine your insurance policies to assess what business continuity or business disruption provisions may be available to you. Note that some policies may exclude pandemics and could limit your coverage under the current scenario.


Similarly, assess any contracts with clients or vendors to assess your commitments under this new reality and understand your strategic options. We expect that the COVID-19 crisis may result in challenges to contracts under ‘Force Majeure’ or ‘Act of God’ provisions. Consult with your legal counsel to aid you in interpreting these provisions.


  • Reach out to clients, but consider the urgency of your message


It’s important to have a clear policy and response to COVID-19, but it’s also important to consider your audience and the urgency of your message. Our inboxes are full of COVID-19 messages from companies we deal with routinely right down to that place we bought funny socks from for the Christmas gift exchange. Social media is awash right now with companies trying to get their message out about COVID-19. We salute those pivoting to offer free access to their services during this difficult time to help the community get through, and those with offerings that are relevant in the current circumstances. For the others, consider if your message can wait, or if it can be delivered in a more precise and targeted way.


People need to receive important information right now more than ever. Avoid adding to the noise unless you need to.


  • Establish milestones for escalating your response


A thoughtful strategic response to this crisis means having clear decision points for how your response will escalate as circumstances evolve. Simply put: if you have three months of cashflow, today is the day to begin planning how you will furlough employees or eliminate expenditures to stretch those three months to four if you must. Identify the circumstances that would lead you to adjust your current approach now so that you can act confidently and decisively when and if they come to pass.



If the pause stage of formulating your response is akin to battening down the hatches in the face of a brewing storm, the pivot stage is grabbing the helm and fighting out the wind and the waves.


While it is impossible to anticipate how long the COVID-19 crisis will require us to observe current measures to stem the spread (or how those measures might tighten), we can look to other countries for a sense of how long we might be in for.  We are increasingly of the view that businesses should be preparing, at a minimum, for 8-12 weeks of measures comparable in impact to those we are experiencing now, and more realistically 6-12 months before life begins to return to normal patterns.


We also expect that the longer the crisis persists, the greater the impact it may have on reshaping customer behaviours and lifestyle patterns in ways that will have profound and lasting impacts on businesses.  It may be sometime before consumers become comfortable booking a trip or making a big purchase and, when they do, the differentiators they value when making their decision might be quite different than they would have been pre-crisis.  We expect few industries will be spared from these changes.


Businesses that survive – and thrive – through this period of challenge will be those that navigate a new and evolving consumer landscape and adjust their business model to deliver value to their customers in new ways.

The world we woke up to today is very different from the world of even two weeks ago, and we expect things will continue to change rapidly in the near-term.  It is important, now more than ever, that Canadian business leaders show their incredible tenacity, creativity, and optimism to overcome the challenges of COVID-19.  It is also important that we are realistic about the challenges to come. 


There is cause for hope.  China reported their first case of the virus to the World Health Organization on December 31st, 2019.  Today, March 18th, 2020 they announced their first day without any new cases.  Our collective priority must be doing everything we can to prevent the spread that eventually gripped their nation in these early days of the outbreak.

Jeffrey Boutilier

Jeffrey Boutilier

President & Chief Strategist

Ascent was founded on Jeff’s desire to challenge people to dig deeper into their environment and themselves to reveal the insights that light the path to market success.  Driven by a passion for adventure, he prefers to seek out inspiration and ideas in the places others are afraid to look.

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