By Krista Ross, CEO, Fredericton Chamber of Commerce
As we approach the one-year mark of New Brunswick’s first mandatory order and COVID-19-related lockdowns, we’re all feeling the effects of the pandemic – a year of stress, restrictions and a lot of hard work to limit the spread has left us exhausted. The vaccine rollout, while clunky, is the closest thing we have to the light at the end of the tunnel – but there is not yet any corresponding beacon for many businesses in the hardest hit sectors. A year in, we have a better understanding of the breadth of the crisis, but the depth is still unknown and will remain so until we get can to something that looks closer to “normal”. Getting the population vaccinated is not an economic recovery plan, it’s a foundational pre-requisite to implementing a plan.
What is clear is that governments will continue to have a role to play in helping businesses navigate the crisis for the foreseeable future, and then working with industry to develop a recovery plan. This will not be an easy task as the effects of the pandemic are extremely uneven – some sectors are doing better than ever while others are hanging by a thread – the “K-shaped” recovery.
The financial damage and long-term consequences of the pandemic are still unfolding, and it is important for all of us to understand that the economic crisis will lag behind the public health crisis – the effects on business will be felt long after the vaccination process is completed. Many businesses are hurting in our community, but that may not be obvious because, of course, businesses are putting their best foot forward, trying to innovate and hustling to keep going and employing people. This may skew the public’s perception of the economic impact – often, we only know a business is in trouble when it closes.
Recently, I spoke to some in the restaurant, hotel and accommodations, arts and entertainment, and health and fitness sectors to get a snapshot of where they are at a year into the crisis.
Restaurants have dealt with shifting rules and regulations, a steep decline in capacity and trying to retain staff with a view to the future. MoCo downtown has seen a 48% decrease in revenue and Shawna Foster (co-owner) said “Despite the massive drop in sales, our payroll expenses have only decreased by 30%. Outlook for the next year is dismal with continued distancing in the restaurant, staggered reservation times, increased sanitization between guests, rising food costs and no tourism.” Jennie Wilson of the 11th Mile, with January revenue down 45% in 2021 vs. 2020 and a workforce reduced by 50%, said that “Although the Fredericton community is hugely supportive, it is impossible to replace the business lost to festivals, tourists and business travel over the past year. The only way we can get by is to avail ourselves of federal assistance, ensure our current staff make a living wage, and ‘tap dance’ as hard as we can to make up for shortfalls”.
The hotel and accommodation sector has been affected by closed borders, travel restrictions/recommendations, along with cancelled meetings and conferences. John Waite of the Fredericton Inn, with revenue down 75% and a workforce reduced by 70% said “’Hanging on’, ‘survival’, ‘suffocating’, ‘underwater’ are frequent adjectives when the hotel industry is talked about. 60% are on life support; 40% are behind on their mortgagees and 25% have not paid property taxes.” Sara Holyoke with the Delta by Marriott Fredericton said “I am very concerned about recovery timelines for tourism, travel, meeting and convention sector business. If we do not get vaccinations and bubbles opened, borders opened, planes in the air all with new protocols and checks and balances to ensure the safety of all, we could as an industry remain in bad shape for some time to come. I envision recovery being more realistically 2022-23.”
The arts and entertainment sector inherently involves gathering, Zach Atkinson of The Cap said that “Our entire year has been a yo-yo supporting and employing our staff. It’s sad to say but 2020 was a downward spiral of a year. This was meant to be the year of growth.” Germaine Pataki-Theriault of Gallery 78 told me “The message people are hearing loudly is “stay home”, but then in a much smaller voice we are hearing “buy local”. We very much miss our clients from away that used to regularly visit every summer. I worry about New Brunswick’s tourism industry. I mostly worry about the state of the economy.”
Health and fitness businesses have been dramatically affected and one of the few sectors that have been forced to shut down in the current NB Recovery Plan. Cara Hazelton of Precision Pilates, which is down 35% has retained all employees but their hours are reduced by 80%. Cara said “I had imagined that 2020 was going to be a big growth year for my company. It has turned into quite the opposite. I am grateful I have not lost the business, but I am tired. I have it so much better than other small businesses with even tighter restrictions. I feel for them.”
At least for the immediate future, governments supporting businesses through the pandemic is even more important than keeping budgets balanced – that’s still important, but it’s important so that we have the flexibility and the will to be responsive, to make smart investments where they are needed and to give a hand up to individuals and businesses that are critical to recovery and future prosperity. Supporting and investing in business, combined with thoughtful, forward-looking policy making will produce positive returns for government and the citizens of the province.
Krista Ross is CEO of the Fredericton Chamber of Commerce, a nationally accredited organization with more than 1,000 members, is an active business organization engaged in policy development and advocacy that affects the competitiveness of our members and the Canadian business environment. The Chamber’s vision is ‘Stronger Community Through Business Prosperity’