One in four NWT businesses experienced revenue declines of more than 30 per cent in 2020, compared to one in three businesses across Canada.
The declines came amid the economic disruptions of the Covid-19 pandemic, which also saw the Canadian economy contract by 18.2 per cent in March and April 2020 combined, the steepest fall on record, according to Statistics Canada's quarterly Business Conditions Survey, circulated last week by the NWT Bureau of Statistics.
Some NWT businesses saw their revenues increase during the pandemic, such as in the retail trade sector.
Industries that experienced revenue losses of 50 per cent or higher included transportation and warehousing; accommodation and food services; wholesale trade; and administrative support and waste management.
About one in four NWT businesses – or 25.5 per cent – closed temporarily and then reopened later in 2020 amid the Covid-19 pandemic.
The territory is higher than the Canadian average of 18.5 per cent of businesses closing temporarily. Manitoba and Yukon had the lowest levels of such closures, at 10.5 per cent and 12.6 per cent, respectively.
Businesses 'quick to implement' Covid-19 measures
Only two per cent of NWT businesses have remained closed and 52.4 per cent were “fully operational” throughout the year.
The ability of most enterprises to keep going despite the pandemic challenges reflects the adaptability of the Yellowknife business community, said Tim Syer, president of the Yellowknife Chamber of Commerce.
“Businesses were quick to implement and comply with all public health orders, and as a community we’ve come together to limit the spread of Covid-19 and generally avoid the second wave and further lockdowns,” he said.
At the time of the Statistics Canada survey, seven in 10 businesses reported restricting or planning to restrict the number of people allowed into their spaces, 15 per cent reported reducing hours of operation, and 12 per cent had or planned to have an online sales platform.
Most businesses provided sanitizer, face masks, gloves or other personal protective equipment for their employees or provided hand sanitizer to customers. One in three businesses added Plexiglass or sneeze guards.
Over the next three months, half of all NWT businesses expect their profitability to remain the same but 27 per cent expected it to decrease.
Expected profit declines were similar across business sizes, except for micro-businesses of one to four employees. Forty-two per cent of those businesses predict lower profits in the next three months, and they expressed more pessimism on issues such as operating income and expenses, sales and demand for their products.
Still, they grow
Even though Barren Ground Coffee would have been considered a micro-business in 2020 because it employed about four staff, owner Eric Binion expects his revenues to remain unchanged over the next three months if he doesn't have to shut down the front of his cafe.
“Our revenue continues to grow, but it has every year since we started. We expect 2021 to be no different in that respect as we branch out to filling larger wholesale and online orders in the NWT, Nunavut and northern Alberta,” he said.
The 52 Street bean roaster and cafe currently employs eight staff, all of whom are part time. Most of its business is in roasted coffee bean sales.
Amanda Peterson anticipates revenues of her Peterson's Point Lake Lodge to remain the same over the next three months – on the same flat line they've followed since the arrival of Covid-19.
“There's consistently no economic activity going on,” Peterson said. “But that being said, we've diversified and we're providing shuttling for the Covid-19 vaccine teams. That has helped us keep the wheels in motion (and) it's nice to be involved in that. It provides a bit of revenue coming in.”
Businesses and the border
Peterson doesn't expect NWT border restrictions to be eased in the near future and can't count on a return of international and non-NWT guests to her lodge on Point Lake, about 320 km north of Yellowknife
But she hopes the lodge's new staycation packages will draw more NWT guests.
“We'd love to rely on locals. We're really working on recruiting employees. We've called the GNWT to see if there's funding for training for guides for hiking and fishing,” she said.
Travel restrictions were cited by almost half of NWT businesses as the main hurdle they expect to face in the next three months.
The second most-cited issue is recruiting or retaining skilled employees.
One in four businesses did not expect to encounter any obstacles in the next three months.
The findings of the survey generally reflect the reality of economic recovery for members of the Yellowknife Chamber of Commerce, said Syer.
However, he noted that recovery has been unequal across sectors, such as in the tourism and hospitality, where businesses are struggling.
“They need to cover their operational costs while generating substantially less revenue because of restrictions placed on their business,” he said.
The next report from the Canadian Survey of Business Conditions is expected in June 2021.
