Ottawa business leaders who were previously high on the city’s economic potential had their expectations devastated by the novel coronavirus pandemic, according to the latest annual survey tracking business confidence in the nation’s capital.
The Welch LLP Ottawa Business Growth Survey (OBGS) is a collaboration between the accounting firm and polling firm Abacus Research, as well as the Ottawa Board of Trade and the Ottawa Business Journal.
The OBGS surveys hundreds of senior executives and business owners on a series of questions related to how well they expect their company or store to fare in the year ahead.
The result is a single score out of a possible 200: ratings above 100 indicate relatively high overall confidence in the local economy, while scores below that threshold indicate concern.
While previous years have seen business confidence scores float around the 120-125 range, this year’s survey, which saw more than 600 Ottawa executives surveyed in June, reported a score of just 78.
Only a third of those surveyed expect their annual revenues to grow this year, a drop of more than 20 percentage points from last year’s survey.
While just under half of last year’s respondents expected to hire a new employee in the 12 months ahead, only one in four now say they plan to make a hire in the coming year. Twenty-one per cent say they plan to reduce their company’s headcount.
Nearly half of all respondents say their revenues declined in the last fiscal year.
Sueling Ching, CEO of the Ottawa Board of Trade, says restoring business confidence will be integral to guiding the city’s economy out of the pandemic.
“Business confidence is going to be key to our recovery. The private sector will be what leads us out of our current situation,” she tells Global News.
Ching says Ottawa’s level of economic confidence will depend largely on how the government responds to the needs of businesses in the months ahead.
Trudeau says government needs new team focused on rebuilding Canada’s economy
More than a third of OBGS respondents say government aid was integral to keeping their businesses operational during the pandemic, with 30 per cent indicating relief funding helped them to avoid layoffs.
Roughly 16 per cent of those surveyed say the scope of government response was too limited to affect their business.
Ching says that while government intervention was critical to inject much-needed liquidity into businesses, the aftermath has seen all levels of government take on unsustainable deficits.
The next wave of support, she says, will need to be much more targeted to the most vulnerable sectors to be sustainable.
The OBGS also breaks down changes in business confidence by sector. Ottawa’s hospitality industry took the hardest blow to its near-term outlook, with a 56-point year-to-year drop in its confidence score.
“There’s going to be a long recovery for some sectors and we need to continue to support them,” Ching says.
The local board of trade is also pushing the provincial government to reduce barriers to doing business — namely, reducing restrictions on interprovincial trade.
Ching says businesses should be encouraged to trade with provincial partners if Canada is planning a nation-wide relief effort.
“Right now, in some cases, it’s easier to access an international market than one in our own country,” she says.
Ching also encourages a close-to-home attitude for Ottawa residents who might be concerned about their local businesses. She highlights the upcoming Canada United weekend campaign, which offers shoppers a chance to win prizes for patronizing participating local businesses.
“Local, small, medium enterprises, they provide jobs, they provide a tax base, they provide unique and essential goods and services.”
Mayor Jim Watson, who scored a 48-per cent approval rating from business leaders in this year’s OBGS, noted during Wednesday’s city council meeting that staff are also preparing strategies to help local businesses navigate the coming winter.
Ching says the board of trade is also working with the mayor’s team to prepare its members for the colder weather, when mitigation strategies such as expanded patio rules will no longer be relevant to many businesses struggling through the pandemic.
Business owners will have the chance to provide feedback to the mayor, the board of trade and Ottawa’s medical officer of health Dr. Vera Etches at a virtual town hall event next week.
If there’s a silver lining to the pandemic’s effects on local business, it might be in the accelerated adoption of technology such as e-commerce and remote working applications.
Half of all OBGS respondents said they were updating internal communications tools amid the pandemic and 28 per cent said they were shifting to focus on online sales. Many also said they were putting a new focus on employee mental health and encouraging flexible work schedules.
Ching says the shifts in culture and technology were already bound to happen, the pandemic just sped up the adoption.
While government support is still needed in the months ahead, companies themselves will have to embrace the new way of doing businesses if they hope to regain the confidence lost in the pandemic, she says.
“It’s not going to be going back to business as usual. We’re really looking at an economic evolution. And businesses need to start thinking in the way.”
Note: Global News reporter Craig Lord previously worked as an editor with the Ottawa Business Journal.
This Edmonton small business owner stayed optimistic through the pandemic. Here’s how
© 2020 Global News, a division of Corus Entertainment Inc.