By Mary Giles
Small businesses are the heart of our communities. While big box stores have been allowed to remain open during lockdowns and stay-at-home orders, many smaller establishments have not. Many employees have been laid off or businesses have been forced to close permanently.
“While the pandemic has impacted many areas of society, there has been unparalleled economic consequences on the Canadian economy,” says Louis-Philippe Beland, a professor in the Department of Economics and FPA Research Excellence Chair.
Beland received a Carleton University COVID-19 Rapid Research Response Grant for the project “The Short-Term Economic Consequences of COVID-19: Exposure to Disease, Remote Work, and Government Response.”
The grant led to several projects that look at the impact of the pandemic on labour market outcomes in Canada and the United States to determine which workers, industries and occupations are most affected by COVID-19. In particular, Beland investigated the impact of the pandemic on self-employed workers in Canada (considered small business owners).
“The viability of small business is an important concern for policy-makers because some small businesses may never recover from COVID-19,” says Beland. “Small business owners play a pivotal role in the Canadian economy and understanding how the pandemic is affecting them is crucial.”
Small businesses who have rent or mortgages and property tax to pay and who rely on foot traffic have been deeply impacted during pandemic closures, despite numerous federal, provincial and independent financial programs and a move to online stores and curbside pickup.
While small businesses with physical storefronts have been affected, Beland says small business owners who were already working remotely have experienced less change.
In a recent article (under review), “The effect of COVID-19 on Canadian small businesses’ owners and their employees,” Beland and coauthors look at the pandemic’s impact on small businesses between February and December 2020.
“Our research uses the Canadian Labour Force Survey (LFS) to look at how small business owners and their employees are affected by the pandemic health policies,” says Beland.
“There was a substantial decrease in ownership, working hours and number of employees,” he says. “This had a more significant impact on immigrants and those with a lower education level. Although the numbers increased in summer 2020 when provinces reopened their economies, they often did not bounce back to pre-pandemic levels.
“Essential self-employed workers have been less impacted financially by the pandemic, although safety concerns have dramatically increased,” says Beland. “Self-employed workers who are able to work remotely have also been less affected financially.”
While the short-term effects of COVID-19 were substantial, the long-term effects are unknown.
“The pandemic has created some winners and some losers among businesses,” says Beland. “Restaurants and businesses closer to where consumers live might see a long-term gain in sales if remote work remains prevalent after the pandemic.
“Future research is needed to understand the long-term effects of COVID-19 on business survival and job creation, as well as the long-term effect of government policies on small businesses.”
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