The Road to Recovery Webinar Series - Where is the Economy Heading in 2022?
The third in a series of six webinars led by the Niagara Chamber Partnership’s Niagara’s Road to Recovery, host John Armstrong spoke with Dr. Stephen Tapp of the Canadian Chambers of Commerce, David Csordas of the Business Development Bank of Canada (BDC) and Niagara’s Durward Jones Barkwell Co LLP’s Patricia Suess about where the economy is heading as we near 2022.
Dr. Tapp opened by sharing some context around how drastically the pandemic affected the Canadian economy over the last 19 months. He explained that 70% of Canadian businesses were financially impacted by the Covid-19 Pandemic and of those, 1/4 experienced catastrophic losses of 50% or more.
Stephen added that, ‘while we are seeing consumer demand increase and businesses reopening, our road to getting back to pre-pandemic numbers is still a ways off. With ongoing labour shortages, continued supply chain challenges and rising costs overall, Canadian businesses still have an uphill battle ahead of them.’
Of course being in the Niagara region, we understand that a majority of those businesses, and the resulting job losses, stem from the service sectors such as tourism, chiropractic and hair salons. Patricia Suess added that not-for-profits and restaurants saw a huge uptick in support throughout the last year and a half, but she’s seeing more and more of these entities suffering more now due to consumer pandemic fatigue and tourism is still 50% lower than it was back in 2019.
Beyond that, with office workers working from home throughout, many business owners are now recognizing that the cost to have office space isn’t as appealing as it previously was. Working from home and hybrid ‘return to work’ models are on the rise and are resulting in a massive influx of commercial real estate vacancies.
Additionally, with so many staying home to work, larger metropolises are suffering beyond office vacancies. Services like transit as well as local eateries, retailers and dry cleaners that relied on a busy downtown core, just don’t have the traffic they’ll need to sustain themselves.
So what’s going to turn this around for us? Patricia noted that while it’s largely unknown, government assistance in the form of various wage/rent subsidies and business support are coming to an end. Once they have ended, we’ll have a clearer picture of what we are up against.
With 1.4 million unemployed Canadians that are actively looking for work, predominantly within the digital space, IT, truck drivers, construction workers, food industry workers and the trades, simply increasing salaries isn’t going to cut it for Employers looking to hire. In essence, there just aren't enough people to fill the voids. With that, the Government will need to look at increasing immigration and temporary migrant workers.
Beyond that, Employers will need to rejig hiring parameters such as requiring a degree and those using automation for hiring also may want to re-look at this approach - with many excellent candidates being eliminated for a lack of use of ‘keywords’. Businesses with office space will have to think further on what model is going to work best for their staff as many are sick of being at home but won’t return without the option for a better work/life balance as well as heightened support for mental health.
David shared that while we are seeing a lift in Canadian exports, with ¾ of small and medium sized businesses returning to profitable levels, uncertainty will be the new norm and business advisory services such as his, will likely see more inclusion in corporate business planning. This can help to mitigate risk, develop contingency plans and reduce dependency on the supply chain.
As the session went on, discussions turned to climate change and the responsibilities of businesses to contribute to such change. And while most Canadians and businesses were in crisis mode throughout the pandemic, the fourth wave has allowed people to rethink everything from work-life balance to career paths, shopping and travel habits to where one lives, as well as the business with like-minded values that they will support moving forward. The fundamental assumptions of most are currently being reevaluated and both consumers and businesses alike are shifting priorities to look harder at how they can adapt and improve overall.
The webinar came to a close with the following advice as to what the Government can to to boost the Canadian economy: