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A pedestrian walks past closed storefronts in Toronto on April 16, 2020.

Nathan Denette/The Canadian Press

More than half of Canadian companies saw their revenue drop by at least 20 per cent during the initial wave of the COVID-19 pandemic, pointing to significant financial troubles for businesses that went into the crisis with limited cash on hand.

Further, nearly one-third of businesses said sales dropped at least 40 per cent in the first quarter when compared with a year earlier, according to survey results published Wednesday by Statistics Canada and the Canadian Chamber of Commerce.

Going into the pandemic, about half of companies said they couldn’t operate longer than 90 days without a source of revenue, suggesting that cash buffers are waning, if not fully depleted, in sectors that have been shut down by government orders.

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For that reason, the next two to six weeks will be crucial to protecting the long-term viability of many businesses, said Trevin Stratton, chief economist at the Canadian Chamber of Commerce.

The federal government has launched several programs to extend billions of dollars of support for businesses hit by lockdown measures that have clobbered the economy.

Coronavirus guide: Updates and essential resources about the COVID-19 pandemic

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Small businesses “are feeling more of a cash crunch, and they don’t have as much of a cash buffer,” Mr. Stratton said. “Making sure that we get the money out fast, but also making sure that we’re able to cover businesses that need support, is going to be very important.”

Earlier this month, the federal government opened a program that delivers up to $40,000 in interest-free loans to qualifying businesses, of which 25 per cent (up to $10,000) is potentially forgivable. On Monday, Ottawa started taking applications for its wage-subsidy program, which will cover 75 per cent of wages for qualifying businesses, up to a maximum benefit of $847 a week per employee. Tens of thousands of businesses have already applied.

“Smaller firms are more vulnerable in this environment and this survey reinforces the importance of getting wage subsidies out the door as quickly as possible,” Toronto-Dominion Bank strategist Robert Both said in a client note.

However, Mr. Both added, “this may be too late for some.”

In Wednesday’s survey, about 41 per cent of companies said they had laid off staff. Of that group, nearly half laid off at least 80 per cent of their work force.

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More than 12,600 businesses took part in the online survey between April 3 and April 24. Statscan said that because the data were crowd-sourced, the results could not be applied to the overall economy.

While most companies said they were negatively affected by physical-distancing measures, nearly two-thirds (62.3 per cent) said they could reopen or return to normal operations less than one month after those measures are removed.

“I didn’t expect that number to be that high,” Mr. Stratton said.

Returning to normal could be a challenge, however. While many provinces are starting to gradually open parts of their economy, or laying out their plans for doing so, strict physical-distancing guidelines remain in place, which could dampen customer traffic.

In turn, this could weigh on a recovery in demand, Mr. Stratton said. More than 80 per cent of companies said the pandemic had significantly affected demand for their goods and services, according to survey results. By contrast, fewer companies reported issues with their supply chains.

“A lot of our ability to reopen or recover quickly will depend on whether we can get back to a normal level of demand in the economy,” Mr. Stratton said. “That will certainly depend on the phased-in approach [to easing restrictions] and how much consumers even trust being in public places when we reopen.”

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