A new Bank of Canada study says half of the businesses in Toronto, Vancouver and Ottawa that closed due to 2021 lockdown stayed closed five months later, according to Blacklock’s Reporter .
“Data is suggestive of the existence of business hibernation during the pandemic,” said a Bank report called Business Closures And Re-Openings In Real Time Using Google Places .
“For a crisis propagating as fast as the COVID-19 pandemic, monitoring the evolution of businesses in a timely manner is critically important for policymakers.”
A total of 12,976 businesses in those three Canadian cities that were subject to lockdown orders in April and May 2021 were tracked.
“Half of businesses recorded as temporarily closed in May had reopened by the end of September — 40% were still hibernating, 10% were closed for good,” said the report. “Traditional bankruptcies or business registries data cannot capture COVID features well.”
The study based its findings through Google Places, Google’s listing for local business search results, for information on whether businesses were open or closed.
The researchers complained there wasn’t enough “real-time data on business health” that indicated to the Bank whether lockdowns were “turning non-productive firms into zombies.”
“Our estimates align well with the timing of COVID-19 restrictions and are validated by a survey of recently opened businesses,” said the study.