Impacts of the COVID-19 Lock Down

Impacts of the COVID-19 Lock Down

Many provinces are entering “Phase 3” of reopening their economies. We will explore the financial and emotional impacts of the lock down on you and your family.

Paraphrased from original in CAIRP

by Shelley Koehli, CIRP, LIT of D. Thode & Associates Inc., British Columbia

The COVID-19 Pandemic has forced many Canadians out of work. In addition, many businesses have had to close, and individuals have dipped into their savings. The enormous task of reopening the economy can be daunting to businesses and their employees, who will struggle with catching up on rent and bills, often with less income than before the pandemic, as they face strict rules around physical distancing and keeping their workplaces safe.

Like many Canadians, I moved my practice from a leased downtown office, to my home in mid-March due to the lock down, school closures, and lack of daycare. For my family, there have been pros and cons to being at home. The pros include not having to commute, having flexibility with working hours, and being able to manage home schooling. The cons include my home being taken over with paperwork, extra clutter, and keeping my son busy and occupied while I take phone calls and video conferences. The biggest stress has been trying to balance work and homeschooling. I chose to send my son back to school in June when schools in British Columbia reopened for a month. Now that school has ended for the summer, keeping my son occupied and safe, is top of mind while I also focus on working and earning an income.

Out of Debt, D. Thode and Associates Inc

The financial impacts that many Canadians are facing are far reaching.

Take the example of an employer in the service industry. Not being able to fill their space to capacity and fully staff their business impacts not only the employer’s bottom line, but also their employees. This also impacts the landlord; not only is it hard to collect rent from struggling business tenants, in many cases the rent formula may include a share of tenants’ revenues.

I spoke to people in my community, and here are a few situations faced by two families and one small business:

Family of 3

The husband was laid off just prior to the lockdown and the wife was laid off shortly after the lockdown. Both spouses applied for the CERB and each received one payment while waiting for the Employment Insurance (EI) payments to start. The family is currently saving some money by not paying for daycare or commuting costs. They have also cut back drastically on entertainment and eating out. Their EI payments mostly cover their monthly living expenses, but they do have some savings to cover the shortfall which they anticipate will last until September. The hope is that both spouses will find alternative employment before their savings account runs out.

Out of Debt, D. Thode and Associates Inc

Family of 4

When the lock down started, the husband and wife were laid off. Both applied for and received EI. The husband returned to work after five weeks at reduced hours. The husband’s employer took advantage of the small business grant paying 75% of the employees’ salaries. The wife works in a hair salon and only recently able to return to work for one day a week due to the salon complying with health and safety guidelines and reduced hours. The wife is now collecting CERB and working one day a week which increased her earnings. This has helped to balance out the loss of her husband’s income. The family has little savings so they took advantage of their bank’s offer to defer mortgage payments, and took a small, interest-free loan from family to cover off their one debt payment. To further reduce expenses, they removed insurance on one of their vehicles. Now they are both back to work and re insured the vehicle but were able to save hundreds of dollars on gas/insurance costs in the first four months. Currently, the family is focusing on saving in the event of a second wave of the virus.

Small business – Dog Daycare

Once the lock down came, this business owner saw an immediate reduction in business as people no longer needed her services by staying home with their pets. Before the lock down, she was operating two locations but had to close one and reduce the number of services offered over the initial four months. She said she can bring some of the services back, but not all due to the potential health risks to herself and her staff.

Out of Debt, D. Thode and Associates Inc

The positives for her are that her business was mostly COVID friendly as all payments and communications were handled online, and there was limited in-person interaction between pet owners and staff. She qualified for the wage subsidy and the Canadian Emergency Business Account which has helped in keeping the business afloat over the past four months. The biggest concern now is the loan funds are dwindling, and she is not yet operating at 100%.

The challenges she has faced include one of the landlords initially refusing to apply for the rental subsidy for the first four months but has since applied for the subsidy after making the tenant sign a lengthy contract.

The business owner is currently operating the second location at 40% capacity and able to bring back about 40% of her staff. Going forward, she is feeling anxious about the future, but is hopeful that she will be able to get back to operating at 100%.


The challenges facing individuals and businesses during this time are incredibly stressful, especially given the likelihood of a second wave and further lockdowns.

Contact Shelley Koehli, a CIRP, Licensed Insolvency Trustee (LIT) to find out if filing a bankruptcy or a proposal may help you navigate the stressful financial landscape that you are currently facing. Stay safe!

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