The major impact of small businesses in Canada: Small Business, Benefits and COVID19

By Lindsay Byrka | BA, BEd, CFP
Vice President, Immix Group: An Employee Benefits Company


The major impact of small businesses in Canada: Small Business, Benefits and COVID19

At Immix, we have paid special attention to the especially precarious financial situation facing small businesses over the past 3 months. As employee benefits brokers, we have been helping our clients navigate their benefits and HR policies, with so many layoffs and work stoppages occurring. We have helped our clients to promote mental health and employee assistance programs, and of course, we have ensured all cost containment measures are taken.

But what else can we do? As our society gradually reopens in the wake of the COVID-19 pandemic, it is more important than ever to support local small businesses.


The impact of the lockdown on small businesses has been enormous

Even at the best of times, a small dip in revenue can mean the inability to pay bills or wages, especially for service businesses, with their extremely thin margins. The economic situation is obviously creating much worse than a small dip, with some industries completely closed for months on end. These small businesses may not survive, even as they are now granted permission to reopen.

Government programs have helped, but they do not replace the economic activity generated by an operating business. And unfortunately, many have been left out of these programs due to the qualifiers, or quite simply, it’s not even close to enough money to save their businesses.


Small and medium sized businesses in Canada (known as SMEs) are the backbone of the Canadian economy. Did you know:

  •  Of the approximately 1.2M employer businesses in Canada, about 98% are small businesses, under 2% are medium sized. This leave just a tiny fraction that are large employers.

  •  A small business is defined as having 1 to 99 paid employees

  •  A medium business has 100-499 paid employees.

  •  The majority (~54% of the total of 1.2M businesses) are micro-enterprises with just 1-4 employees.

  •  A total of 3 out of 4 Canadian businesses have 1-9 employees

  •  Small businesses employ 8.4M people, and medium sized businesses employ 2.4M people

  •  About 80% are in the services-producing sector.

  •  80% of people are employed in the private sector, with approximately 90% of those working for SMEs.

  •  Here in BC, this number is higher than the Canadian average, with over 93% of those employed int eh private sector working for SMEs.

  •  The contribution by SMEs to the GDP is around 50%.*


What does this tell us? SMEs play a crucial role in our economy!

The needs of small businesses are unique. As a small business ourselves, working primarily with other small businesses, we’re very familiar with not only the raw data above, we are familiar with the concerns and struggles of these businesses.

In our role as benefits consultants, we get to know our clients from both a financial perspective (the good and the bad they are experiencing), as well as from the human resource side (the struggles and victories associated with the ever-important human capital).


Our goal is to provide SMEs with innovative solutions

An area of challenge for many small businesses is employee benefit programs. As the numbers above show, most businesses are not giant corporations with specialized in-house experts. To bridge the gap, small businesses need to choose the right benefits partners, someone that will get to know the business and work out a custom solution that meets every need- financial and otherwise.  


Small Business and COVID19


Benefits that beat the competition

Like any businesses, the many small businesses with whom we work need to be competitive with other organizations when it comes to their health and wellness offerings. In fact, this is the number one concern that is raised when we are first meeting with a new client. They need to be able to attract the right people, and offer comprehensive benefits.

Often businesses think a great benefits plan is something they cannot afford if it is to be meaningful. Employers and employees alike often share the misconception that the benefits programs offered through the public sector or through massive corporations are superior and unattainable.

This is simply not true; affordable and effective solutions exist. We have been able to achieve this by the creation of unique, broker-manage pools (link to Immix pool blog).  It has been our experience that if there is a commitment to health and wellness, we are able to implement programs for these organizations that check every box.


Benefits and COVID19- what’s happening?

As we have navigated this pandemic and the associated shutdown of so many of our client’s businesses, we have seen the commitment to their employees reflected every step of the way. We’ve seen careful consideration of layoffs, extension of benefits during layoff, and a concern with mental and physical wellbeing and continued access to resources. We have helped our clients navigate their options and implement solutions.

Our insurance carrier partners have also stepped up, and premium relief measures were quickly introduced. Our strong relationships with our clients and suppliers has meant clear, quick and concise communication every step of the way.


Small businesses working with small businesses  

The pandemic has reaffirmed our decision to remain an independent firm, in a changing benefits landscape. We firmly believe that employee benefits programs are not a commodity; they require custom care and attention, and an engaged consultant that understands your business.

The landscape is changing, more over the last year than ever. Benefits consulting firms similar to ours have been part of an acquisition fever; large companies buying up other small, medium and large companies. For the Immix Group, despite the industry climate and opportunities, we feel staying independent is a major advantage. In short, it better aligns us with our clients.


When it comes to our small business community, the question we feel so heavily is ‘what can we do to help?’

The many articles on small businesses that you have likely been reading have a common thread: a plea for customers to continue buying from them. While we have no direct control over the re-opening of the economy, we can control our own personal spending and for some of us, our business spending.

So, at a personal level, buy from small businesses, when you can. Purchase a gift card now, to be used later. If you are a business, buy from and partner with other small businesses, when you can. As the stats show us, these are your neighbours, your friends and family, and most likely, your employer.  

We are all hopeful that businesses will be able reopen and thrive, even if under new rules and restrictions, but nevertheless, resume building, creating and providing valuable services.

If you would like to explore implementing a benefits program or reviewing your existing plan, we would love to help! Please contact us at 604-688-5559.  

* Government stats; latest data available is for 2018

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O 604-688-5262 E

Employee lay-offs and stoppage of work during COVID-19: Best practices for continued health coverage and premium management

Making the decision to lay off employees is not an easy thing to do. More than anything, many employers just want employees to be safe and healthy, and to return to work when operations are back to normal. Unfortunately because of cash flow pressures, many employers have been forced to lay off their staff, or are considering this move. While we are hopeful that the government support programs* detailed over the past days help employers to avoid layoffs, it is inevitable many will still need to take this step.

*The Government of Canada has released details on financial aid for both individuals and businesses, including a notable wage subsidy program, as well as the Canadian Emergency Response Benefit (CERB). These programs are intended to provide immediate financial aid, and to help businesses avoid layoffs during this time.  Please find details here:


Extension of benefits during layoff

For some, the reduction in expenses due to no longer paying wages is enough to ease the pressure. For others, benefits are also unfortunately being suspended. If you do want to extend benefits, and you’re able to do so, financially speaking, what should you be considering? There are numerous questions surrounding this:

  •  What is the process to do this?
  •  Which benefits are eligible for extension, and for how long?
  •  Can we apply for benefit premium reductions?
  •  Can we defer our program renewal?
  •  What else should we be doing?

To answer these questions, Employers need work with their Employee Benefits Advisors to assess the details. Here are some best practices to apply, and key guidelines to know.
*Note: This information is not specific to any one carrier as each has subtle differences. Due to the unprecedented nature of COVID-19, some of these are offered on an exceptional basis.


Typical layoff provisions in a benefits contract

In most benefits contracts, there is typically a layoff provision that allows benefits to be extended (with premiums paid) for up to 6 months. When the employee returns to work, they may be reinstated without any medical underwriting or requirement to serve the waiting period. Some carriers do not allow short-term and long-term disability to be included during this extension. And for those that do, most limit the duration of this to a shorter period than what would apply to the health and dental coverage.
 Furthermore, the provision could change depending on whether it is a temporary vs indefinite (no set recall time) layoff. Clients that do not have a layoff provision should review this and request one to be added.


Reduction in work hours and the impact on benefits eligibility

Many employees may be facing significantly reduced hours instead of a full layoff, and they may be below the minimum hours required to receive benefits. This is typically around 20-30 hours per week, or, you may have set your own minimum hours at the time your plan was established.
Some carriers are making an exception to this usual rule, and are not applying the standard requirements related to the minimum number of hours worked to be eligible for benefits. This is good news for those who wish to keep benefits running as usual.  


Deferral of your monthly benefits premium payment

As many Canadian businesses are facing financial strains, many carriers are offering to extend the payment grace period (normally 30 days) to 60 or more days. This means that member claims will not be suspended even if you cannot make your usual payment (up to a certain period). We believe this will continue to be offered, while business is affected in the manner we are currently seeing.


Deferral of your annual benefits renewal

For those on insured benefit plans, many carriers are helping to alleviate pressure on Canadian businesses by allowing renewals to be deferred. This means rate changes and any contract adjustments would not apply at the usually scheduled time. The deferral period varies from 1-4 months depending on the carrier, and this could change depending on how businesses are impacted going forward. So, if you have a renewal pending, and perhaps a premium increase had already been indicated (for example, for April 1st), this will not apply until later and a retroactive adjustment will not be required. This deferral does not apply to ASO (administrative services only) as these are self-insured.  In cases where you are expecting a proposed decrease in rates, that could still apply so that you are not losing out on any reductions.


Partial reduction of benefits coverage

To help alleviate financial difficulties while still wanting to provide vital health benefits such as drug coverage, most carriers are allowing certain benefits to temporarily be removed. In turn, this can reduce your premium. The most relevant benefit line for which this is applicable is the dental portion of the plan, as dental offices are currently closed. Dental premiums may be significant, and even up to 50% of your entire monthly benefits premium. Please note that this change would apply to the whole group, including active employees.


Temporary suspension of all benefit lines

Some businesses may wish to temporarily suspend their entire benefits program due to economic uncertainty. If all benefits have to be fully suspended for all members (laid off and active) then some carriers are allowing premiums and claims to be temporarily stopped for 3-6 months with no administration charges for reinstating. During a period of suspension, it is important to note that any claims incurred, including disability claims, will not be covered. This is an extreme measure.

It is important to note that there will be no waiting periods nor medical requirements (evidence of insurability) to reinstate employees when it is time to get benefits back up and running.


This is the time to promote your EAP

COVID-19 isn’t just affecting employees’ physical health, it’s causing mental health issues due to job and family stress, isolation, and general anxiety about the situation. Employer-provided mental health programs like EAP (Employee & Family Assistance Programs) can have a positive impact. So don’t forget about communicating the access details for your EAP if you have this included in your benefits program (a lot of plans include at least a basic EAP). EAPs can help with personal, emotional or work-related problems that affect health, mental or emotional well-being. They are available 24/7 in multiple languages!


Assess your Employee Benefits strategies

In short, businesses can continue to help support their employees’ health by continuing employee benefits via a variety of strategies to help alleviate financial pressures. Even if it is a full benefits suspension, it is essential to work with your benefits advisor to ensure the details are handled properly. With all the daily changes, keeping an active communication channel with your benefits advisor is important during this time.

As a consultant with the Immix Group, a full-service benefits firm with innovative solutions, we want to help. We are offering free consultations to any Canadian business, regardless of whether we are already partnered in business or not. We can work together to determine the best strategy for your situation.

For more information, please feel welcome to contact me:

Howard 2

Affordable and innovatively structured employee benefit programs