by Guy Crittenden, Content Developer for ERIS
April 17, 2020
The current pandemic and lockdown in Canada and most industrialized nations is disrupting work routines and the overall economy. This report summarizes some of the comments and insights gleaned from an online lunchtime forum hosted by the Ontario Environment Industry Association (ONEIA) on Thursday, April 16 in which the organization presented results from a recent industry study and reports from a range environmental service verticals.
Town Hall Structure
On April 16, 2020, the Ontario Environment Industry Association (ONIEA) hosted a one-hour lunchtime information “town hall” in which the results of a recent member survey were presented that reveal how COVID-19 is impacting the province’s environment industry, followed by sector-specific updates and group discussion. Many of the findings are likely applicable in other jurisdictions.
Terry Obal, Chief Science Advisor at Bureau Veritas and Chair of ONEIA, offered opening remarks and then turned the platform over to ONEIA’s Executive Director Alex Gill.
Gill reminded the more than 50 participants that ONEIA’s mission is to “turn science into commercial solutions for environmental challenges.” ONEIA’s Advocacy Committee directs this work, and is organized in subcommittees in areas such as Brownfields, Resource Recovery (waste management), Water, and Climate. These subcommittees reported in turn, led by Advocacy Chair Paul Murray, Senior VP, AECOM after Gill presented recent member survey results.
ONEIA Industry Survey
The ONEIA survey was in the field from April 5 to April 14, 2020 and was designed to grab a quick “snapshot” of concerns and issues as they relate to maintaining operations during the current COVID-19 pandemic. The survey generated responses from 43 companies. (Full survey results here)
Just under 60 per cent (59%) of respondents provide environmental services, with 19 per cent coming from producers of environmental goods or products/technologies, six per cent from advocacy groups or NGOs and 16 per cent “other.” The primary environmental focus of companies was quite evenly distributed between Air (13%), Energy (12%), Brownfields/Soils (16%), Waste/Recycling (17%), Water (17%), Technology (5%), Consulting (18%) and Other (2%).
Impact on Revenues
COVID-19 and the lockdown are impacting environmental service companies in a range of ways. While only one-quarter of survey respondents are seeing no change or a revenue increase, almost a third are seeing a slight decrease, and an additional third are seeing a significant revenue decrease. Fifteen per cent are “unsure” at this point, 13 per cent see no change so far. Three per cent fit the extremes of either seeing a significant increase in business or a significant decrease.
Staffing and High Impact Areas
Gill reported that fully half of survey respondents expect their staff numbers to stay the same or increase, while half expect the opposite. About 44 per cent expect “no change” and eight per cent expect to increase staff levels. Meanwhile, 46 per cent expect staff to decrease. Sadly, three per cent of respondents expect to “close” their businesses.
As one would expect, staff travel has been highly impacted by the pandemic. Forty-five per cent of respondents report a significant impact on staff travel, with another 24 per cent saying the impact will be moderate. When asked if their firms are facing “additional operative pressures,” replies were more in the middle, with about a third reporting “moderate impacts” and another third a “slight impact.”
Around a third of respondents (34%) say clients have “canceled contracts or slowed their decision making on new ones” to a significant degree; another third (29%) say the impact is “moderate” and almost another third report a “slight impact.”
Unsurprisingly given the lockdown, 42 per cent of survey respondents say COVID-19 has significantly affected important meetings and attendance at industry events, with a quarter (26%) reporting a moderate impact.
The survey asked ONEIA small and medium size enterprises (SMEs) whether the federal wage subsidy program is helpful. Eighteen per cent said the program is “very helpful” and 15 per cent answered “somewhat helpful.” A third (36%) indicated the program was “not helpful” while 9 per cent indicated this didn’t apply to their operations, and 21 per cent said they didn’t know (yet). Some suggested that the 10 per cent wage subsidy “for those with under 30% revenue loss” would be helpful.
ONEIA asked members if four government programs were helpful, and the answers were very positive. These were: payroll and general tax breaks and credits (80% helpful); fast-track approvals and government contracts (also 80%); the large economic stimulus package (70%); and, zero-interest loans (65% helpful).
Discussion by Sub-Sectors
Advocacy Chair Murray then invited each of the committee chairs and other reps to report on how the CVOID-19 pandemic is affecting their vertical sectors and to share any tips on how they’re coping. Presentations were made on resource recovery (waste management, recycling, etc.), air quality, water testing, and more.
The report on how COVID-19 is affecting the brownfields redevelopment industry was of greatest relevance to ERIS clients.
Consulting engineering firms report most of their companies’ environmental services are still deemed “essential,” but that it can be a challenge to figure out what projects match which definitions in different jurisdictions. (Read ERIS’ blog about ‘Essential Services’ here.) Engineers performing everything from Phase One ESAs to onsite soil and water sampling have apparently altered their routines to comply with self-distancing and other hygiene protocols. Best practices include having staff travel separately to job sites and maintaining a two meter distance when working together. Several experts noted that the oil & gas sector has slowed noticeably (likely due to record-low oil prices). Yet, finances are a larger factor in projects moving forward at this time than whichever category a projects fit under.
Environmental testing labs were initially hit with a tsunami of activity as clients rushed their samples for testing, during the brief period when it was uncertain as to whether labs would be deemed “essential services.” Things slowed down after labs were declared essential and the situation now resembles 2008-09 after the last economic crisis. The oil & gas business has dried up considerably, and the two-week outlook is fuzzy, especially with large clients. Some labs are still busy serving small and medium size clients; with less field work these days, some labs are focusing on such things as routine monitoring and water testing.
It was noted that COVID-19 has interrupted some company’s implementation of Ontario’s new excess soils regimen, which was introduced late last year. At just the time clients needed to attend professional events to learn about the new rules for excess soils, conferences and workshops have been canceled. However, in-person gatherings appear now to be shifting to online meetings, so some amount of education can continue even during the lockdown.
A wide-ranging discussion followed the presentation from sub-sector reps, highlights of which included:
- Some SMEs that have cash available are upgrading IT, software and information systems, and enjoying price discounts.
- Larger firms have discovered that at least some of their staff can work from home and still perform well. Some of this will continue even after lockdown ends, as companies realize savings, including from a reduced office real estate footprint.
- Some facilities (e.g., refrigeration and cold storage) are experiencing improved efficiency from innovative software and remote monitoring of sites.
- Supply chain disruption was discussed and is considered a major concern. Many orders from China, for instance, are apparently delayed by 90 days. Lawsuits are underway over supply chain disruption and government policies could help remove risk from the market. Increased risk has led to insurance companies raising prices.
- Supply chain disruption may trigger legal issues around such things as assessing the quality of new suppliers, contractual obligations, evaluation of new prototypes, plus procurement and licensing issues.
- Legal issues attend government fast-tracking, retraining programs, and changes to corporate policies and procedures.
- On the flip side, potential clients stuck at home may have more time to receive and assess business proposals.
ONEIA Industry Survey: COVID-19 and its Impact on our Industry – FULL SURVEY RESULTS
Norton Rose Fullbright has some resources on its website some firms may find useful in adjusting operations in light of COVID-19. Access the material here.
ONEIA offers an especially robust number of resources and tools on its website that you can find here.