Manitoba business owners feeling financial hit from coronavirus

Manitoba business owners who rely on China for their revenue are feeling the financial impacts of the coronavirus, and a business expert says this may just be the beginning.

Consumers will also 'feel the pain' as exports slow, business strategist says

Guangrui (Ray) Jin worries he will have to shut down his travel agency since many travellers are cancelling their flights because of the coronavirus. (Submitted by Guangrui (Ray) Jin)

A Winnipeg travel agent says he's busier than ever, and spending all his time cancelling and rescheduling flights due to coronavirus concerns — but that doesn't mean he's making any money.

"I don't have money to keep paying for it," said Guangrui (Ray) Jin, who opened Aomogo Travel, which specializes in trips to China, about a year ago.

Multiple airlines have suspended flights to China as the number of people around the world infected by the coronavirus, which is centred in Wuhan city, climbs. The Canadian government is advising citizens to avoid all non-essential travel to China, and asking Canadians already in the country to reconsider whether or not they need to be there.

Most of Jin's revenue comes from ticket sales, but while customers are cancelling their trips to China, Jin still has to pay his rent and wages for his handful of staff. 

"If the virus keeps going, like maybe my business [has] to shut down."

Cancelled trips and contracts

Jin's travel agency is not the only small business in Winnipeg suffering financial impacts from the global health emergency. 

Dan Henrickson runs a Winnipeg-based company called Teach ESL China Inc., and makes half of his revenue from connecting people with teaching jobs in Shenzhen, China — about 1,100 kilometres south of Wuhan.

Dan Henrickson said English teachers are trying to cancel their contracts with his company, Teach ESL China Inc., because they don't want to go to China. (Neil Reimer)

He said some of his teachers are trying to cancel their contracts with his company because they no longer want to go to China.

"We're trying to ask them if they can just wait for a week or two," he said. 

Henrickson said he's in touch with teachers currently in China and they're aware of the coronavirus are making adjustments. He said some teachers have travelled to nearby countries and others are teaching online because the semesters have been delayed. 

But he expects this is not just a short-term problem.

Projected long-term impacts

"It certainly just leaves a stain on people's impression of China," Henrickson said. "Because four months from now and six months from now if China comes up, you know they will remember this thing that was splattered on the news."

This perception could also have financial repurcussions.

The global economic impact of the coronavirus could be worse than SARS because the world has never been more interdependent than today, said Victor Cui, an associate professor in business strategy at the Asper School of Business at the University of Manitoba.

Victor Cui, an associate professor in business strategy at the University of Manitoba, says the global economic impact of the coronavirus could be worse than SARS. (Tyson Koschik/CBC)

"It's playing a very heavy role in the world's economy and stability — much heavier than 17 years ago when we had SARS virus," Cui said. 

China's economy might take months or even years to recover, which could impact Manitobans too, he said.

Every company that ... depends on Chinese consumers for sales will experience a very costly problem very soon.- Victor Cui


In order to help stop the spread of the coronavirus, some manufacturing, retail and service companies have shut down or slowed down.

"The Lunar New Year is equivalent to our Christmas but it is longer. It's like 15 days of celebration," Cui said. "Last year alone the restaurant industry made about Cdn $200 billion," he added.

Exports to China could slow

A slow-down in the service industry in China means fewer exports of lobsters and crabs from Canada's coast to China, Cui said. 

That could also mean Manitoba pork exports to China might slow down, too.

"Every company that relies on Chinese [factories] to make their products or depends on Chinese consumers for sales will experience a very costly problem very soon or [has] already experienced that," Cui said. 

Beyond companies, Cui said consumers "will feel the pain." 

"If China stopped producing stuff, or delayed delivering everything we need [from] Walmart, we are going to see that happening in the next few months or next quarter," Cui said.


Danelle Cloutier

Associate Producer/Technician

Danelle Cloutier is an associate producer and audio technician in current affairs at CBC Manitoba. She has a background in audio engineering and journalism.