Small-business groups are urging the federal government to keep up long-term assistance for independent businesses in next week’s budget as Ottawa plots a path to economic recovery.
The federal government, which tables its first budget in more than two years on April 19, has been responsible for the most extensive business supports in the pandemic. The most popular programs have been the wage subsidy, which has provided more than $73-billion to nearly 440,000 unique applicants, and the Canada Emergency Business Account, which has provided $46-billion in partly forgivable emergency loans to more than 500,000 small businesses. The rent subsidy, which got off to a rocky start last year, has dispersed a total of $2.6-billion since being retooled in the fall.
Dan Kelly, president of the Canadian Federation of Independent Business, said economic recovery has been very uneven. For instance, while real estate or technology companies may be doing well, businesses that bore the brunt of public-health restrictions – such as food services or hospitality – have racked up large debts and laid off staff.
“A lot of the aggregate numbers for the economy as a whole really mask the carnage that is happening to certain sectors of the economy,” Mr. Kelly said.
He said one of the biggest requests from his members is to keep programs such as the wage and rent subsidies going long-term. Without continued support from the government, he said, small businesses could see a wave of bankruptcies in the summer and fall after the programs expire in June.
That call is echoed by other groups representing hard-hit sectors, such as Restaurants Canada, which has suggested the rent and wage subsidies should continue until at least April, 2022.
In addition to extending current programs, the CFIB has advocated for closing eligibility gaps. One of the largest gaps has been for small businesses that began operations after the pandemic got under way in March, 2020.
Jay Vallis, an owner of Piatto Pizzeria, had one of her restaurants fall through the funding cracks last year. The chain of eateries, which specialize in Neapolitan pizzas, was founded in St. John’s in 2010 and expanded across Atlantic Canada over the next decade. In 2018, Piatto gained its first foothold in the Ontario market with a location in Cambridge, and in 2019 the Vallis family signed a lease for another expansion into Guelph.
Ms. Vallis said Piatto spent about $1-million on its restaurant in Guelph, which finally opened – after pandemic-fuelled construction delays – in August, 2020. Even with lower capacity owing to public-health restrictions, the restaurant had a good opening, she said. But when strict lockdowns in Ontario resumed and the pizzeria could only do takeout, revenue was down 80 per cent from its early months.
Because the Guelph restaurant wasn’t open in March, however, it has not been eligible for federal funds.
The federal government has maintained over the past year that it can’t allow new businesses to access wage and rent subsidies because there is not a prepandemic baseline of revenue with which drops can be compared.
Ms. Vallis said that doesn’t make sense to her, as she could show them clear drops from when the restaurant was open in the fall to when it was closed by public-health order in the spring.
“I don’t understand why the government can’t see that as a drop,” she said.
She said the chain’s restaurants in Atlantic Canada have fared much better, in part because they can access federal programs, but also because of lower COVID-19 case counts and fewer days under lockdown.
Katherine Cuplinskas, a spokeswoman for Finance Minister Chrystia Freeland, said the government could not comment on any coming program changes or what was in the budget.
“The federal government continues to actively assess its support measures to ensure workers and businesses have the support they need,” she said in a statement.
Other budget requests may be less costly to federal coffers.
Karl Littler, senior vice-president of public affairs for the Retail Council of Canada, said one of his group’s big requests is for the government to finally fulfill a 2019 campaign promise to eliminate credit card “swipe fees” that merchants must pay on federal sales tax. That promise has become more urgent during the pandemic, he said, as the number of credit-card transactions has risen dramatically because of falling cash payments and more online shopping.
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