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Amanda Munday, owner of The Workaround, a shared office space in Toronto’s east end, on March 17 2021.Fred Lum/the Globe and Mail

Two years into the COVID-19 pandemic, Amanda Munday’s business is finally coming off life support. She almost didn’t make it.

The owner of The Workaround, a combination co-working office space and daycare in Toronto’s east end, had scraped through the first 18 months of the pandemic, surviving on reduced staff, increased debt and, crucially, federal and provincial support programs. But when the new school year arrived in the fall of 2021, her customers didn’t come back.

“It was a full-blown existential crisis of, the business has fundamentally changed,” she said. “I made October payroll, but with, like, $65 left in the bank account – with dwindling sales, and the government saying that the subsidies were wrapping up.

“I thought, this is it. We’re going to die a slow death.”

But when I called Ms. Munday last week, she didn’t immediately get back to me. She was busy.

“I don’t know what to tell you, it rebounded in the past couple of months. We’re in a cash-flow-positive position, I’ve got reserves, I haven’t had to rely on [government] subsidies for the first time since this began. I covered all expenses with actual sales in February.”

Ms. Munday has served as my reality check as I’ve written about the impact of the pandemic over the past two years – a voice from the front lines of what has been a long, up-and-down struggle for the country’s small-business owners. We first talked in the shocking early days of COVID-19, when businesses were shuttered overnight and had no idea how they would make their next payroll or rent payment. We reconnected a year ago, when government programs had done enough to keep most small firms alive, but mounting financial obligations had been kicked down the road.

Now, she reports that her business is running pretty much at full speed – although full speed is a lot less than it used to be, the reality of running a high-contact business in a COVID world. She’s making enough to get by, but revenues are about 40 per cent below where they were before the pandemic. She has more debt, and rising costs.

“I’m running a business that is cash-flow-positive in the new world, which is good news. But I am not running the same business I was pre-COVID. It’s not even close to what it was.”

It’s a reminder that when we talk about statistics showing that the economy has returned to full employment and full capacity, those are aggregate numbers. For many individual businesses, a lot has changed in the past two years – many haven’t returned to their pre-COVID normal, and some wonder if they ever will. Most have survived the crisis, but not without financial scars.

“While it is good news that COVID restrictions are finally being lifted across Canada, the economic damage to small business has been massive and has left many in a very precarious position,” Canadian Federation of Independent Business president Dan Kelly said in a news release last week, marking the second anniversary of the pandemic.

The CFIB’s monthly indexes of business confidence rose smartly in February, with businesses expressing more optimism as the impact of the Omicron variant has faded. Yet two-thirds of business owners surveyed agreed with the statement that, “Two years into the pandemic, I am closer than ever to burning out.” Nearly one-third of businesses say they are not fully open, two years after the pandemic began. Nearly two-thirds report that sales are still below prepandemic levels.

Certainly, government support programs have succeeded in keeping many businesses from outright failure. The most recent insolvency statistics from the Office of the Superintendent of Bankruptcy Canada show that business insolvencies in the 12 months ended January, 2022, were 32 per cent lower than in the 12 months prior to the pandemic.

“There’s no question, the government support saved us,” Ms. Munday said.

But in the recent Canadian Survey of Business Conditions from Statistics Canada, one-quarter of businesses said they can’t handle any more debt. The CFIB’s data show that two-thirds of small businesses took on more debt during the pandemic, with an average increase of $158,000 – a big burden for individual owners who are, in many cases, personally responsible for their businesses’ debts. Fourteen per cent of small firms say they are considering declaring bankruptcy or winding up their businesses.

“Nobody came through the pandemic cash-positive,” Ms. Munday said of her fellow business owners along Toronto’s busy Danforth Avenue – a strip dominated by small, independent operators who, she said, mostly live in the neighbourhood. (She’s on the board of the local business association.) Her own debt has increased by $150,000 during the pandemic.

She said the moment of truth for a lot of merchants will be when their leases come up for renewal. Rents are rising fast, and many businesses are in the same boat as The Workaround, unsure if their revenues will ever return to prepandemic levels. Even as health restrictions are removed, many small retailers are grappling with the rise of work-from-home and online shopping that may have permanently changed customer behaviour. Ms. Munday has already decided to relocate The Workaround when her lease is up in October, 2023.

In the meantime, she’s enjoying the brighter days for the business. But the roller-coaster ride of the past two years has taught her not to count on this being permanent.

“Four months ago, I was terrified that we were done; now I’m having an up moment. I don’t know that I believe it’s going to stay this way. There are all kinds of variables that can spook people again.”

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