Ottawa eyes changes to business supports as Omicron wreaks havoc

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The federal government is considering changes to its recently approved COVID-19 support programs to help small businesses that are struggling with the rising wave of Omicron and new provincial restrictions.

Coronavirus case counts have doubled in recent days in many parts of the country, fuelled by the highly contagious Omicron variant. Provincial governments have responded by quickly announcing new restrictions on private gatherings and commercial businesses. For example, Ontario and Manitoba halved the number of people allowed in places such as restaurants and theatres, while Quebec went the furthest by giving residents only a few hours to prepare for an emergency order that closed schools, bars and other gathering places.

The measures were put in place as businesses were experiencing a holiday rush of parties and Christmas shopping that many were hoping would make up for revenue lost during past lockdowns. But unlike earlier in the pandemic, the main federal aid programs have ended for many businesses or decreased in the amount of support they provide.

Two of the main lobby groups for small businesses – the Canadian Federation of Independent Business and Restaurants Canada – issued an open letter to the premiers asking for them to urgently help.

“Put frankly, tens of thousands of small firms across Canada will receive no support from governments while government restrictions dramatically reduce their ability to serve customers and public-health warnings frighten many consumers into staying home,” CFIB president Dan Kelly and Restaurants Canada chief executive officer Todd Barclay said in the letter.

Finance Minister Chrystia Freeland’s office said the government is considering changes to the federal supports because of the threat of Omicron.

“In light of the public-health situation and new restrictions in a number of provinces, we are actively assessing if regulatory adjustments are needed to provide additional flexibility for the support measures contained in Bill C-2,” spokesperson Jessica Eritou said in an e-mail Tuesday.

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The quickly moving situation has thrown business owners for a loop.

Dwayne Rutherford, a corporate events planner, had organized a 500-person holiday party for a tech company at a Toronto convention centre as recently as Dec. 3. Since Thursday he’s been fielding calls from clients worried about events in the new year, and that two commitments in January have now been cancelled. He said he considered surviving this far into the pandemic a badge of honour, but the latest wave has him wondering if it’s time to move into a new industry.

“Christmas is coming up,” Mr. Rutherford said. “You want to, you know, give the family a great experience and spend time with them. And I’m thinking about, how do I put food on the table in January?”

Kyle Nascimento, co-owner of Best Portuguese Chicken in Toronto, said he had a wave of cancellations start to roll in on Wednesday night for large orders, as well as a sudden drop in walk-in customers. Because the chickens are seasoned ahead of time, he said by the weekend he found himself with nearly 300 uncooked birds and nowhere for them to go.

“We were left with quite a bit of chicken,” he said. He ended up donating the poultry to a fire department, a shelter and a group of food banks.

All the disruptions to businesses will drive demand for the limited federal support programs that were approved by Parliament last week.

Bill C-2, which included the new programs, was introduced on Nov. 24, more than a month after the previous round of aid had expired. At the time, the possibility of further lockdowns seemed unlikely and the bill did not move with urgency. The initial attention on the bill focused on parts that extended wage and rent supports for businesses in the hardest-hit sectors of the economy, such as tourism and food services.

But the bill also included a Canada Worker Lockdown Benefit Act that would revive direct payments to individuals who have lost their income because of government lockdown policies. The provisions are similar to the Canada Recovery Benefit, which was paid directly to workers, but expired on Oct. 23. Lockdown benefit recipients would receive $300 a week, the same as the CRB.

The legislation defines lockdown order as “the closure to the public” of commercial premises. However, it does give the federal government the power to declare any region as a lockdown region for a period of time, through regulation.

Ms. Freeland was asked last week in the Senate whether the lockdown benefit would apply to situations where governments have imposed capacity limits, but not full closings. The minister did not rule out that possibility.

“Once this law is on the books, I will be very happy to speak with [provincial and territorial leaders], look at the measures that they have in place, talk to our public-health authorities and to consider where they do qualify for the lockdown support for workers and businesses,” Ms. Freeland told the Senate on Dec. 16. The minister also said her recent fiscal update included $4.5-billion in new money related to dealing with the Omicron variant, which had by then started circulating widely around the globe.

The federal NDP said the Liberal government’s lockdown benefit is flawed because it fails to directly address partial closings or capacity restrictions.

“This government has got to help those workers whose hours have been drastically reduced,” NDP finance critic Daniel Blaikie said in a statement. “They have to help the self-employed people who have no idea how they’re going to keep paying their bills.”

The NDP opposed the government’s decision to end the CRB in October and said the previous support programs should be reinstated.

The legislation also extends federal wage and rent supports, but divides them into two narrow categories: the Tourism and Hospitality Recovery Program and the Hardest-Hit Business Recovery Program. The tourism and hospitality program is more generous, providing a subsidy rate of up to 75 per cent to businesses with a revenue loss of at least 40 per cent.

Business owners and industry groups have raised concerns with the 40-per-cent cutoff, saying it is arbitrary for the government to draw an all-or-nothing line for support.

Christa Bruneau-Guenther, the owner of Feast Café Bistro in Winnipeg, said the past two months had been a boom time for her restaurant until new restrictions came into effect in Manitoba on Tuesday. She said she’s now at half-capacity and facing the prospect of again having to lay off staff because she doesn’t have the money to keep them on, and with the labour shortages in the industry, it was hard to find good staff members to hire in the first place.

She said there will be extra time and money involved with pivoting back to the prepared foods she offered during past lockdowns, along with having to work with her accountant to go through her books to see if she will qualify for the new version of the federal subsidies.

“Hopefully the government will continue with these programs, because I feel that those programs are why a lot of small businesses are still around,” Ms. Bruneau-Guenther said.

Donna Moerenhout, owner of Razors Barber Shop in London, Ont., said she is dreading the prospect of more restrictions because past lockdowns were so devastating to the personal-care industry. Hair stylists and barbers have had to close for months at a time in Ontario, fuelling an unregulated, underground haircutting industry, which Ms. Moerenhout attributes to why less than half of her clients have come back since she reopened.

“My bills don’t stop because I’m locked down,” she said. “You still have to pay them, whether you’re working or not. Where is that money supposed to come from?”

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