Alberta businesses, many of which believed they were on the brink of financial failure as the coronavirus tanked the economy, left millions of dollars worth of government assistance on the table in the first wave of the pandemic, according to an external report.
But support payments to small and medium-sized businesses in Alberta climbed by a factor of 10 after the province eased eligibility thresholds and increased the amount of money each firm could collect in the second and third waves, according to government figures.
Alberta, in June of last year, created a “relaunch grant” for small and medium-sized outfits that lost 50 per cent of their revenue in April or May, 2020. Over the program’s first 15 weeks, it paid out just $64.1-million of the $200-million initially earmarked for support, according to a report by KPMG LLP. The consulting firm, which Alberta paid to review the province’s response to the first wave, said the revenue threshold may have deterred companies from applying. KPMG also concluded Alberta business owners did not access a federal-provincial rent relief program to its full potential.
The slow start for support programs is a product of the chaos in the first leg of the pandemic for both governments and business owners. Politicians and bureaucrats rushed out programs, and some companies found the guidelines confusing or burdensome. Meanwhile, business owners had to determine whether they qualified – and whether it was worth the hassle.
“It was such an overwhelming time, with so many things being launched at the same time,” said Deborah Yedlin, the president of Calgary Chamber of Commerce. “People had to figure out what applied to them and where they should apply – and it just took a little longer for things to fall into place.”
Sharlene Massie, the founder of About Staffing, said her recruitment and employment agency was among the 13,979 successful applicants for Alberta’s relaunch grant in the first wave. Others, she said, were either ignorant to the program’s existence or stayed away because the rules were unclear.
“We found it because we were watching for absolutely every penny we could find,” she said. “A lot of companies were not aware of it.”
Many Albertans, Ms. Massie said, are also skeptical of government assistance, and worried the rules may change without notice, leaving them on the hook for money they don’t have.
Roughly 81 per cent of those who applied received the relaunch grant in the first wave, KPMG found. Payments were capped at $5,000 and the average grant totalled $3,745. The majority of applications came from the service industry, including personal care companies and food and accommodation businesses, KPMG said. The reported is dated January, 2021, but the Alberta government did not release it until Aug. 6.
The paltry participation rate skyrocketed after Alberta loosened the rules and purse strings. In the fall of 2020, eligible businesses that lost 40 per cent of their revenue in April or May could apply. In December, the revenue threshold dropped to 30 per cent and businesses affected by another round of public-health restrictions could receive a second payment of up to $15,000. Come spring 2021, the government put another $10,000 per eligible business on the table.
Alberta dropped the revenue loss threshold to 30 per cent “based on feedback from businesses,” according to Justin Brattinga, a spokesman for the Minister of Jobs, Economy and Innovation. “This provided a stronger incentive for businesses to apply and opened the program to more applicants.”
Since KPMG compiled its report, Alberta has distributed more than $700-million in grants to over 100,000 businesses, Mr. Brattinga said.
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