As new pandemic restrictions sweep across the country, business owners and associations say governments aren’t doing enough to support the hardest-hit sectors of the economy.
The rapid spread of the Omicron variant of COVID-19 has led provinces and territories to introduce new restrictions that include 50-per-cent capacity limits for most indoor settings and early closing times for bars and restaurants.
Nick Di Donato, president and chief executive of Liberty Entertainment Group, which operates restaurants and event venues in Toronto, said he understands the province needs to take action against the coronavirus. But he argued Ontario’s new restrictions, announced on Friday, should have been accompanied by a financial relief plan for businesses.
“We’re either going to crumble or we’re going to have to take the hard line and lay off our employees,” he said.
“Employees are the variable, because I’ve got to pay my taxes, I’ve got to pay my rent.”
Mr. Di Donato said he is now waiting to see whether the Ontario government will offer financial help. He is also unsure whether Liberty will qualify to receive federal pandemic-relief wage and rent subsidies, which are now limited to businesses that operate in specific hard-hit sectors. The businesses must also have suffered revenue losses of at least 40 per cent, or at least 50 per cent for certain industries.
“I’m issuing refunds as we speak,” Mr. Di Donato said. He estimated Liberty received around 2,000 cancellations for New Year’s Eve after the province cut capacity at venues and required them to stop selling alcohol by 10 p.m. and close by 11 p.m.
Rocco Rossi, president and chief executive of the Ontario Chamber of Commerce, said gyms, restaurants and entertainment venues will take on big losses until provinces step in. Many of them, he added, have been losing money for 22 months, since the first lockdowns hit.
“Every moment that passes, more businesses are going to decide that this is the end and to shut down,” Mr. Rossi said. His organization estimates roughly 50,000 businesses in Ontario have closed permanently since the start of the pandemic.
Mr. Rossi and Mr. Di Donato both said governments could provide immediate relief to businesses by waiving sales tax repayments for those in some of the hardest-hit provinces and industries.
Data from the Canada Revenue Agency show the country’s total HST and GST debt level sat at $14.3-billion in September, up 24 per cent from March, 2020.
Mr. Di Donato said waiving repayments would be a way to help businesses with cash flow, which would be especially beneficial since payments from programs such as the federal wage subsidy often take months to arrive.
Ryan Mallough, the Ontario senior director of provincial affairs for the Canadian Federation of Independent Business, said the federal government’s aid requirements are overly strict.
The federation estimates around 80 per cent of small businesses in need of financial support will not meet the 40-per-cent to 50-per-cent loss threshold to qualify for help.
“Realistically, a restaurant with a loss of 30 or 35 per cent, that’s not viable for the business, but you’re not losing enough money to be eligible for federal help,” Mr. Mallough said.
Michael Ballingall, senior vice-president of Big White Ski Resort, which owns about a dozen bars and restaurants near Kelowna, B.C., said his company would be able to weather current restrictions. But he added he is disappointed that the federal government’s pandemic-relief requirements for businesses are so strict, especially when the hospitality sector continues to struggle with worker shortages and a lack of international visitors.
“It’s absolutely insufficient,” Mr. Ballingall said. “With the spread and more paranoia from people about entering more buildings, the entire industry is going to be affected.”
Mr. Mallough pointed out the shortest lockdown in Ontario was the first one in 2020, which lasted three months. He said governments need to be prepared to support businesses for the long haul again.
“There’s a lot of pessimism or foreboding,” he said. “There’s concern that this is going to be around for a while.”
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