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A hand painted sign about the Canada Emergency Business Account is seen in the front window of Frances Watson, a store on Queen St. West, on April 15, 2020.

Fred Lum/The Globe and Mail

Entrepreneurs say an expanded loan program and a rent-relief proposal, both announced by Ottawa Thursday, still leave many small businesses behind because of payroll restrictions and vague details about how rent burdens would be reduced.

Prime Minister Justin Trudeau said Thursday that the $25-billion Canada Emergency Business Account (CEBA) loan program will now be available to companies that spent between $20,000 and $1.5-million in payroll in 2019, expanding the range of $50,000 and $1-million he announced last week.

He also said Ottawa is working to create a new program, called Canada Emergency Commercial Rent Assistance, to provide relief to small businesses for the months of April, May and June. The program is still in the early design stage, but is expected to provide loans, some forgivable, to commercial property owners to partly or completely cover tenants’ rent charges. It will require negotiations with the provinces before the final criteria are unveiled.

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Finance Minister Bill Morneau says the federal government is expanding a loan program for small- and medium-sized businesses suffering from the economic shutdown sparked by the COVID-19 pandemic. The Canadian Press

Small businesses were among the first to feel acute damage from COVID-19 as they shuttered to reduce its spread. Many already had razor-thin margins before revenue was wiped away over the past month as governments shut down whole sectors of the economy. Fixed costs such as rent are now piling up.

While Ottawa has announced a stream of relief programs, entrepreneurs and lobbying groups have consistently pointed out gaps that could force many small and medium-sized businesses to close for good, leaving owners and their employees with nothing to return to when the economy reopens.

Many of those gaps still persist with Thursday’s announcement, including for most businesses that do not use traditional payroll, such as self-employed workers who pay themselves through dividends and companies whose workers are hired as subcontractors.

“It blows my mind," said Stefanie Antunes, who runs the Toronto-area doula and prenatal-education company Discover Birth, and whose workers are all paid as subcontractors. Despite Thursday’s changes, Ms. Antunes is still not eligible for CEBA. “How are they missing so many businesses [who] don’t qualify? … There are so many people in this exact same scenario.”

Dia Ursomarzo runs Hounslow’s House, a café on St. Clair Avenue in Toronto. Since opening two years ago, she’s worked seven days a week as the sole employee, and taken no payroll to cover upfront and continuing costs. A sign reading “CEBA won’t save us” hangs from the shop window: She, too, is still ineligible for the program, and wonders what toll Ottawa’s fiscal response will have on many entrepreneurs.

When you’re a business owner trying to make your neighbourhood better, “it’s your dream and you love it,” Ms. Ursomarzo said. “But sometimes you sit back and wonder, ‘Should it be this hard to be a part of the community?’ ”

Ms. Ursomarzo reached out to her café’s landlord Thursday with news of Ottawa’s impending rent-relief plan, hoping for a sympathetic ear; she was able to defer April’s rent, but faces a double payment in two weeks. Many other entrepreneurs say rent is the problem governments need to solve soonest.

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Aaron Binder wasn’t even able to pay a 50-per-cent discount offered by his landlord for the April rent for his Segway tour company, Go Tours Canada. “We’ve had to beg for this,” he said. “It’s a first great step, but there’s obviously still a lot of questions.”

Those questions include whether rent will be forgiven or deferred – a crucial detail for entrepreneurs who don’t want to kick the pandemic’s financial burden to future months or years. The Canadian Federation of Independent Business said Thursday that it wanted premiers to push Ottawa for a program that would reduce or forgive rent, rather than defer it.

More adjustments to recently created programs are on the way, with details to be announced shortly on changes to a new wage-subsidy program to account for the specific needs of many organizations in the cultural sector.

Ottawa launched the CEBA last Thursday. The maximum $40,000 interest free-loans are offered through banks and credit unions. For businesses that repay the full amount by the end of 2022, one-quarter will be forgiven – meaning the loans can become grants of as much as $10,000. Mr. Trudeau said that, so far, 195,000 companies have qualified for a total of $7.5-billion in loans.

The extension of the CEBA comes as business groups urge governments to begin reopening some parts of the economy.

However, on Thursday, Mr. Trudeau repeated his view that current economic restrictions will need to continue for weeks. He said a phased-in reopening of the economy cannot begin until measures are in place for “massive” coronavirus testing and contact tracing, in addition to clear evidence that the number of cases has declined.

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“I think everyone understands that until we have a vaccine, until we are in a place where there is proper treatment, there is a massive amount of testing, we are not going to be able to talk about getting back to normal,” he said.

“It would be absolutely disastrous to open up too early or too quickly and have another wave hit us that could be just as bad as this one and find ourselves in a situation of having to go back into quarantine, the way we are right now, and have everything that we’ve done these past few weeks be for nothing.”

Conservative finance critic Pierre Poilievre and NDP finance critic Peter Julian both said Thursday that the changes still leave out many small businesses.

Mr. Julian said there is clearly more to be done, but that it was good that the government is responding to criticism raised by opposition MPs and business groups.

“We see this as an improvement,” he said.

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