The economic sectors hardest hit by the pandemic and physical distancing measures in Canada are still waiting for the extra federal relief promised almost a month ago.
In the fall economic update released at the end of November, Finance Minister Chrystia Freeland said the new Highly Affected Sectors Credit Availability Program would help businesses in sectors such as tourism, hospitality, air travel and entertainment with fully government-guaranteed financing.
At the time, the government said the program would “bridge these businesses through the crisis” and that the details would be available soon. But in a statement to The Globe and Mail last week, the government said more information would be available “most likely in January.”
That’s too long for some businesses, according to a survey of a coalition of hardest-hit sectors. It found that 23 per cent of businesses expect to run out of money in January. Another 19 per cent of respondents said that without new financing they wouldn’t be able to cover their expenses past February.
Forty-one per cent of businesses said they were expecting their revenues to drop between 91 and 100 per cent in November compared with the same month last year.
More than 2,100 companies participated in the survey. The majority of them were based in Ontario, British Columbia and Alberta and represented the tourism, accommodation and travel sectors.
“The need is urgent,” said Susie Grynol, the president and chief executive of the Hotel Association of Canada and a member of the coalition. She said her group would like to see the program rolled out in January with a streamlined approval process so that credit flows quickly.
Ms. Grynol said she was concerned by the lag time in establishing the program. The hardest-hit sectors are ones that rely on in-person gatherings, such as the arts and entertainment, and ones that are affected even when lockdowns are not in place because of rules against travelling and large gatherings.
“We hope that the time they are taking now will ensure a smooth, accelerated, unencumbered rollout,” she said.
In the economic update, the government said the program would provide loans of as much as $1-million with repayment terms of up to 10 years and interest rates below typical market rates. A total budget for the program was not provided at the time.
In a statement to The Globe, a spokesperson for Small Business, Export Promotion and International Trade Minister Mary Ng said the Business Development Bank of Canada is working with financial institutions to create the program.
“This work is ongoing and with urgency, because we know that businesses are counting on this support,” Youmy Han said in an e-mail.
She said other government support programs are already working to bolster struggling businesses through wage subsidies, emergency business accounts, rent relief and regional recovery funds.
In the economic update, the government promised to allocate at least a quarter of its Regional Relief and Recovery Fund to local tourism.
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