‘Many of these businesses will fail’: Canada’s small business sector pushes for support extensions

The clock is running out on federal programs that have acted as a lifeline for Canadian small businesses throughout the COVID-19 pandemic, leaving many of them worried about how they’ll get through the coming months.

The Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) are set to expire on Saturday, Oct. 23.

With the deadline quickly approaching, the Canadian Federation of Independent Business is out with some stark numbers, showing many continue to struggle, 19 months into the health crisis.

According to the CFIB, only about 45 per cent of small business owners in B.C. say they are either back to normal or above normal revenues right now. Across Canada, 60 per cent of businesses report sales being “off or way off normal” as a result of pandemic restrictions and customers not returning to their old shopping habits.

"So many small businesses are near panic." That from the @CFIB as COVID-related support programs for businesses are set to expire this weekend. Fed. gov't facing pressure to extend them. "This is going to be a very lean winter if they don't. Many of these businesses will fail."

— Monika Gul (@MonikaGul) October 20, 2021

“Here we are, 19 months into the pandemic, and across Canada, only 75 per cent of small businesses are fully open,” explained Dan Kelly, CFIB president and CEO, who adds only about half have been able to bring back all of their staff.

Kelly notes the consequences of not providing continued support to small businesses could be dire.

“This is going to be a very lean winter if they don’t. Many of these businesses will fail. The CFIB’s earlier estimate was that 180,000 businesses will permanently close their doors before the end of the pandemic — that’s one in six businesses in Canada gone forever due to the damage that they sustained due to COVID-19 restrictions. That would be a huge, huge economic calamity we cannot allow to happen,” he said.

The CEWS pays qualifying applicants a percentage of their employees’ pay subsidies based on their revenue loss. The government said it was created in hopes of saving jobs, and enabling re-hires to help with the return to normal.

The CERS allows Canadian businesses, non-profit organizations, or charities who have seen a drop in revenue during the COVID-19 pandemic to receive a subsidy to cover part of their commercial rent or property expenses.

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“The challenge is that these programs are ending before all of the restrictions have been lifted,” Kelly said, citing vaccine passport systems as one measure that has impacted many businesses.

He says proof of vaccination requirements have meant many businesses are not able to serve all of the customers they might have been able to before. Capacity controls, as well as public health messaging are some other things Kelly points to as measures that are impacting the sector.

“If we’re going to limit the businesses’ ability to serve its customers, then it really is incumbent upon governments to step up and fill the gap, otherwise these businesses are having to eat the costs of COVID protection all on their own. That’s just not fair,” he told CityNews Wednesday.

Kelly is “still optimistic” the federal government will extend the programs, calling them crucial, saying business owners need as much support as they can get to have more certainty in the months ahead.

Federal government leaves small firms in the cold during Small Business Week: Wage and rent subsidies expire Saturday

https://t.co/EcBnAXgcNa

— Dan Kelly (@CFIB) October 20, 2021

The CFIB adds the only businesses that receive any help from the subsidies are those with significant losses in revenue and their survival and recovery should be the government’s top priority.

However, these programs have been costly. So far, about $93 billion has been given to businesses through the wage subsidy alone — prompting some to argue it’s time to cut the cord.

Time for programs to end, say some Canadians

According to an Angus Reid Institute survey, 41 per cent of Canadians say it’s time for the support programs, as well as a few others, to come to an end. Among those people, the pollster has found 29 per cent have received benefits themselves.

Meanwhile, another 16 per cent of respondents say the end of the year seems like the right time to scale back on those programs.

Two thirds of Canadians say the programs shouldn’t continue past June of next year.

The Angus Reid Institute finds the rate of inflation appears to be driving much of these opinions, with nearly 90 per cent of respondents saying the rising cost of living is more of a concern than the possibility they may lose their jobs.

Overall, 45 per cent of Canadians polled tell the institute they’re finding it hard to make ends meet right now. The most economically vulnerable are the hardest hit, with more than 90 per cent of people identifying in this category saying they are struggling to put food on the table.

Kelly says he understands the high cost of the programs impact all Canadians, and notes they can’t continue forever. However, he says the federal government also can’t leave small businesses behind until all COVID-19 restrictions are lifted across the country.