NEW AID PROGRAM TARGETS HARDEST-HIT ALBERTA BUSINESSES. IS IT ENOUGH?

Hardest-hit businesses bleeding cash

Caught in the undercurrent of the second wave of COVID-19, thousands of Alberta entrepreneurs are struggling to keep their businesses afloat.

Many have been forced to close their doors. Others are facing public health restrictions and hemorrhaging cash.

On Wednesday, the UCP government rolled out a new $120-million program designed to keep them going, providing additional grants of up to $10,000 to eligible small and mid-sized businesses.

It should help.

But will it be enough to make a tangible difference to some of the most financially distressed businesses in the province today — and will the aid arrive in time?

These are questions that small-business owners and industry groups will be examining in the coming days.

The new Enhanced COVID-19 Business Benefit is designed to provide assistance to companies, co-operatives and non-profits with fewer than 500 employees, if their revenues have plunged by at least 60 per cent.

The program will be available this spring.

Jobs and Economy Minister Doug Schweitzer expects the hardest-hit small enterprises, such as gyms, dance studios and tourism companies, will access the program, although others will be eligible if they meet program criteria.

“We want to make sure this is targeted support to small business of up to $10,000, particularly for businesses that have been impacted the most by health orders — as well as we are targeting this at just gaps in the federal programs,” Schweitzer said.

“We are anticipating north of 10,000 businesses would be able to take advantage of this new program.”

Schweitzer expects it will take six to eight weeks to develop the new initiative. Once operating, cheques will likely start to roll out, on average, in about 10 days.

“Our goal is to have this available in the early part of April for applications,” he added.

“We think this is going to be enough to help get them through this most recent reopening stage.”

The program comes as many small businesses that were forced to close in December, such as restaurants, pubs and personal service firms, have recently been allowed to reopen because of the lower numbers of COVID-19 cases.

Many are operating under strict limitations.

The health measures are necessary, but for business operators, it's like trying to fight a battle with both hands tied behind their back.

Last year, the province created a new program — the Small and Medium Enterprise Relaunch Grant — to aid firms affected by the initial lockdown. It was expanded later in the year and now provides grants of up to $20,000, if a company's revenues have dropped by 30 per cent or more.

Applications for the relaunch grant close at the end of March. Schweitzer expects it will provide close to $600 million to more than 50,000 businesses.

The new program comes at a perilous time for many business owners.

In Alberta, more than two-thirds of small business operators say they're worried about the survival of their companies; almost four in 10 say a return to profitability is at least a year away, according to a recent survey by the Canadian Federation of Independent Business.

Time is at a premium to get money into their hands.

“My first initial concern is that the hardest-hit industries, they need provincial support — and they need it now,” said Annie Dormuth of the CFIB.

“Asking these businesses to wait a month-and-a-half for an additional $10,000 is very disappointing.”

Businesses such as hotels, tourism companies, gyms and restaurants have seen steep drops in revenue due to public health measures.

In the province's fitness sector, for example, the average gym is losing $20,000 a month during the shutdown, according to an industry survey.

Last week, businesses in the sector were permitted to offer scheduled one-on-one instruction, although many haven't reopened because of these limitations, said Andrew Obrecht, co-founder of YYC and YEG Cycle Spin Studios.

His business is losing close to $100,000 a month.

“We are looking at the end of the line if this (situation) were to move forward for the next few months without any additional financial assistance or any lifting of restrictions,” Obrecht said.

“We try to stay optimistic. We're in the business of motivating people ... but it is stressful and it's very scary.”

Similarly, the tourism sector has been hammered by limitations on travel and public gatherings.

CalgaryWalks & Bus Tours has been shut down since mid-December and co-owner Judy Uwiera said revenues dried up as international travellers have stopped coming to the city.

She said the province's existing relaunch grant “helped us a little bit and kept us going for a few months, but I can't see that it's going to sustain us in the long run.

“I keep looking at where we are at and ... wondering if we are going to be here in a year from now,” Uwiera said.

Restaurants and bars have been also pummelled by the pandemic.

Alberta Hospitality Association president Ernie Tsu said last week's reopening helped the industry, but noted it comes with limited hours and rules that customers can only sit at tables with people from their own households.

The association had requested the province match government supports that are available in Ontario, including a rebate covering utilities and commercial property taxes.

“No, $10,000 isn't enough, but any money is welcomed money right now for the hospitality industry,” said Tsu, who owns Trolley 5 Brewpub.

While the government's new grant program will help, the ultimate solution will only arrive when COVID-19 vaccinations speed up and small businesses can fully reopen.

“The amount of support that the industry needs to survive, this is really dependent on when the restrictions are lifted and vaccinations happen,” said Mark von Schellwitz of Restaurants Canada.

“I know some of our members will not be happy with $10,000. Others will say, `well, this really helps, thank you very much.'”

Doug Schweitzer