Small business seeking more support from feds
Concerns flagged about some companies falling through cracks amid shutdowns
OTTAWA Prime Minister Justin Trudeau took another step to broaden the government’s support for small businesses, but advocates say there are still cracks in the program and companies are falling through them.
Trudeau announced a small change to the government’s emergency loan program Tuesday.
The Canada Emergency Business Account (CEBA), is a $40,000 no-interest loan and was one of the Liberals’ first policies for small businesses dealing with the drop in sales for COVID-19.
But it required businesses to have a payroll and a business bank account.
Dan Kelly, president of the Canadian Federation of Independent Businesses, said that left out businesses that dealt with independent contractors, such as salon owners or gyms with personal trainers. It also cut off family run businesses in which members are paid through a dividend.
“It was just deeply unfair, because many of these businesses were just absolutely gutted by, or have been gutted by the effects of COVID -19,” said Kelly.
In addition to being interest-free, 25 per cent of the loan is forgivable if borrowers repay it before the end of 2022.
Trudeau said he heard that concern from businesses and the government wants to address it.
“Businesses like yours are the backbone of our economy and the life blood of our communities, and whether it’s with the CEBA or the expanded wage subsidy, we’re in your corner,” he said.
Many small business owners use a personal banking account, instead of a business one and had previously been ineligible for the loan as a result. Trudeau said they were also looking to find a way to address that problem.
Conservatives have been calling for the change for weeks, the party’s small business critic, MP James Cumming said the news is welcome, but the government should have made these moves weeks ago.
“We are pleased that they finally heard that a lot of businesses were being left out.”
Cumming said the government has to move faster with businesses, which have now been dealing with a prolonged economic shutdown. He said it’s not enough for the government to simply announce a new initiative; they need to be able to provide details quickly.
“I wish these things would come out quicker, because business can’t operate on a hope clause — they need certainty.”
Trudeau has also announced a wage subsidy program and a commercial rent relief program. Last week, he announced changes to the wage subsidy as well as an extension of the program into the end of August.
Kelly said the federal government’s efforts overall have been strong, but there were a lot of gaps when they were first announced and that led to businesses walking away for good.
“I have a growing list of businesses that have already thrown in the towel and in some cases, it’s as a result of several of the programs that they’re ineligible for.”
Kelly said the wage subsidy and credit programs needed and have received tweaks, but the government would be best to start over on its commercial rent relief program.
If landlords apply for the program, the provincial and federal governments provide 50 per cent of a small business’ rent, with the tenant covering 25 per cent and the landlord taking a 25-per-cent haircut to cover the remainder.
Kelly said many landlords aren’t interested in applying, leaving small businesses without the support.
“We have a rent subsidy that’s desperately needed for businesses that have been shut down as a result of this, but it is inaccessible to them because their landlord is choosing not to participate.”
Provincial governments have the constitutional authority over rent agreements and Kelly said they should be stepping up to the table with bans or restrictions on evictions.
“The feds have been actually doing far more in economic support for small business through the whole emergency than provincial governments have.”
He said all levels of government and landlords need to step up to the table on this issue and they need to do it soon, before June 1 payments are due.
“There’s a game of chicken being played between the federal government, the provincial governments and the landlords. And unfortunately, the victim in all of this is that small business tenant.”
I wish these things would come out quicker, because business can’t operate on a hope clause — they need certainty.