Small business is the foundation of economic recovery

Small-business owners are inherently hopeful and optimistic. Doors open with the hope customers will come through them. Projects are worked on, all the while hoping another project will be there at the end. In their collective minds, hard work and smart decisions will be rewarded.

At the best of times, running a small business can be challenging. Nowadays, however, it is nearly impossible. The latest Canadian Federation of Independent Business (CFIB) survey shows nearly a third of businesses in Newfoundland and Labrador are fully closed due to COVID-19. Sadly, it isn’t going to get any easier without meaningful help from the provincial government.

Many small-business owners across the province, in their private moments, would tell you how difficult it has been to run a business in the last six years or so.

But 2020 has been simply catastrophic, especially for those in the Northeast Avalon region. The states of emergency in January delivered the first big setback.

Still reeling, business owners were hit with the public health state of emergency two months later.

Clearly, COVID-19 is a very serious, threatening virus. The containment measures are necessary to slow the spread of the virus in the province.

Business owners accept this. But the economy has been hit hard. The economic repercussions, questions around the rebound of consumer spending, and cash flow issues are top-of-mind for business owners.

In response to the pandemic, the federal government has launched extraordinary support programs to help individuals and businesses through the pandemic. The provincial government has also announced a re-opening plan to come into effect on May 11.

But the costs of running a business — rent or mortgage payments, electricity, insurance, banking and the list goes on — still must be paid. Operating at reduced capacity for several weeks, and potentially months, owners have a many hard decisions to make to ensure their businesses stay afloat.

The pandemic has been a staggering blow to our small businesses. The economic effect of the COVID-19 pandemic is unique and unlike anything seen before. One can expect the economic recovery to be slow and arduous.

The government recognizes the plight of small businesses in the province.

Recently announced support for restaurants, bars, craft breweries, wineries and distilleries are definitely good news, but more needs to be done. For example, the provincial government should introduce a hardship grant for hard hit small businesses to cover rent and other fixed costs as has been done in Nova Scotia and Saskatchewan.

To recover from this pandemic, the provincial economy does not require stimulus, per se. It requires businesses being able to open safely for employees and customers, but also people need to feel safe to spend their money, ideally in local, independent businesses.

The solution is for the provincial government to provide support, financial or otherwise, to small businesses so they can invest in the longterm. Business owners need the ability to maintain their staff and find innovative, cost-effective ways to work in what will be a new environment.

Newfoundland and Labrador has to get to the end of this pandemic with much of its economic engine intact. Broad support for small businesses is the answer.

Vaughn Hammond CFIB director of provincial affairs, Newfoundland and Labrador