Firms that opened in 2020 feel they were hung out to dry
Many ineligible for such relief programs as wage and rent subsidies, loan plan
When Shaunt Tchakmak signed a lease for his new bar and live venue on Kensington Avenue in January 2020, he had no way of knowing that his business would be forced to close a week before its planned grand opening.
“It was a tough pill to swallow,” he said.
In many ways, Tchakmak has been fortunate since March — his landlord was fair and collaborative during the first lockdown, he said, and the Oud & the Fuzz has plenty of outdoor space, making the 2020 patio season a successful one, once he was able to open his doors.
But as winter approached, and with it talk of a total lockdown, Tchakmak hoped the federal and provincial relief programs would be there to catch him. They weren’t.
Tchakmak called the Canada Revenue Agency the day the Toronto lockdown began, he said. That’s when he realized that because he was operating a new business, he couldn’t access any of the federal benefit programs, such as the wage subsidy or the loan program.
He started a petition in November to
try and call attention to this gap. But today, Tchakmak is in the same situation he was when the lockdown began in November.
“I’ve been left completely high and dry,” he said.
Tchakmak is one of “thousands and thousands” of business owners who started their business during the pandemic, said Dan Kelly, president and CEO of the Canadian Federation of Independent Business ( CFIB).
Since the beginning of the pandemic, the CFIB has been trying to raise awareness of the various gaps in federal and provincial benefits for businesses, said Kelly. For example, the rent subsidy was the source of much criticism because it originally required landlords to apply, which proved to be a barrier for many tenants. That subsidy has since been replaced.
But some gaps remain, said Kelly, and this is one of them — businesses that started during the pandemic are often not eligible for federal or provincial COVID- 19 relief programs.
There are three reasons businesses in this situation have been denied, said Kelly.
Some of the programs required a 2019 tax return, he said, which a new business obviously doesn’t have. The new rent subsidy program and the wage subsidy program allow businesses to compare their revenues to January and February 2020 instead of 2019, but businesses that opened after March 2020 still don’t qualify, added Kelly.
Others, like the Canada Emergency Business Account, ask for a business number that existed prior to March 2020. And still others require sales figures from the prior year in order to calculate the decline in sales, Kelly said.
“We’ve been pushing and advocating strongly … that excluding new businesses is really foolish government policy,” he said, adding that new businesses will be an important source of jobs that will aid in the economic recovery from COVID19.
Robert Johnston is another Ontarian whose business plans were interrupted by the pandemic. He and his partners Dan Connerty and Connor Panas started National Recruiters for Sport in June but weren’t able to open until November. Meanwhile, they have spent around $ 400,000 on opening the business, but the only COVID- 19 relief program they have been able to access is the municipal program for commercial hydro bills.
Johnston knows they are not alone, and is looking into launching a class- action lawsuit on behalf of all businesses in this position, in the hopes that it will get the attention of the federal and provincial governments.
“We’re just feeling incredibly slighted,” he said.
For those in Ontario, the provincewide lockdown has made financial support even more important for small businesses.
Mid- December, the Ontario government announced the Ontario Small Business Support Grant, a one- time grant of between $ 10,000 and $ 20,000 aimed at small businesses affected by the province- wide lockdown. The grant requires businesses to prove their decreased revenue by comparing April 2019 and April 2020.
According to the announcement, eligibility criteria for small businesses not in operation in April 2019 or April 2020 will be announced in January. The applications for the grant are also set to open in January.
Ministry of Finance spokesperson Emily Hogeveen assured the Star that small businesses that opened after March 2020 will not be excluded from the program and will be able to receive the grant as long as they meet the criteria.
Tchakmak said accessing this grant would make a big difference for his business, but without details on eligibility for new businesses, he doesn’t want to count on it just yet.
The CFIB’s Kelly said new businesses are among the most vulnerable right now, and have usually been in the works since before the pandemic, making it difficult for business owners to give up on their plans.
He said the CFIB has been talking to Minister of Finance Chrystia Freeland’s office and he feels optimistic that the issue is getting more attention.
“I’ve had regular conversations with ( Freeland), urging her to take action. I know the government is at least looking at this area,” he said.
Tchakmak said he too has heard from Freeland’s office, and has been told they’re working on a solution. But he’s frustrated that so much time has passed without concrete answers.
“I would really love for some sort of public announcement to be made about them working on this,” he said.
Freeland’s press secretary Katherine Cuplinskas said in an email that the government “continues to actively assess our support measures to ensure businesses and workers have the support they need.”
“Our top priority remains supporting Canadians and businesses as we weather the COVID19 pandemic. That is why we have introduced targeted support to help hard- hit businesses and other organizations experiencing a drop in revenue.”