Small businesses face troubling return to ‘normal’
Limited operations, lack of clarity on financial aid has owners considering staying shut
The co-owners of Coco Beauty Bar were ready to return to business once the Ontario government gave beauty salons a green light, but after seeing the strict COVID-19 restrictions required, they wonder if it’s even worth the effort.
No facials, no microblading, face waxing or threading. And the biggest financial hit: no lash extensions.
“Lash extensions are our moneymaker, and if we can’t do that we’re thinking, ‘What’s the sense of opening up?’ ” said Vesna Rosales, manager of the small business in Toronto’s Bloor West Village.
“We’re going to be losing like crazy. We won’t be able to pay full rent for July. There’s no way.”
Rosales and husband and business partner, Tim Heffernan, consulted the Toronto Public Health website, where he learned they can offer manicures and pedicures, as well as bikini and leg waxes. But he said that will only bring in about 30 per cent to 40 per cent of the usual revenue, at best.
So the couple, who are both in their 60s, broke the bad news to their staff in an email. Now, they’re now asking themselves some big questions about the future of a business they had already considered selling earlier this year, as they planned for retirement.
Much of their frustration can be traced back to federal and provincial governments who’ve bogged down press conferences with confusing messages, a flurry of staggered deadlines for financial and rent support and what many small businesses and commercial landlords have described as a total lack of clarity around COVID-19 financial support systems and how they apply.
Among the biggest complaints is the lack of co-ordination between the federal and provincial governments over the rollout of the Canada Emergency Commercial Rent Assistance program (CECRA) in May, which was meant to help small businesses keep from going under.
Tenancy laws fall under provincial jurisdiction, but it took weeks before there was official response to widespread complaints that some landlords refused to adopt the measures, choosing instead to kick out their commercial tenants. Some provinces introduced bans or restrictions on commercial evictions.
Ontario added itself to that group earlier this week with its temporary ban on evictions, which lasts until the end of August. But that’s two months after the current CECRA support program expires, creating more questions over whether the federal government intends to extend its support for entrepreneurs who are deeply hurting.
A new study released by Royal Bank of Canada found that small businesses accounted for 60 per cent of job losses in the first two months of the pandemic, twice as many as in the 2008-09 recession. Canadian Federation of Independent Business president Dan Kelly has called for broader financial support measures that last longer. He believes without a clear roadway to recovery, most business owners can only focus on short-term uncertainties.
“Everybody was of the view that if … (small businesses) were closed for a few months, government provided support, we reopened and the things would back to normal, no harm no foul. But unfortunately that’s not the world we’re living in,” he said.
More than 5,500 small business tenants were approved for CECRA as of June 8, according to data provided by the House of Commons finance committee on Thursday. Kelly suggests that figure is a “drop in the bucket” compared to the 400,000 to 500,000 businesses the CFIB estimates qualify for the program.
For the owners of Coco Beauty Bar, they’re still questioning their fate.