SMALL BUSINESS GETS HELP, BUT IS IT TOO LATE?
‘If people don’t have jobs, a new outfit won’t be top of mind,’ says boutique co-owner
For Deb Patrick and Melanie Lablanc, news that the federal government would be providing a 75-per-cent wage subsidy for Canadian businesses hit by COVID-19 shutdowns came just in the nick of time.
The co-owners of Something2wear, a womenswear boutique in Aspen Glen Landing in southwest Calgary, were agonizing about whether they might have to lay off some of their 11 employees.
Prime Minister Justin Trudeau finally announced on Friday morning that the federal government was implementing a 75-per-cent wage subsidy program — something Alberta Premier Jason Kenney had been urging for two weeks, along with the Canadian Federation of Independent Business and the Chamber of Commerce.
But even with this new announcement, things are looking really grim for entrepreneurs like Patrick and Lablanc, as long as the doors remain closed, something these women did on March 19.
“We have zero income coming in and bills pending,” said Patrick, adding they received a large shipment of clothes and accessories in early March, and while their suppliers have extended their payment due date, it will be a miracle if they can make it.
“We’re not selling anything and we have a store full of product that we have to pay for. If we can’t open until the end of April, we’ll have lost six weeks of selling time,” said Patrick.
“For us, that’s huge because some of the product in the store was buy-now-wear-now, so folks won’t necessarily be looking for that product. And when we reopen, how quickly will our economy bounce back?” she wonders. “If people don’t have jobs, a new outfit won’t be top of mind.”
Their suppliers have closed and so have the manufacturers.
“It’s a very big circle. How will all of this affect our next season? We are probably going to be feeling the effects of this for the next two years as we try to catch up to this huge setback,” she said.
Partner Lablanc says they are in a better situation than many small businesses, since most of their employees “work for fun” on a part-time basis and are very understanding, whereas a couple of their employees rely on their wages to make a living.
So, how long can they survive without opening their doors?
“In light of the measures that are being put into place by the government, by our landlord — who has been excellent and so accommodating — and the vendors, three months with little or no income, we can probably hang by our fingernails, but we would need to see some revenues come in to just hobble along,” she said, as they race to set up an e-commerce site.
Dan Kelly, the president and CEO of the Canadian Federation of Independent Business, says while Friday’s announcement was at least one week too late for many employers, like for Patrick and Lablanc, it came just in time.
“I had a couple of messages from some of our members that they were going to initiate employee layoffs today,” he said, “but now they are going to hang on.”
Fully 60 per cent of all Canadians in the private sector are employed by small and medium-sized enterprises. It’s a vital part of the economy.
Kelly says in most recessions, like the fiscal crisis in 2008, large companies tend to feel the pain first.
“This is much more of a shock to Main Street than it is a shock to Bay Street,” explains Kelly because many small and medium businesses rely on face-to-face interactions with customers and cannot work remotely.
He adds that the CFIB did a survey of a representative sample of their 110,000 members and 30 per cent said they have only about one month before their business will close for good, if they must remain closed.
“It’s good for the business to hang onto their employees,” he said.
“There’s going to be a percentage of workers on EI who might say, ‘I’m going to take the summer off and look for work when my kids go back to school,’ whereas, if the connection is still there between the employer and the employee, that worker will come back to work, likely the very next day as soon as the emergency is over and Canada’s economic recovery will be so much faster,” added Kelly.
He says the last two weeks have been the toughest in his 26 years of working for the CFIB.
“We’ve had five calls this week from business owners talking about committing suicide. One of the worst calls I’ve ever had from a business owner came from a woman threatening to kill herself,” said Kelly, who added that instead of 50 weekly calls per week, their office is now receiving 800. “This woman opened a Chinese restaurant one week before COVID hit. She’s had no sales, she’s trying to do the right thing by paying her employees and paying off her debts, but now she’s left with $15 in her pocket with two children and a mortgage.”
Despite Friday’s positive, “albeit late” announcement, Kelly says there are many battles ahead.
There are indications the federal government will be moving ahead with a 50-per-cent increase to the federal carbon tax.
“That’s just nuts to me that the federal government would go down that road. Even the B.C. NDP has put their carbon tax increase on hold,” said Kelly.
Patrick and Lablanc, who won the Generosity of Spirit Award in 2017 for their many years of enthusiastic and generous philanthropy, say their spring fashion show to raise funds for Making Changes Employment Association of Alberta — that helps women obtain the skills and resources needed to pursue meaningful work and educational opportunities — may have to be cancelled or they may try to do it online.
“Thank heavens that both of our husbands still have their jobs,” said Patrick, who was in the shop taking photos of outfits to post onto their Instagram page and store website in an attempt to get some sales. Otherwise, she’s not sure how they would feed their families of two children each.
As for Patrick and Lablanc, they are trying to remain positive, hoping they reach their shop’s 10th anniversary in September.
Licia Corbella is a Postmedia columnist in Calgary.
We’ve had five calls this week from business owners talking about committing suicide.