Pandemic rules hit small business hard, survey finds

Small businesses have been hardest hit by the collective measures to combat the COVID-19 pandemic, according to a survey by the Toronto Region Board of Trade released Tuesday.

Most businesses in the city have been hurt by social distancing — 67 per cent said they had reduced or closed their operations, or were considering doing so, even before the provincial government ordered non-essential businesses to close — but small businesses have suffered the most, according to the board’s survey of 227 small, medium and large businesses, conducted last Wednesday and Thursday.

Small businesses, defined as those with less than $2 million in revenue, are more likely to have laid off staff, struggled to make payroll, or forced to close — and are twice as likely as large businesses to be forced to refinance in order to stay afloat, according to the survey. Supply-chain issues, meanwhile, are a bigger concern for larger businesses.

Jan De Silva, president and CEO of the Toronto Region Board of Trade, said in a statement that the survey results show the city’s business community needs help.

“The health and safety of our region’s businesses and citizens is of the utmost importance, and we are grateful to governments — at all levels — who are working around the clock to ensure access to basic services,” she said. “We also recognize that ensuring that our business community has the tools it needs to navigate these turbulent times will mitigate economic uncertainties felt by many.”

De Silva welcomed the government initiatives announced in last week’s $82-billion stimulus package, but she said businesses need more.

The board called on Ottawa to suspend the collection of GST/ HST remittances until September and “reduce, eliminate or defer” electricity and natural-gas costs for small businesses while emergency measures are in place. They also recommended that the government offer a 50per-cent tax break on rental income to landlords who allow tenants to reduce their rent for a corresponding period.

Aseparate report by the Canadian Federation of Independent Businesses, which surveyed more than 11,000 small businesses across the country, found that nearly a third of them will not survive another month without additional government support. “While governments are working hard on the health emergency created by COVID-19, much more needs to be done to address the related economic emergency,” CFIB president Dan Kelly said in a statement. “It is essential that governments move quickly to safeguard local jobs and our economy by putting in place measures that will allow businesses to survive these unprecedented circumstances.”

The average cost of coronavirus-related disruption to small businesses is $136,000, according to the CFIB survey. A quarter of respondents said they had laid off all their staff, and more than one-third said their revenues had declined by at least 75 per cent since the start of the COVID-19 outbreak. Like the Toronto Region Board of Trade, the CFIB is also calling for a substantial increase to the government wage subsidy — 75 per cent of an employee’s wages, capped at $5,000.

The CFIB also called for immediate relief by deferring sales taxes, forgiving the payment of income, sales and payroll taxes for the next three months for the hardest-hit businesses, delaying the upcoming carbon tax and CPP increases, and delaying all filing deadlines.