Province expands COVID-19 safety net for ailing businesses
But paperwork, business recovery plan and tight time frame seen as big hurdles
Restaurateur Hassib Sarwari expects his South Surrey Afghan Kitchen won't be eligible for key provincial funding for COVID-affected businesses, even though the government has loosened requirements for the program.
On Monday, Jobs, Economic Recovery and Innovation Minister Ravi Kahlon announced changes to the $300-million Small and Medium Business Recovery Grant program launched Oct. 9, reducing the threshold for losses that businesses must show, and eliminating some of requirements for specific documents.
“The announcement, I mean, it might be great for some businesses, but again, it's so complicated for small businesses during these challenging times,” said Sarwari, who owns the family-run business.
The program offers non-repayable grants up to $30,000, or $45,000 to hard-hit tourism businesses, and Kahlon introduced changes designed to streamline the eligibility requirements.
Qualifying businesses must have been in business for 18 months at the time of application, which is a reduction from three years when the program was launched, and show a 30 per cent reduction in revenue since May over the previous year, down from a 50 per cent threshold.
The application also dropped requirements to list remittance accounts, registration numbers for GST, provincial sales tax and WorkSafeBC, but still requires businesses to submit business-recovery plans completed with the help of professional service providers, which the province will also pay for.
That is still a lot of paperwork, Sarwari said. “And then the deadline is March 31. Is that even giving enough time to gather the information and apply?”
While the requirement to show lost revenue since May was lowered, the program still assumes applicants lost at least 70 per cent of their revenue in March and April, Sarwari said, a level his business didn't meet.
Surrey Board of Trade CEO Anita Huberman said the top complaint she has been hearing was that businesses couldn't meet the previous eligibility requirements. So she applauded Monday's changes, which she had advocated for as part of the premier's Economic Recovery Council.
“For the newer businesses, for example, (those that have) been in business for six months or eight months or a year, they're going to have to go through some of these eligibility changes, and some will still be ineligible,” Huberman said. “But it's a step in the right direction.”
New businesses in particular, those that started during the pandemic, have fallen through the various safety-net programs because they can't show prior-year sales or payroll figures required to qualify for the federal Canada Emergency Business Account or Canada Emergency Wage Subsidy.
Kahlon said the time-in-business requirement will be 18 months from the time of application, including those that apply right up to the program's end in 2021.
“This is going to make a huge difference for many businesses,” Kahlon said. “And so, we're going to continue to have conversations with the stakeholders in the different sectors to find ways to support as many businesses as we can.”
To date, Kahlon's ministry has received some 1,500 applications for the business recovery grant, but he did not confirm how many have been approved or for what amount of the program's $300-million total.
The changes mean little to Cold Tea, a new restaurant at Granville and Davie in downtown Vancouver, which opened March 16.
“We still need to have been operating nine months before the pandemic,” said Ron Cheng, a partner in the business.
At the federal level, Minister of Economic Development Melanie Joly acknowledged that government needs to do more.
“Clearly, we hear that we need to be there for businesses that have just started,” said Joly, whose portfolio includes Western Economic Diversification. “So that's exactly the mandate of the regional development agencies right now,” with $500 million in additional funding in the federal government's fall economic statement.
Western Economic Diversification assistance has come in the form of partially forgivable Regional Relief and Recovery Fund loans up to $40,000 to help cover overhead. Joly said Western Economic Diversification distributed $333 million in COVID supports to some 6,100 businesses across the West, preserving or creating at least 25,000 jobs. In total, it committed $433 million to save or create 26,000 jobs.
“What we've done during this economic crisis is we've become the microcredit network of Canada,” Joly said. “Because a lot of financial institutions didn't want to lend to people that we decided to support.”
In B.C., business advocates are continuing to advocate for new businesses to be included in such programs.
“All of that is positive news,” said Annie Dormuth, Alberta provincial affairs director for the Canadian Federation of Independent Business, about the changes in B.C.'s grant program.
“This is something that we've been calling on the Alberta government to change as well — to introduce some sort of mechanism to compare different revenues or some sort of way to allow new businesses to apply for this.”