‘Unwilling and slow’: Advocates call on government to do better for small business

VANCOUVER (NEWS 1130) — Small business advocates are not backing down from demands to expand and improve government relief for the little guy, saying too many have been left out of federal programs and provinces need to step in.

The Canadian Federation of Independent Business (CFIB) is using an open letter to members of Parliament to put the pressure on, while another group, Save Small Business (SSB), is peppering the federal government with emails from its members, says SSB spokesperson Micheal Smith.

“Small business represents seven-in-10 jobs across Canada and creates nearly half of all GDP … Canadian small business is too big to fail,” says Smith.

So far, the federal government has announced three main channels of relief; an interest free loan, temporary rental abatement through the banks, and a wage subsidy program. Advocates are calling for expansions of all three.

CECRA needs a makeover. It works for some but too many left out. How about: 1) Allow tenants access to the 50% reduction w/o going through landlords 2) Allow businesses with a 20-70 percent revenue loss to use if they don't qualify for other fed program?

— CFIBideas (@CFIBideas) May 5, 2020

“Unfortunately, there remain far too many businesses unable to access (Canada Emergency Business Account) CEBA loans due to a requirement to demonstrate a 2019 payroll between $20,000 and $1.5 million,” says CFIB president, Dan Kelly.

“This cuts out those that pay with dividends (e.g. family businesses), those who pay contract workers (e.g. private gyms) and those who rent chairs to other independent business owners (e.g. hair salons).”

Kelly and the CFIB are asking the federal government that small firms be able to circumnavigate the 2019 payroll requirements and that Ottawa “allows those that have a personal bank account and brand new businesses that have at least $1,700 in payroll (or equivalent) in January and February 2020 to access the program.”

While the CFIB and SSB warn adding debt will only serve to sink businesses further into precariousness, they say if this is the only option available, then businesses should have access to $20,000 more for each month the shutdown continues..

“While the initial $40,000 loan was helpful, that money will quickly be spent if the current situation continues,” says the CFIB’s Corinne Pohlmann, senior vice-president of national affairs.

The group is also asking for an extension to the Canada Emergency Wage Subsidy (CEWS), which is scheduled to expire June 6. It is also asking to “extend the employer payroll tax rebate for all staff on payroll who come under CEWS and not just for those on furlough.”

Provinces could save the little guy

An SSB survey found that business owners say four of five landlords are unlikely to apply for Canada Emergency Commercial Rent Assistance (CECRA) on behalf of their tenants, even if the tenant qualifies.

CECRA is a forgivable loan for “eligible commercial property owners so that they can reduce the rent owed by their impacted small business tenants by at least 75% for the months of April, May and June, 2020,” according to the program website.

Smith says there’s little incentive for landlords, who may be planning to evict current tenants in order to charge a higher rate when the pandemic is over.

“Without a moratorium on commercial renovictions, there won’t be enough landlords that are willing to come to the table,” he says.

“Provinces are slow and unwilling to issue moratoriums (yet) even though New York State, Australia and various European countries did this more than a month ago!” says the open letter SSB has sent to MPs in Ottawa.

Clear guidelines & communication from #BCgov are absolutely needed for #bcbusiness as the province looks ahead to reopen parts of the economy. #SmallBiz https://t.co/L904kiH7X3

— CFIB BC (@cfibBC) May 1, 2020

“Small businesses have never needed their provincial governments’ support more than now. The federal government has funded a flawed program, but it could save thousands of businesses and millions of jobs if you act quickly to save it,” says an open letter sent on behalf of more than 39,000 members of SSB.

“It could prevent families from losing everything. It could ensure that we, your local community businesses, are there to help our economy recover from this crisis.”