‘We can make payroll next week, but after that, it’s up in the air.’ Small-business owners say government aid is too little, too late.
|Toronto Star 19 Mar 2020 at 17:26|
Like all Canadians caught up in the COVID-19 crisis , Jason Fisher is worried. But in addition to worrying about his health, friends and loved ones, he’s also worried about whether he can pay his employees, his landlords and his contractors during the pandemic.
“We can make payroll next week, but after that, it’s up in the air,” said Fisher, who owns the Junction brewpub Indie Alehouse and its Eataly offshoot Birroteca. “We’re a cash-flow business and right now we have almost zero cash flow.”
Fisher employs 70 people, but has been forced to scale that back to eight to 10 after the province ordered the closing of bars and restaurants with the exception of takeout and delivery.
“We’ve got a few people brewing beer and running our retail shops, and in the kitchen so we can do takeout, but that’s it,” Fisher said.
Fisher and other small-business owners are frustrated by the slow pace and lack of details about financial aid as they struggle to deal with the economic fallout of the crisis.
Earlier this week, Prime Minister Justin Trudeau announced an $82-billion package designed to help workers and businesses weather the storm. Roughly $55 billion is in the form of tax breaks for businesses, while there will also be some direct lending, through the Business Development Bank of Canada and Export Development Canada.
There was also the offer of a three-month, 10 per cent wage subsidy up to a maximum of $1,375 per employee for a total of up to $25,000 per employer.
Fisher, who already had a $100,000 loan from BDC, isn’t sure if he’s eligible for more.
“I call and ask, and they say, ‘We’re discussing that in a conference call at 11.’ They’ve said the same thing for the last few days. The speech from Trudeau was great, the speech from (premier Doug) Ford was great, but there really weren’t any details. Now we need the details,” Fisher said.
Michelle Genttner, co-owner of west-end grocery store Unboxed Market, says while access to new loans and other government money could help small businesses, she’s concerned bigger companies might be more likely to get it.
“It depends on how easy it is to access. A lot of times, the application forms and websites are so complicated to navigate that a small-business owner just doesn’t have time, and ends up giving up. I’m sure large companies will be able to use it, because they’ve got more people and time,” said Genttner, whose store employs six people, including her partner, Luis Martins.
So far, the packaging-free store — which has stepped up its already-rigorous sanitation — has only seen a small drop in revenue, Genttner says.
“There’s been a bit of a drop. Some new people are coming in, because we don’t get the crush of people that bigger stores are getting. But some regulars are staying home, or doing pickup at the front door,” she said. Still, Genttner knows she and Martins are more fortunate than some businesses. Two years ago, they sold their College St. brewpub and restaurant, Folly Brewing.
“If we were still in the hospitality business, it would be terrifying right now,” she said.
The tax breaks, says Indie Alehouse’s Fisher, aren’t much immediate help.
“The tax deferrals might help six months from now, but I’ve got staff to pay, I’ve got banks to pay, I’ve got contractors to pay. If cheques start getting cashed April 1, we’re done,” said Fisher.
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The head of the country’s biggest small-business association worries that governments still haven’t quite grasped how severe the economic crisis has already become. Rather than just tax breaks and the speeding up and expansion of employment insurance, companies need direct access to financing now, says Dan Kelly, president of the Canadian Federation of Independent Business.
“They’ve done some things right. But I think what they’ve missed is that employers facing a giant cut in income are at the point of laying people off now. They need money fast,” Kelly said.
The wage subsidy doesn’t go nearly far enough, either, says Kelly, especially for small businesses whose revenue streams have dried up almost entirely.
“Ten per cent might help for a couple of weeks. We need something like Denmark, which has a 75 per cent wage subsidy. And we need it now,” Kelly said.