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Governments called on for well-communicated strategy to build consumer confidence

If the Manitoba government was able to ask businesses to close up their shops, then they should be ready to ask residents to help kickstart the economy as it slowly reopens, commerce stakeholders believe.

“Ultimately, public health is going to determine when that’s appropriate. But you can’t have businesses reopening on one hand, saying that’s OK, and telling people you still have to stay home — those are very conflicting messages,” said Jonathan Alward, Prairies director for the Canadian Federation of Independent Business.

“We need a very clear understanding of what ‘normal’ looks like,” Chuck Davidson, president of the Manitoba Chambers of Commerce, told the Free Press. “The government needs to answer what exactly their business plan is, as we inch forward to immunization.”

On Monday, CFIB released a sobering set of statistics for small business recovery one year into the COVID-19 pandemic.

Only 65 per cent of small businesses are fully open in Manitoba, 43 per cent are fully staffed and 32 per cent are making normal sales, as of this month. Those numbers are on par with the national average.

As a result, many business owners are delaying retirement, grappling with mounting debt or facing mental burnout. And they’re leaping into e-commerce at an “unprecedented pace or getting out of the game entirely,” suggests CFIB’s year-end report.

Four in 10 businesses say it will be at least a year from now, if not more, until they expect to see normal profits. Meanwhile, one in six businesses — potentially 239,000 across Canada and nearly 5,601 in Manitoba — are at the risk of permanently disappearing because of COVID-19, or have already closed.

Stakeholders are now advocating for the provincial and federal governments to switch up or clarify their messaging around consumerism. They’re also asking for an extension to emergency support programs for businesses, with a well-communicated strategy in place about what comes next.

Davidson said “shaping up and building consumer confidence” continues to be the key for alleviating pandemic-induced economic downfalls.

“I think there’s going to have to be an active role and change in pace from the government about that,” Alward added. “Otherwise, we will continue to see a consumer confidence problem for much, much longer.”

In a statement to the Free Press, on behalf of Finance Minister Scott Fielding, a provincial spokeswoman pointed to “broad-based programs” such as the $5,000-a-pop Manitoba Bridge Grant. She also mentioned the $5 million Dine-in Restaurant Relief Program, which has received 500 applications so far, as a means to support small businesses.

“As we carefully and gradually reopen the economy, Manitoba’s labour market is rebounding,” the spokeswoman wrote Monday, citing recent numbers from Statistics Canada which show the province is now the second-lowest in unemployment.

“We have regular dialogue with stakeholders and have acted on recommendations... such as the #ShopLocalMB campaign to encourage Manitobans to safely shop at local businesses. We hope to announce additional targeted measures for specific sectors in the near future.”

But while the government is still waiting to announce measures or lay out specific economic plans for the future, Alward said businesses continue to dip into their remaining savings, and their burnout is only worsening.

Two-fifths of small business owners are delaying their retirement because of the pandemic, CFIB numbers suggest. While many owners rely on the sale of their business to finance their retirement, 55 per cent said the value of their storefronts has also dropped after months of restrictions.

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On top of that, the average independent business is now more than $170,000 in debt. Three-quarters (76 per cent) of them say it will take over a year to repay their dues, and 11 per cent fear they may never be able to repay it.

“Resolving all of this won’t be the turn of a switch,” said Davidson. “The clearer communication needs to start now.”
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