By: Mike Anderson
We all agree these are unprecedented times that require drastic measures.
During the 2008-2009 financial crisis, the feds spent billions to support big businesses that were considered too big to fail.
Now it’s time to help small businesses shuttered by the COVID-19 pandemic.
While the feds are offering an emergency wage subsidy and interest-free loans, these measures are too late and exclude too many small businesses.
For the time being, the Canada Emergency Business Account will provide interest-free loans up to $40,000. However, these loans will be restricted to businesses with a payroll between $50,000 and $1 million, thereby excluding many mom-and-pop shops.
Besides, many small businesses can’t afford to take on more debt.
What they need immediately is a commercial rent subsidy, and a legal guarantee that they will not be evicted for not paying their rent.
The Canadian Federation of Independent Business (CFIB) is calling on the province to provide rent relief and certainty for commercial tenants and landlords.
Rent is one of the biggest month-to-month costs for a small business, and while 64 per cent of CFIB members surveyed were able to pay April’s rent, only 20 per cent have deferral agreements in place with their landlords, which doesn’t bode well for upcoming months.
“April rent was really tough, and many businesses will find May an absolute nightmare if things don’t change,” said Ryan Mallough, CFIB director of provincial affairs for Ontario.
“Ontario should move to reduce property taxes and introduce a rent subsidy for hard-hit businesses, like those forced to close by provincial essential services rules.”
The CFIB is recommending provincial hardship grants of $5,000 a month for “businesses provincial governments forced to fully or partially close and those affected by revenues losses.”
Ontario’s NDP opposition party has also called for a 75 per cent subsidy up to $10,000 per month in rent for small businesses.
While some may call this corporate welfare, extreme measures are required to prevent a wave of bankruptcies that will desolate small Ontario municipalities like Georgina.
Wage subsidies will not be effective if the employer is unable to stay in business.
It’s time to bail-out our small businesses that are so essential to our economy and community.