During the pandemic, small businesses have been relying, largely, on federal government programs to survive. Programs such as CERB, the wage subsidy, rent subsidy, and interest-free loans have all been vital to the economy over the past year. By comparison, provincial programs have been far less ambitious.
Back in May, The Canadian Federation of Independent Business (CFIB) called out provinces across Canada for their lack of support.
“After more than a year of lockdowns and restrictions, small businesses have amassed dizzying levels of debt and the relief provinces have provided doesn’t even scratch the surface,” said CFIB president Dan Kelly said. “In some cases, the programs have closed down, even as businesses are forced to shutter their doors once again, with no certainty of when they might reopen. It’s a really unfair situation.”
Louis-Philippe Gauthier, Senior Director, Legislative Affairs, Atlantic, says New Brunswick and Nova Scotia could have done a lot more through their support programs over the past year.
One of his main criticisms has been the scope of the small business impact grants in both provinces. Until recently, both provinces only offered the $5,000-max benefit to businesses forced closed by public health order. CFIB argues the grant should be available to all businesses that suffered during the lockdowns.
“Some governments, unfortunately, have taken the point of view that they would only offer support in the context of when a business is ordered closed,” said Gauthier. “Our argument is the programs should be generalized; if a business is suffering from reduced revenues…they should still be able to access those funds.”
Recently, however, according to Gauthier, New Brunswick has opened its program to include more businesses affected by the pandemic, which Gauthier applauds.
“It’s a move in the right direction, there is still the question of certain criteria that should be looked at. And, again, $5,000 for some businesses won’t be enough.”
Gauthier also gave credit to Nova Scotia for reoffering the $5,000 grant recently to small businesses ordered closed during the recent wave of Covid-19. He still criticizes the province, however, for only giving the money to businesses shut down by government order, and not handing out the money more broadly.
As Gauthier kept alluding to, many businesses have been critical of the amount of money the provinces have offered to support small businesses. Huddle recently profiled two businesses that lost between $60,000 and $75,000 each between April and June during the lockdown. For them, and many other businesses, $5,000 barely scrapes the losses.
“Compared to a month ago…we’re very satisfied to see the program receive additional funding…there are still some businesses where it’s still not enough, and that’s something the government should consider,” said Gauthier.
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“Based on the comments we’re getting from our members, for some, the amount that’s been put forward… is lacking.”
Ever since the CFIB released their scathing report in May, Gauthier is willing to say the supports in New Brunswick and Nova Scotia are now “slightly better,” but has much room for improvement.
“I would say the situation is slightly better,” he said. “At least the programs are now in place and/or have been Bonafede-in the case of Nova Scotia. In New Brunswick, it could be a bit more generous for those that need more help. And, In Nova Scotia, it’s a question of making it as inclusive as possible.”
The CFIB is also warning governments that newer programs cannot be in the form of loans. The federal government, in 2020, created the CEBA interest-free loan program. Businesses can access up to $60,000 through this loan program. Small businesses have also been using their credit cards more than ever to stay afloat. Because of this, argues Gauthier, the government must focus all programs on grants instead of more debt.
“Small businesses are tapped out when it comes to adding more debt to their books,” he said.
“If you’re going to bring support, as you should, to small businesses, it should be in grant format. Small businesses just can’t take more loans at this point on their books.”
Derek Montague is a reporter with Huddle, an Acadia Broadcasting content partner.
