With many facing capacity limits at what is often their busiest time of year, Thursday’s announcements of government programs to help small business owners comes as “welcomed relief,” says Shakiba Shayani, president of the Guelph Chamber of Commerce.
“We do have some concern around timelines and whether or not the extent of support from both levels of government will be sufficient to prevent a wave of closures or additional hardship,” she said, “but it is a good sign and we appreciate that governments are signalling that they’re mindful of the impact of restrictions on businesses right now.”
Aid announcements were made by both the provincial and federal governments.
Provincial officials released plans for the upcoming launch of the Ontario Business Costs Rebate Program and a six-month interest and penalty-free period to make payments for most provincially administered taxes.
Through the rebate program, eligible businesses will be able to recover up to half of their property taxes and energy costs during the current capacity restrictions, which came into effect on Dec. 19.
On that day most indoor settings saw a 50 per cent capacity limit imposed as a result of increasing COVID-19 case counts throughout the province.
An online application process is expected to be available in mid-January but the program is retroactive to the start of the latest capacity restrictions.
“Ontario businesses have already contributed so much to the province’s fight against COVID-19,” said Peter Bethlenfalvy, Minister of Finance, in a news release. “We recognize that these necessary capacity limits to reduce the transmission of the virus will impact businesses, and that’s why we are introducing these new supports, which will put money directly into the hands of business and free up their cash flows during this critical time.”
Examples of eligible businesses provided in the release are restaurants, smaller retail stores and gyms, though a full list will be available in mid-January.
Without full details, Shayani worries the program will leave business owners who rent, rather than lease or own their property, unable to participate because they don’t directly pay property taxes.
In terms of the six-month, penalty-free payments on most provincial taxes, that’s expected to help business owners to improve their cash flow to help during capacity restrictions.
That effort runs Jan. 1 through the end of June.
“Cash flow is a problem right now for many businesses,” said Shayani. “Any offset is going to help.”
While pleased to see the reprieve, the chamber would have preferred to see a grant program that offers an injection of cash now rather than simply push off payment of collected taxes for a few months.
“Deferred payments and loans are helpful, but they’re not long-term strategies,” Shaykani commented.
At the federal level, officials have expanded the definition of a “lockdown” so previously announced wage and rent programs will have an impact. The previous definition made it so one one qualified.
Businesses that face capacity limits of 50 per cent or more are now eligible for benefits through the Local Lockdown Program, with the revenue decline threshold lowered from 40 per cent to 25 per cent.
“We still need some clarity around the definition for eligibility,” said Shayani. “It’s not entirely clear who will get it.”
Also, employees who have lost between 50 and 75 per cent of their income as a direct result of capacity restrictions could qualify for the Canada Worker Lockdown Benefit, which would see them receive $300 per week in support.
“We still stand by the idea that the quickest way to economic recovery is by addressing the health recovery and meeting the pandemic crisis accordingly with what’s needed,” said Shayani, noting the “alarming” news about the Omicron variant and its high transmissibility have a negative impact on consumer confidence.
“Many businesses see the greatest increase in their revenue in the month of December, over the holiday season, so folks are definitely feeling disheartened.”
