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Local small business community believes it's too soon to end pandemic-related benefits

“It’s awful, it’s terrible, it’s too soon to reduce the subsidies," says one local businessman as Sunday's deadline looms
2020 05 26 GT – Rooted Downtown Guelph 46 The Wooly – TB 46
The Wooly Pub, owned by Court Desautels, has seen razor-thin margins as capacity levels are static. Troy Bridgeman/GuelphToday

A series of pandemic-related benefits introduced in 2020 to prop up small businesses are set to expire on Sunday, the same day Small Business Week wraps up. 

Unless the federal government takes action, the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) will expire on Oct. 23, leaving some local businesses scrambling as the province lingers on the outer edge of the third step in the provincial reopening process.

Shakiba Shayani president & CEO of the Guelph Chamber of Commerce, said CEWS and CERS were effective subsidies that supported many businesses.

“Ideally, however, these supports would have continued until after all COVID restrictions are lifted, especially for businesses in the hardest-hit sectors, such as retail, restaurant, tourism, personal services, who are still struggling and may have to continue to make difficult decisions,” said Shayani.

“We will push all levels of government to thoughtfully consider how their decisions impact businesses and their employees, and we continue to encourage people to shop and support local as much as possible.”

On July 30 the Canadian government announced an extension of the eligibility period for the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and Lockdown Support until Oct. 23.

According to the most up-to-date claims data from the government of Canada, CEWS has received 4,553,320 applications, of which 4,500,800 have been approved with the total value of approved subsidies at $95.18 billion.

CERS has received 1,767,810 applications, of which 1,720,320 have been approved with a price tag of $6.83 billion. 

“The continued rise in vaccination rates and the use of the vaccine verification tool will hopefully continue to increase consumer confidence. Additionally, the forthcoming exit from Step 3 of the reopening roadmap will also increase capacity limits; all of which will help businesses and mitigate the negative impacts of the end of subsidies,” said Shayani.

Indoor capacity requirements eased on Oct. 9 in many of the indoor settings where proof of vaccination is required, however, some sectors were left out of this equation with capacity caps still impeding operations.

In the event the pandemic-related benefits are not extended, some believe this could mean disaster for small businesses, particularly in the restaurant industry which could see 10,000 more restaurants across the country shutter their doors.

“It’s awful, it’s terrible, it’s too soon to reduce the subsidies, we’re not even at full capacity yet,” said president and Court Desautels, CEO of Guelph-based Neighbourhood Group of Companies and board member of Restaurants Canada.

A recent survey conducted by Restaurants Canada found eight out of 10 restaurants are currently scraping by with a profit margin of two per cent or less, while other restaurants are operating at a loss.

The survey also found seven out of 10 restaurant operators are still receiving pandemic-related benefits from the federal government.

“We’ve got about 30 per cent of operators that, right now if the subsidies are gone, will not make it,” said Desautels. “We’ve already seen 10,000 restaurants close across Canada, and we figure that number is going to double at least if this happens.”

Desautels said he has spent thousands of dollars to comply with the public health measures, including installing plexiglass and air purifiers, and this is the norm across the industry.

"These subsidies are designed not only to help people get through the pandemic, but to recover from all the losses and debt included by businesses, said Desautels. "I can tell you now, we definitely have not been covered from those losses."

At the same time as the slated end to the small business benefits, the Canada Recovery Benefit (CRB), income support to employed and self-employed individuals who are directly affected by COVID-19, is expected to expire.


Daniel Caudle

About the Author: Daniel Caudle

Daniel Caudle is a journalist who covers Guelph and area
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