Several new small businesses that applied for the Ontario Small Business Support grant but were rejected were disappointed after hearing the news that other ineligible applicants received COVID-19 relief funds through the grant.
On Dec. 1, the province’s general auditor found that Ontario businesses that weren't eligible for pandemic relief programs received more than $200 million in provincial support, others were given more money than they lost and some hard-hit vendors were excluded altogether.
SilverFox Distillery in Arthur opened in February 2020 and has been struggling financially through the pandemic.
They started as a distillery but quickly pivoted to making hand sanitizers after the pandemic hit. Owners Mark and Lisa Townsend donated most of their hand sanitizer stock to frontline workers, hospitals and other primary care provider offices.
“We worked for 18 hours, seven days a week for five months to keep up with the needs of the community. Most of what we made was donated to frontline workers and hospitals and we were recognized by our MPP with a plaque on display at the distillery,” said Mark.
“So with huge financial losses in donated products, we thought we would be eligible for some relief but with all the grants being handed out, we still were not eligible for anything.”
The Townsends applied for the Ontario Small Business Support Grant in 2020 and spring of this year but were rejected both times as they were considered an ineligible business.
To be eligible, a business had to demonstrate they experienced a revenue decline of at least 20 per cent when comparing monthly revenue in April 2019 and April 2020.
The grant provided help to small businesses that were required to close or significantly restrict services under the province-wide shutdown.
However, Auditor General Bonnie Lysyk’s annual report reported that pandemic relief programs lacked clear goals and eligibility criteria was poorly defined, allowing thousands of ineligible businesses to receive funds.
Lisa explained that her business is considered an essential business as they are a liquor store.
“I’m just disappointed that other ineligible businesses received grants and we didn’t. I’m not saying it’s the businesses’ fault, but the government’s. They should have clearer criteria and stricter rules if they’re going to exclude new businesses. Everyone’s been hit very hard with the pandemic,” said Lisa.
In total, the distillery lost close to $100,000 in sales and donated sanitizer, and lost three year's worth of barrelled whisky and other liquor.
“This has been a hard hit on our small company that has a tax burden of 82 per cent on each bottle sold,” explained Mark.
“I’m not in any way complaining, we have accepted what has happened and would not change anything we did, it was a necessity to our community and fellow people. But they should have done it better.”
SilverFox Distillery is not the only new small business that has been hit hard with the pandemic. Village Pizzeria in Erin, a small pizza shop, opened its doors in March 2020 and was also rejected from receiving any grants from the province.
Scott Heard, owner of Village Pizzeria, noted that his small business went through the challenging cycle of hiring people and then letting go of people due to the provincial shutdowns.
“We want to keep the pizzeria open and running but we can’t do that without employees,” said Heard.
“It’s just frustrating to know that some businesses received funds and we didn’t. Everyone needs financial support especially now with the pandemic. They shouldn’t have restricted it and then still make the mistake of giving some out to ineligible businesses.”
A request for comment form MPP Ted Arnott's office was not immediately returned.
