Canadian business owners and advocates say the expiry of federal COVID-19 benefit programs this weekend comes too soon. They argue uncertainty about future pandemic waves remains high.
As of Saturday, all of the most recent supports announced last fall, including the targeted wage and rent subsidy programs and the $300-per-week Canada Worker Lockdown Benefit, are no longer available despite what owners say is still an urgent need.
“The supports have been the only reason I’m open still,” said Summer Baird, owner of the Hintonburg Public House restaurant and bar in Ottawa.
“With every new wave or new variant, there’s a lot of uncertainty, because they’re telling everyone to stay home and only go out if they need to still. And yet we’re expected to be open fully and run a normal business, which doesn’t really make much sense to me.”
Although restrictions on dining out have been mostly lifted in Ontario and every other province, Baird says her sales remain between 40 and 60 per cent of what she was pulling in before the pandemic.
Many people remain uncomfortable about eating indoors, so she is looking forward to opening up the patio to boost sales. But she says she’s still facing staffing issues and high food costs due to inflation.
The loss of the subsidies means Baird will consider breaking even a victory.
“I wish they would extend them a few more months,” she said. “The comfort level (of people eating inside) still isn’t there.
“I don’t think that the government really understands that … I mean, they do have to cut the cord at some point, and I can appreciate that, but I don’t think we’re there yet.”
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The federal government was explicit when it launched the latest subsidy programs in October. They would expire on May 7.
Those programs, the Tourism and Hospitality Recovery Program and Hardest Hit Business Recovery Program, were created to be more targeted replacements for the broader Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) introduced soon after the pandemic sparked widespread lockdowns in early 2020.
Those earlier programs involved government pay outs of more than $100 billion to businesses to help with wages, rent, mortgages and other expenses. An additional $7.4 billion was allocated for the replacement programs.
Saturday was also the final day of other programs that were extended in October, including the Canada Recovery Sickness Benefit, the Canada Recovery Caregiving Benefit and the Canada Recovery Hiring Program.
Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), says 60 per cent of businesses are still making less than they were before the pandemic. The average small business is also saddled with $160,000 in new debt from the past two years, which he says can only be repaid by higher profits.
“Yes, customers are starting to come back. The roads are busier once again. The parking lots are starting to fill up,” he said. “But businesses don’t have to just get back to normal levels of revenue … they actually have to earn more profit than they did pre-pandemic to be able to get rid of (the debt).”
He says the CFIB estimates that 180,000 businesses — one in six across the country — will close for good due to the damage suffered during the pandemic without further financial help. Close to 100,000 have already shut down over the past two years, he adds.
“Governments have an opportunity to help us get through to the other side of this,” he said.
“It’s great news that most Canadian businesses are now open and most COVID restrictions are gone. That’s wonderful. But we’re not through this yet.”
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In a statement, a spokesperson for the office of Deputy Prime Minister and Finance Minister Chrystia Freeland said the benefits are no longer needed due to Canada’s economic recovery.
As of April, according to the statement, 115 per cent of jobs lost during the pandemic have been recovered — compared to 95 per cent in the U.S. Real GDP is more than one per cent higher than it was pre-pandemic.
Canada’s unemployment rate is now at 5.2 per cent, the lowest number in five decades, but still higher than half the countries in the G7, including the U.S., United Kingdom and Japan.
“With our economy in this position, the time for extraordinary COVID support is now over,” spokesperson Adrienne Vaupshas said.
Other benefit programs remain in place to help businesses long-term, including the $700-million Canada Jobs and Growth Fund, the $500-million Tourism Relief Fund and the $4-billion Canada Digital Adoption program to help get businesses online.
But Kelly says those programs will not help businesses immediately the way the COVID-specific supports have.
He says Ottawa should forgive a larger chunk of the interest-free loans that businesses obtained through the federal government’s Canada Emergency Business Account. They are due for repayment by the end of this year.
Baird says she’s hopeful the government will step in and reintroduce the support programs or offer similar help if another wave of the pandemic forces provinces to reintroduce restrictions.
“Otherwise, I just need to keep trying to come up with creative ways to stay open and build up people’s comfort levels in my space,” she said.
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