‘Extremely scary': Business owners, workers concerned of COVID-19 subsidy wind-down

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‘Extremely scary’: Business owners, workers concerned of COVID-19 subsidy wind-down
© Provided by Global News Storefronts in Ottawa’s Glebe neighbourhood are reflected in a sign indicating the temporary closure of a business to prevent the spread of COVID-19, on Tuesday, March 24, 2020. A federal spending watchdog says a program aiming to providing rent relief to small and medium-sized businesses will cost just under $1 billion this fiscal year. THE CANADIAN PRESS/Justin Tang

With the federal government set to cancel a plethora of COVID-19 support programs on Saturday, business owners and employees say they’re worried over how they’re going to survive.

Programs like the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Rent Subsidy (CERS) and the Canada Recovery Benefit (CRB) are set to be replaced with new measures in their place.

Though Canada’s devastated tourism and service industry, still reeling from the COVID-19 pandemic, continues to recover, business owners and employees say that those lifelines are the only things keeping them afloat.

Aleksander Saiyan, the operations director for Toronto Dance Salsa, said that if he hadn’t made use of those programs, his dance studio would have been shut down.

“There’s no way we could have covered the rent, we would have went into a massive debt,” said Saiyan, who made use of the CRB for himself and other government programs for his business.

Dance studios, much like gyms and exercise spaces, were widely considered “grey areas” in what provincial governments decided to shut down during their pandemic-induced lockdowns.

While Ontario’s provincial government continues its gradual re-opening of the economy, including most recently an announcement of full capacity for gyms and restaurants set for this Monday, Saiyan said business is still just a fraction of what it was prior to the pandemic.

Video: Pandemic rent and wage subsidies coming to an end

Saiyan says the business is now just operating on little more than 30 per cent of the revenue it was earning pre-COVID, and that every “penny” and more that they’ve saved up in previous years has already gone forward to cover bills like rent, electricity and wages.

“So it is scary, extremely scary, and we wholeheartedly depend on this to recover,” said Saiyan. “And I’m hoping that in January, February, things will get better and we start to go to some kind of normal.”

In an announcement Thursday, Deputy Prime Minister and Finance Minister Chrystia Freeland said that new programs would be put in place to replace the pandemic measures.

The new Tourism and Hospitality Recovery Program and Hardest Hit Business Recovery Program are set to come into effect Sunday, according to Freeland.

In total, the government says it has paid out more than $95 billion to help employers through the wage subsidy, while its rent subsidy has helped over 210,000 businesses and organizations with $6.8 billion in support.

The CRB, which was formerly known as the Canada Emergency Response Benefit (CERB), will also be replaced by a more targeted program called the Canada Worker Lockdown Benefit (CWLB).

While the new programs are said to be more targeted to those that need them the most, many are concerned that it won’t be enough to keep them and their businesses afloat.

David Macdonald, a senior economist for the Canadian Centre for Policy Alternatives, wrote that as many 1.5 million people could be directly impacted by the replacement of those programs — most of whom won’t have another source of income or support.

Video: Uncertainty as Ottawa ends wage and rent subsidies

Of that number, about 900,000 workers would lose support from the CRB’s eligibility and income cut, while over 640,000 workers could see their jobs in jeopardy over the CERS and CEWS cuts.

“The real elephant in the room is CRB support for self-employed workers,” said Macdonald. “While several of the other programs have seen significant decline in take-up recently, the CRB has not.”

Those interested in the CRB’s replacement, the CWLB, would only be eligible for it once a province or city imposes a COVID-19 lockdown, Macdonald wrote.

“At this point, there doesn’t seem to be any place in Canada under lockdown and so there would be no one eligible for the CWLB at the time of writing.”

There are currently no provinces or cities in lockdown, but Freeland defended the new measures — adding that temporary local lockdowns were “still a possibility” in the months to come.

“Our emergency support measures were always designed to be temporary to get us through the crisis,” she said. “We’re now in a new phase, one that is very different from the darkest days in our fight against COVID. We have recovered lost jobs.”

Small business owners have previously called on the federal government to not stop COVID-19 benefits ahead of their expiration — calling it a lifeline for their livelihoods.

Rina Camarra, the manager of Mastro’s Restaurant in Toronto, told Global News in September that her business was on the wage subsidy program over the months-long pandemic.

“It’s not an easy task for us to run a business nowadays,” said Camarra.

“It helps us a lot because otherwise we just wouldn’t be able to keep the staff on if we had to cover that all ourselves. What we take in is not enough.”

Speaking on the Roy Green Show on Saturday, Dan Kelly, the president and CEO of the Canadian Federation of Independent Business, said that he sympathizes with the deputy prime minister’s “difficult job” — though he begged the question of whether or not the economy is truly ready for the rollback of subsidies.

“We’re already hearing from a large number of fairly panicked business owners,” said Kelly.

“Only 40 per cent of our members, small business owners, have got normal levels of sales at this stage.”

Saiyan said the government should not think that the daily number of COVID-19 cases reflect the reality of businesses and the support that they need.

“I think that if the government did a better job of being more compassionate towards the smaller guys, the small businesses — they really just make the biggest impact on our society, not the big box stores,” he said.

— With files from Global’s Aaron D’Andrea and Twinkle Ghosh

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