MONTREAL ― A quarter of Canada’s small and medium-sized businesses won’t be able to make rent on the first of the month this Wednesday, according to a survey from an industry group.
The Canadian Federation of Independent Business (CFIB), which represents 110,000 privately owned businesses across the country, surveyed nearly 10,000 of those companies over the weekend, and found only one in five is still fully open for business.
Forty-two per cent said they are worried about having to close their business permanently.
Watch: Trudeau reveals more details behind COVID-19 wage subsidy program. Story continues below.
Statistics Canada defines a small or medium-sized business as having fewer than 500 employees, but some CFIB members are larger ― the only standard for membership is that it be a privately owned company not traded on stock markets.
The CFIB is calling on provincial governments to offer eviction protection for commercial tenants, in much the same way British Columbia and Ontario enacted residential tenants protections.
It’s also asking provinces for property tax relief in the form of a 25-per-cent reduction in the amounts owed. This lower tax rate would be in place for the duration of the crisis.
The federal government announced last week that it is increasing its wage subsidy for businesses impacted by COVID-19 to 75 per cent of wages, back-dated to March 15.
CFIB executive president Laura Jones believes that this move may have prevented many layoffs.
“We heard right away from businesses saying ‘We were thinking of laying off, but now we’re holding off,’” Jones told HuffPost Canada.
The federal government was expected to announce Monday which businesses will qualify for the wage subsidy. There is some concern that some businesses will be passed over because of the nature of their product. For example, the Business Credit Availability Program has been criticized for not allowing bars and cannabis retailers ― some of the hardest-hit companies ― to access funds.
“The devil is in the detail, and the concern is, are we doing enough to help those businesses that are hardest hit and may have trouble getting a loan?” Jones asked.
“The last thing you want is a nail salon owner going to the bank and hearing ‘Sorry, you’re not eligible for this money.’ That’s no help at all.”
The CFIB is calling for the government to loosen the rules for borrowing through the fund. Currently a business has to borrow $40,000 in order to qualify for $10,000 in loan forgiveness. The CFIB want businesses to draw up to $10,000 in forgiven loans without borrowing the full $40,000.
But in the meantime, the rent is due Wednesday. The CFIB is calling for landlords and tenants to stay in touch, and to work together to come up with solutions.
“We’re hearing some examples of tenants coming to landlords and saying ‘I’m struggling,’ and they are working something out. We are encouraging that. Protecting livelihoods is gonna be a group effort. We’re all going to have to step up.”