Small businesses fear bankruptcy
Entrepreneurs want government support due to impact of novel coronavirus
TORONTO — Entrepreneurs across the country worry they may have to shut down their companies because of the impact of the novel coronavirus — and they want the government to take action quickly.
“We keep hearing the government say we want to support everyone financially, but I am not really hearing much for small businesses like mine,” said holistic nutritional consultant Seanna Thomas, who runs a Toronto business called Hockey Snacks.
“If there was something that could be put in place for entrepreneurs, independently owned businesses, consultants or even parttime workers, who don’t have access to (employment insurance), it would be great if they could get support.”
Prime Minister Justin Trudeau said Tuesday that he expects to make a major announcement on economic actions tomorrow and hinted that it could include tax changes.
Thomas said a break on tax payments or rent and utility payments would be “excellent.”
She started her company three years ago after she wandered into her son’s dressing room at a hockey practice around 8 a.m. and found him munching Doritos — a snack another parent had provided as part of the team’s rotation.
She’s not staunch about stopping her kids from eating a junky snack every so often, but felt the players could have something healthier to munch on, so she took over snack duty for the season and built a business, doing the same for other teams and tournaments.
The company was doing well until COVID-19 hit right in the middle of a busy hockey season.
“I watched all of my events and workshops and deliveries be cancelled for the next few months, day by day. I am worried about the things I have for May and June,” she said.
“There is no more hockey, so I have to refund clients currently getting deliveries from me.”
By the time recreational activities resume, the hockey season may be over and the traction she built through previous seasons gone.
A quarter of Canada’s small businesses say they would not be able to survive for more than a month if they experience a drop in income of more than 50%, said a Canadian Federation of Independent Business survey of 8,730 companies across the country conducted online between March 13 and 16.
The survey, released Tuesday, found about half of Canada’s small businesses have already seen a drop in sales due to the economic effects of COVID-19.
About 43% of those small businesses have reduced staff hours, 20% have begun temporary layoffs and 38% have experienced supply chain issues.
For Marlee Rabin, the owner of Montreal-based designer dress rental company Ocurent, the outbreak could not have come at a worse time, especially since the start of the year is already its slow season.
Prom and gala season is around the corner, but no one is renting dresses now that the government is cautioning people against going to large gatherings and pushing organizers to cancel.
“I am exiting a quiet season and entering another quiet season,” said Rabin, who has had to suspend rentals.
“I am really focusing my energy on trying to live really lean as a business so we can hang tight.”
Dan Kelly, the president of the CFIB, which represents 110,000 small and medium businesses across the country, said the early economic impacts of COVID-19 have been massive for small and medium businesses.
“Many are bracing themselves and feeling like this is just the beginning of it,” Kelly said.
To reverse those impacts, 91% of those who responded to the CFIB survey want direct financial support from the government.
About 70% are calling for temporary tax relief on income, payroll and sales taxes, 66% want planned tax increases to be cancelled, and 65% are asking for a delay in tax filing deadlines and the elimination of penalties for late payments and remittance.
Another 58% believe wage subsidies for businesses to retain staff could help, while 46% want the government to create incentives to boost consumer spending.
The Greater Victoria Chamber of Commerce in B.C. sent a letter to federal and provincial politicians including Trudeau on Tuesday seeking no late fees and instalment interest on balances being owed to the government until COVID-19 is under control.
The chamber also suggested adding some flexibility around when taxes must be paid by and upping access to interest-free loans.
We keep hearing the government say we want to support everyone financially, but I am not really hearing much for small businesses like mine.