N.S. Businesses Not Ready To Give Up Pandemic Subsidies
HALIFAX — On July 4, the federal government began scaling back on two of the most important ways it gives financial support to businesses.
Through the Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy, the feds had been paying 75 percent of the cost of rent and employee wages to businesses impacted by the Covid-19 pandemic.
As the president of the Tourism Industry Association of Nova Scotia points out, the programs have been vital to keeping people employed and businesses from bankruptcy.
“Those programs have probably been the most important support that has been available to businesses in terms of keeping them afloat during the pandemic,” Darlene Grant Fiander told Huddle on July 27.
She guessed 30-40 percent of businesses in Nova Scotia would be gone right now if not for the CEWS and CERS.
But over the next two months, the government plans to gradually roll back that financial support, eventually eliminating it completely by the end of September.
That has many small business owners panicking.
Grant Fiander says many tourism-related businesses are still pulling in just a fraction of their pre-Covid businesses. Losing federal support could be devastating.
“In Nova Scotia, we lost $1.7-billion in revenue in 2020. So, the only thing [allowing] these businesses to keep the doors open has been those two programs,” she says.
Because of this, she and other industry advocates are calling on the federal government to extend the programs until the end of the year.
That extra help, she argues, will give businesses the liquidity to survive for the rest of the year and properly prepare for 2022, when tourism is expected to bounce back closer to pre-covid levels.
Meanwhile, the Canadian Federation of Independent Businesses is demanding even more extreme support from the feds.
The CFIB has just launched a petition asking the government to put the CEWS and CERS back to their June levels and extend the subsidies until “the economy is fully open.”
It’s also asking the feds to help businesses with debt relief by making a larger percentage of government loans forgivable and extending repayment terms past 2022 on CEBA loans.
According to the CFIB, only 35 percent of Canadian businesses have seen their sales return to normal.
“Small business owners are keen to replace subsidies with sales, but … it is just way too soon to phase out the wage and rent subsidies,” said CFIB president Dan Kelly.
Grant Fiander says she recognizes the government’s need to start reigning in spending. She says she’s OK if the feds stop offering subsidies to industries that don’t necessarily need it while continuing to focus on those that do.
She also says she’s not against adjusting the formula they use to calculate support, possibly even lowering the percentage if it makes sense.
However, she’s adamant that most businesses in the five key sectors within the tourism industry (transportation, accommodation, food and beverage, recreation and entertainment, and travel services) still need help.
“Tourism is at the center of this pandemic, and it will be at the center of the recovery. It creates jobs and economic activity and … is incredibly important to the cultural, social, environmental health of the country. So, we need to support it,” she says.
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