Advertisement
Advertisement

“Absolutely Terrible News”: Ontario Lockdown to Push More Businesses Into Bankruptcy: Interviews

Retail industry news delivered directly to you. Subscribe to Retail-Insider.

The announcement Monday of the return to various lockdown measures in Ontario in response to the growing spread of the Omicron variant will push many small businesses to close their doors in the province as they won’t be able to endure another loss of revenue during the ongoing COVID-19 pandemic.

Dan Kelly, President and CEO of the Canadian Federation of Independent Business, said this is “absolutely terrible news for so many Ontario small business owners.”

“We can’t keep doing this. Two weeks to flatten the curve for the health care system is quickly turning into two years for small businesses affected by lockdowns and other restrictions,” he said.

The newest measures include:

  • Retail settings, including shopping malls, permitted at 50 per cent capacity. For shopping malls physical distancing will be required in lineups, loitering will not be permitted and food courts will be required to close;
  • Closing indoor dining at restaurants, bars and other food or drink establishments. Outdoor dining with restrictions, takeout, drive through and delivery is permitted;
  • Personal care services permitted at 50 per cent capacity and other restrictions. Saunas, steam rooms, and oxygen bars closed;
  • Closing museums, galleries, zoos, science centres, landmarks, historic sites, botanical gardens and similar attractions, amusement parks and waterparks, tour and guide services and fairs, rural exhibitions, and festivals; and
  • Closing indoor sport and recreational fitness facilities including gyms, except for athletes training for the Olympics and Paralympics and select professional and elite amateur sport leagues.
Dan Kelly
Dan Kelly

“Closing gyms, indoor dining, and arts and recreation venues is a particularly devastating way to ring in the new year for some of the hardest-hit industries already on their knees. In Toronto, indoor dining has already lost 408 days to closure. Gyms have lost 395,” added Kelly.

“Recovery has never truly begun for most Ontario businesses: Only 35 per cent of Ontario’s small firms are at normal revenues. The average COVID-19 debt for an Ontario small business is an alarming $190,000, and 18.5 per cent are actively considering bankruptcy. There are currently no provincial supports for small businesses and desperately needed grant funding has not been available since April 7, a day before the third lockdown began. The government’s promised property tax/energy rebate program and tax payment deferrals will provide some relief; however, they are not nearly enough, not accessible today, and will kick the debt can further down the road.

“Restrictions of any kind when businesses need to start making up for months and months of lost revenues will be the tipping point for many small firms. It is not lost on business owners that each time the Ontario government has closed businesses, they have gone well beyond the promised lockdown period. CFIB calls on the government to immediately reintroduce provincial grant support for all businesses affected in any way by today’s announcement and provide an immediate pathway to reopening.”

Cumberland Terrace Food Court (Image: Dustin Fuhs)
Bruce Winder

Bruce Winder, author of RETAIL Before, During & After COVID-19 and President of Bruce Winder Retail, said retail in Ontario must battle through another challenging time as the province responds to Omicron.

“The two positives from Monday’s announcement are that 1) It could have been worse – there were rumours that non-essential retail was moving to 25 per cent capacity and that did not come to fruition – yet and 2) for many retailers January is a slow sales month – not much help if you’re in the fitness or ski business unfortunately. Those hit the hardest are gyms, restaurants and specialty retail/eateries that are in schools or tourist attractions,” he said.

“I worry that a new wave of retailers and restaurants will close for good as the combination of supply chain issues, cost inflation, staffing shortages and capacity limits will be too much for them. There is only so much debt these businesses can take on before their balance sheet implodes. Time will tell if government supports can help bridge the gap.

“Hopefully, all retailers and restaurants are set up with e-commerce to keep some cashflow coming in to help with expenses. Now is the time to pivot to partner marketplaces and apps that can generate traffic lost through physical closures.”

Wendy’s – Powered by REEF Technology and NBRHD Kitchens (Image: Dustin Fuhs)

In a statement, Restaurants Canada said: ”Once again, Ontario makes a move that will irreparably harm our industry without any consultation. The foodservice industry continues to bear the brunt of the restrictions and pay the cost of fighting this pandemic, despite having done everything they have been asked.”

“The data that we have seen show that restaurants are NOT the problem, yet we continue to be singled out and have never been allowed to meet with the Chief Medical Officer or the Ministry of Health to discuss data and strategies for restaurants, but have been turned down at every turn.

Today’s decision hurts real people who are seeing their life’s work destroyed. We need support now. Broken hearts don’t pay the bills.”

Restaurants Canada said it is asking the provincial government to take these actions to support the industry:

  • Immediate infusion of grants to restaurants;
  • Deferral of HST payments to allow restaurants to keep money in their hands;
  • Immediate opening of portal to allow for rebates for property taxes and utilities to be processed expeditiously; and
  • Re-imposition of commercial eviction ban, which expired on December 31, 2021.
George Minakakis

“While the measures are needed. The costs are high. All businesses that serve the public face to face and have struggled through this pandemic are at greater risk today,” said George Minakakis, Principal of the Inception Retail Group Inc. and author of the book The New Bricks & Mortar, Future Proofing Retail. “This is coupled with the disruptive and destructive nature of delayed supply chains and inflation. Add in apprehensive consumers for whatever reason, they will not take risks and you have a perfect storm.

“I am surprised that it took so long to come to this decision. Ontario should have followed Quebec’s lead. Businesses need to dial up their digital assets and marketing. I would be planning for the full quarter. It’s important because we are entering the slowest period in retailing and there is no room to wait and see. Finally, I have been concerned about a spillover of a 2019 hangover from businesses that have just been hanging on, we may start to see some of that.”

Linkedin: Rocco Rossi

Rocco Rossi, President and CEO of Ontario Chamber of Commerce, said the organization recognizes that public health and a healthy economy are intrinsically linked, however, sweeping new restrictions – impacting employers, workers, and families – unaccompanied by immediate and commensurate supports is unacceptable nearly two years into the pandemic.

“We need a comprehensive plan that ties restrictions to clear, data-based metrics so that employers, workers, and families can plan ahead,” he said. “We are all doing our part. Now, government needs to do their part. What additional steps does the government plan to take to cover the next 21 days and beyond?”

“Newly imposed public health measures intended to control the spread of the Omicron variant should always be met with immediate, commensurate and targeted relief, particularly for small businesses, many of whom cannot afford any further reduction in revenue.”

In a news conference, Ontario Premier Doug Ford said the province faces a “tsunami” of new COVID-19 cases in the days and weeks ahead. Now, Ontario is bracing for the impact.

“This is a problem that will only get worse as we confront the looming wave of Omicron,” he said.

“Omicron spreads like wildfire . . . If we do not act, if we don’t do everything possible to get this variant under control, the results could be catastrophic.”

Some of the other new Ontario lockdown measures effective Wednesday, January 5 at 12:01 a.m. for at least 21 days (until January 26, 2022) include:

  • Reducing social gathering limits to five people indoors and 10 people outdoors;
  • Limiting capacity at organized public events to five people indoors;
  • Requiring businesses and organizations to ensure employees work remotely unless the nature of their work requires them to be on-site;
  • Limiting capacity at indoor weddings, funerals, and religious services, rites and ceremonies to 50 per cent capacity of the particular room. Outdoor services are limited to the number of people that can maintain two metres of physical distance. Social gatherings associated with these services must adhere to the social gathering limits;
  • Closing indoor meeting and event spaces with limited exceptions but permitting outdoor spaces to remain open with restrictions;
  • Public libraries limited to 50 per cent capacity;
  • Restricting the sale of alcohol after 10 p.m. and the consumption of alcohol on-premise in businesses or settings after 11 p.m. with delivery and takeout, grocery/convenience stores and other liquor stores exempted;
  • Closing indoor concert venues, theatres, cinemas, rehearsals and recorded performances permitted with restrictions;
  • Outdoor establishments permitted to open with restrictions and with spectator occupancy, where applicable, limited to 50 per cent capacity;
  • Closing indoor horse racing tracks, car racing tracks and other similar venues. Outdoor establishments permitted to open with restrictions and with spectator occupancy limited to 50 per cent capacity. Boat tours permitted at 50 per cent capacity;
  • Outdoor facilities are permitted to operate but with the number of spectators not to exceed 50 per cent occupancy and other requirements;
  • All publicly funded and private schools will move to remote learning starting January 5 until at least January 17, subject to public health trends and operational considerations;
  • School buildings would be permitted to open for child care operations, including emergency child care, to provide in-person instruction for students with special education needs who cannot be accommodated remotely and for staff who are unable to deliver quality instruction from home; and
  • During this period of remote learning, free emergency child care will be provided for school-aged children of health care and other eligible frontline workers.

Article Author

Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior National Business Journalist with Retail Insider in addition to working on his own as a freelance writer and consultant in communications and media relations/training.

More From The Author

LUSH

Leger Study Ranks In-Store Experience at Ontario Retailers: Interview

The annual study surveys thousands of Ontarians about their in-store experience and provides top rankings, with some surprising findings.

IKEA Partnership Launching One of the Largest Zero Emission Vehicle Fleets...

IKEA Canada says that it wants to reach 100% zero-emission deliveries by 2025.

RECENT RETAIL INSIDER VIDEOS

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

Latest Stories

Follow us

4,265FansLike
6,734FollowersFollow
10,860FollowersFollow

all-time Popular