Support programs introduced by the Ontario government to mitigate losses for businesses during the province’s latest lockdown measures are welcome news for many entrepreneurs but simply don’t go far enough to compensate for their losses.
The Small Business Relief Grant for small businesses that are subject to closure under the modified Step Two of the Roadmap to Reopen will provide eligible small businesses with a grant payment of $10,000.
The Ontario government is also providing electricity-rate relief to support small businesses.
Rocco Rossi, President & CEO, Ontario Chamber of Commerce, said the organization is pleased with the provincial government’s responsiveness to its feedback.
“However, we are deeply concerned about those businesses that will be left behind. On the one hand, the grant is too narrow as it only applies to businesses that were required to fully close. It misses those that are at limited capacity or those losing revenue as a result of restrictions affecting their clients (such as food service suppliers). On the other hand, the electricity subsidy is too broad as it will largely benefit ratepayers that are not impacted by current restrictions,” said Rossi.
“We recognize that public health and a healthy economy are intrinsically linked. However, sweeping new restrictions – impacting employers, workers, and families – unaccompanied by appropriately targeted and commensurate supports are unacceptable nearly two years into the pandemic. Beyond this, we need a comprehensive plan that ties restrictions to clear, data-based metrics so that employers, workers, and families can plan ahead.”
In a statement, Restaurants Canada said it appreciates the government’s announcement to re-introduce the Ontario Small Business Support Grant, but it falls well short of the needs of the industry.
“The restriction to businesses with fewer than 100 employees is unfair to restaurants. The restaurant industry is more labour intensive and dependent on part-time employees than any other industry. Many small businesses will not qualify despite size and need,” said the organization.
“The grant will help, but it will not provide the support many need to keep their businesses running. We need targeted, significant funding that will keep businesses afloat. There is no reason to delay the money until February. Businesses need to pay bills now.
“We still need a ban on the evictions so that restaurants are not locked out of their buildings when the lockdown is over. We have heard nothing on this request, or the need to defer HST remittances to help businesses pay their bills now. The government needs to sit down with us as soon as possible to find ways to ensure restaurants are able to reopen, and stay open, after January 26th.”
The new Ontario lockdown measures became effective Wednesday, January 5 at 12:01 a.m. for at least 21 days (until January 26).
“It is good news the Ontario government will provide $10,000 grants to help compensate for lockdowns. It appears those who received earlier rounds won’t need to reapply. But if lockdowns go on for longer than three weeks, this is entirely insufficient,” said Dan Kelly, President and CEO of the Canadian Federation of Independent Business.
“The grant won’t help those affected by deep capacity restrictions (like retail), suppliers to locked down industries, those losing customers because of fear of Omicron or those who are affected by ‘work from home’ orders (like dry cleaners). More comprehensive help is needed.”
Kelly said 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.
“As the pandemic restrictions continue and consumers are told to stay home, small businesses are struggling with limited sales and staggering debt. The average small business (in Canada) has taken on $170,000 in fresh COVID-related debt and it is this burden that will drag many into bankruptcy or wind down,” added Kelly.
“CEBA (Canada Emergency Business Account) could play a big role in ensuring more small firms survive. CFIB is advocating that the (federal) government add another $20,000 to CEBA loans for a total of $80,000. But loans on their own are not enough. The federal government should significantly increase the portion forgiven to 50 per cent of the total. We are also advocating that the loan repayment period be delayed until the end of 2024 to ensure small firms have more time to get back to normal.”
Peter Bethlenfalvy, Minister of Finance in Ontario, said the provincial government understands that public health measures needed to blunt the spread of the Omicron variant are impacting the lives and livelihoods of small businesses, workers and families across Ontario.
“Since the first day of the pandemic, we have provided unprecedented levels of support to protect people, jobs and our economy. We will continue to deliver on that commitment,” he said.
Eligible small businesses for the Ontario COVID-19 Small Business Relief Grant for small businesses that are subject to closure under the modified Step Two of the Roadmap to Reopen include:
- Restaurants and bars;
- Facilities for indoor sports and recreational fitness activities (including fitness centres and gyms);
- Performing arts and cinemas;
- Museums, galleries, aquariums, zoos, science centres, landmarks, historic sites, botanical gardens and similar attractions;
- Meeting or event spaces;
- Tour and guide services;
- Conference centres and convention centres;
- Driving instruction for individuals; and
- Before- and after- school programs.
CN Tower (Image: CN Tower Facebook) 
HHOF (Image: HHOF Facebook)
“Small businesses, job creators and the entrepreneurial spirit are the backbone of Ontario’s economy. Unfortunately, these businesses have been some of the most impacted by COVID-19, and many continue to struggle,” said Vic Fedeli, Minister of Economic Development, Job Creation and Trade. “Since the start of the pandemic, we have provided unprecedented supports for businesses in every region of the province. With the new Ontario COVID-19 Small Business Relief Grant, our government will provide relief for thousands of small businesses that create jobs for hard working Ontarians.”
The government said eligible businesses that qualified for the Ontario Small Business Support Grant and that are subject to closure under modified Step Two of the Roadmap to Reopen will be pre-screened to verify eligibility and will not need to apply to the new program. Newly established and newly eligible small businesses will need to apply once the application portal opens in the coming weeks. Small businesses that qualify can expect to receive their payment in February.
The Ontario government said it is also providing electricity-rate relief to support small businesses, as well as workers and families spending more time at home while the province is in Modified Step Two. For 21 days starting at 12:01 am on Tuesday, January 18, electricity prices will be set 24 hours a day at the current off-peak rate of 8.2 cents per kilowatt-hour, which is less than half the cost of the current on-peak rate. The off-peak rate will apply automatically to residential, small businesses and farms who pay regulated rates set by the Ontario Energy Board and get a bill from a utility and will benefit customers on both Time-of-Use and Tiered rate plans.
The government said it is also improving cash flows for Ontario businesses by providing up to $7.5 billion through a six-month interest- and penalty-free period starting January 1 for Ontario businesses to make payments for most provincially administered taxes. This supports businesses now and provides the flexibility they will need for long-term planning. Building on Ontario’s efforts to improve cash flows for businesses, the province continues to call on the federal government to match provincial tax deferral efforts by allowing small businesses impacted by public health restrictions to defer their HST remittances for a period of six months, it added.
