Wage subsidy boost a good start for Burnaby businesses

The federal government announced an increased wage subsidy, a GST/HST deferral until June 30, and interest-free loans for small businesses today (Friday, March 27). While some Burnaby business owners were happy to hear it, they say more steps are needed.

Dageraad Brewing owner Ben Coli said the wage subsidy, which increased from 10% to 75% and is backdated to March 15, would help his business a lot.

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But it wouldn’t help all businesses, he added.

“It only really works for business in certain circumstances, like my business,” he said. “This is absolutely going to fix the problem for us. If our labour expense drops by three-quarters then we’re going to be fine. On the other hand, for businesses that are not able to operate at all, this is of zero use.”

He mentioned personal service businesses like hair salons and massage therapists.

“A wage subsidy doesn’t help at all because they can’t operate at all,” Coli said. “They can’t make up the 25% that’s left.”

Coli is part of a coalition, savesmallbusiness.ca, that is asking the federal government to help small businesses across Canada stay afloat.

Another big issue right now is rent, he said.

“For a lot of these businesses there’s rent coming in a few days. And my understanding is from a lot of businesses I’ve been speaking to, landlords have in general not been super open to renegotiating lease terms and creating space for these businesses,” he said. “Unless there’s federal money coming to support the landlords and support businesses in coming to an arrangement for rent, there are going to be a whole pile of rent defaults on April 1st.”

The government guaranteed loans are interest-free for a year, can be up to $40,000 and in some circumstances $10,000 may be forgiven, according to Prime Minister Justin Trudeau’s announcement Friday.

But business loans are still due, and if they are renegotiated, businesses will still owe interest on those, Coli pointed out.

More needs to be done for small businesses, particularly in the areas of rent and financing, he said.

“You’re asking these businesses first to shut down for the greater good, first to shut down because we’re all fighting this disease together ‘oh, but, by the way, you’re still personal liable for the rent you’re going to have to pay while shut down,” he said. “We’re creating a collective effort against COVID-19 in this country, and it’s really unfair for the bulk of those costs to fall on small businesses while landlords and banks get treated like it’s business as usual. They’re still collecting rent; they’re still collecting interest.”

Another Burnaby business owner was glad to hear about the financial relief for small businesses but agreed that rent is still a major issue.

Judith Gauge, co-owner of Stan’s Pizza Joint in Burnaby Heights, responded to a call out from the coalition for stories from businesses being affected by the COVID-19 crisis.

Gauge said she approached her landlord about the rent, which is about $5,000 per month, to see if something could be done to help them during the COVID-19 pandemic. According to Gauge, her landlord’s reaction was less than sympathetic and she was told the landlord had their own bills to pay.

“That’s a big ticket,” she said of the rent cost, adding they hadn’t been able to pay at least two other bills. “We probably will be able to scrape together the rent this month.”

But she’s uncertain about the future.

“It’s day-to-day what happens next,” Gauge said.

Business has dropped by 50%, she said.

The restaurant usually employs 14 people overall, but two servers have been let go, and a 80-year-old part-time employee – Stan Reid’s sister – is staying home, Gauge said.

They can’t bring back the two servers as there is no work for them, since restaurants are down to pickup/delivery only now, Gauge said.

It’s a relatively small space, so they have to be careful about social distancing, she added.

Everyone is concerned about safety, according to Gauge, who said she goes back and forth between wanting the government to shut everything down for two weeks and knowing she has to pay the bills.

“I just want to be as safe as I can be,” she said.

Amended on March 29, 2020 at 7:40 a.m.

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