Thread by @jonrshell

Bill Morneau said the #CEBA loan was for "the local restaurants, the corner coffee shops, the small travel agencies, the salons and barbershops ... the very backbone of Canada's economy."

Related story: Most barbershops won't even qualify for the loan created for them.

THREAD 1

For reasons no one can explain, businesses require at least $50K in payroll to qualify for the loan. Unless there's a secret reason for this, it displays a shocking misunderstanding about how local small business works. 2/7 #CEBA #covid19Canada

Barbershops, for example, are often organized as a collective of individual barbers, where the barbers either rent chairs or are paid a % of revenue as contractors. Owners will pay themselves dividends. So, payroll is zero, and they won't qualify for this loan. 3/7 #CEBA

Barbers, tattoo parlours, hair salons - many local small businesses are organized this way. Do you know how I know this? My barber told me one day. You just need to talk to ACTUAL small business owners. (It's not exactly hard to get a barber talking.) #CEBA 4/7

Family-run small businesses who don't have outside employees (very common) will rarely have a payroll, as our tax system is designed so that they're better off paying dividends. They also won't qualify. These are the people who need help the most. #CEBA 5/7

In fact, in a poll we did yesterday of the savesmallbusiness.ca community, of the 2,000 respondents about 40% thought they'd met the payroll threshold. So, the loan designed to prevent the "backbone of the Canada's economy" from failing won't apply to most of the backbone. 6/7

#CEBA is a badly designed answer to a the critical problem of small businesses being forced to close in response to a public health crisis. Government should just copy the much better policies in the US, UK, Australia, France, etc. before it's too late. #covid19Canada 7/7