It was good to meet w Toronto Mayor @JohnTory together w other business assocs to share the impact the Toronto/Peel lockdowns are having on small business.
CFIB shared our member data. In Toronto:
- 47% of small firms are fully open
- 15% are earning normal levels of revenue
- 52% are losing money every day they are open
- 31% are concerned about permanent closure
Toronto & Peel are the only regions in all of Canada that require small retailers to close while allowing big box stores to remain open. Sask allows small firms to remain open, but limits big box stores to 50% capacity. Isn't that a better approach?
CFIB is urging the province to allow small retailers in Toronto/Peel to open w strict customer limits (the greater of 3 customers or 20% of capacity). If you support the cause, please sign our petition: promo.cfib-fcei.ca/saveontario/
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I've had dozens of discussions w officials on lockdowns over the past few weeks. Here is how they typically go:
Me: Why are you locking down small retailers & leaving big box open to sell similar items?
Officials: We are locking down retailers based on medical advice.
Me: Will you share the data they are using to support shutting down small retailers?
Officials: The data isn't clear. What is clear is that people need to stay home.
I've been asked a lot of what would happen to small business if a second wave of COVID-19 prompts a further round of economic shutdowns. Here are a few thoughts.
1. In March, governments bluntly shutdown most of the small business economy in order to protect society. Support programs to help small firms survive were just not in place. This was, to an extent, understandable.
2. It took months to get programs up and running and governments did quite a poor job of listening to what was needed. But, with some programs like the wage subsidy, they got there.
While it is good news that EI rates are frozen for 2 years and the new benefits are temporary (for now), CFIB's biggest concern is that a worker can now collect $400 per week for a half-year if they've been working a part-time job with 3 hours a week (or less).
So my part-time job in high school (washing dishes at a pizza place for 3 hours each Friday night) would qualify me to collect over $10,000 if I decide NOT to work.
Small firms in retail, hospitality, arts/recreation & the service sector were the hardest hit by COVID-19. Now that they are allowed to open, many will struggle to get their part-timers back, making them more vulnerable to bankruptcy & slowing Canada's economic recovery.
As more municipalities announce mandatory masks/face coverings, CFIB asks for care and consideration for small businesses trying to implement any new rules.
Most business owners I've spoken to are quite willing to post a sign asking customers to wear a mask and remind them at the door or in the business.
The problem is any requirement for a small business to enforce mandatory masks for people who may be unwilling or unable to wear one.
CFIB believes a properly designed wage subsidy is the single best measure govt can take to (a) protect/stress on employees (b) ensure the viability of SMEs through the crisis & (c) ensure the economy can quickly recover by getting people back to work immediately after the crisis.
But we have heard concerns from small business on how the 30% revenue drop test may not work in practice.
1. New businesses without a track record; 2. low margin firms where even a small drop in sales can require major layoffs; 3. revenue recognition rules showing income that might never be received or which doesn't bring in cash;
While it would have been better to provide the details of the expanded wage subsidy for SMEs at the announcement yesterday, it was critical that government share its intention to do so immediately.
I've heard from many small biz owners that they put their layoff plans on hold as soon as the announcement was out. Others have been holding on, hoping the announcement would come.
For others, it will be too late as they've already laid off staff. While some may bring them back on payroll, I suspect most won't be in that position.