A Restaurants Canada vice president hopes the government will continue providing support after many local businesses suffered months of lost revenue due to COVID-19 restrictions.
“Operators have accumulated thousands upon thousands of dollars in debt,” Luc Erjavec, Restaurant Canada’s Atlantic vice president, said. “They have to support us a little bit longer until we get to a point where we can stand up on our own. As long as there are restrictions in place, which it’s pretty obvious there will be throughout the summer, they have to keep the supports going.
“The federal government has to wake up and say, ‘We need to help small businesses.’”
At the time, those programs helped many businesses from shuttering. Some programs, such as the rent and wage subsidies, were extended further into 2021 to continue that support.
Both the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) are currently set to expire this month unless the federal government's 2021 budget is passed.
The budget proposes to extend the wage subsidies until Sept. 25. It also proposes to gradually reduce the subsidy rate starting July 4.
Erjavec said many business owners are concerned about the subsidy programs, especially as the federal government plans to reduce them later this year.
“It’s something that just can’t happen,” he said. “We’re nowhere near close to profitability, we’re nowhere near open for regular, we’re going to have restrictions, we’re going to have borders continue to be closed. We are very, very concerned about what’s going to happen if the federal government moves forward with these changes.”
Between 2021 and 2022, the federal government expects the CEWS to cost $10.1 billion and the CERS to cost $1.9 billion.
It plans to start reducing both subsidies to phase both of them out as more Canadians get vaccinated and the economy reopens.
However, the Canadian Federation of Independent Businesses warned more than 181,000 businesses are at risk of closing over the next year.
“We’ve all heard in the budget these programs are extended,” Erjavec said. “But when you read the fine print, the devil’s in the details, and we see that they’re going to drastically reduce the numbers. That will devastate businesses.
“Businesses that have hung on this long, they just won’t be able to survive — they really won’t.”
He said these subsidy programs have been a lifeline for many businesses and are the reason why many businesses have been able to remain open throughout the pandemic.
As the CEWS phases out, the federal government plans to replace it with the Canada Recovery Hiring Program to offset the cost of increasing worker hours or hiring additional staff as businesses reopen.
That program is expected to cost $595 million and will involve a subsidy of up to 50 per cent between June 6 and Nov. 20 for a maximum of $1,129 per employee per week.
In May, Canada lost a total of 68,000 jobs; that includes 54,000 part-time jobs.
Nova Scotia was the second province — the first being Ontario — that saw the most job losses. Twenty-two thousand jobs were lost in May compared to April, according to Statistics Canada.
“I would urge all of the MPs, instead of saying ‘the budget’s great, we’ve extended these,’ to actually read the details and realize that they are going to kill small businesses,” he said. “Particularly hard-hit sectors, like restaurants, if they move forward with these measures.”
While the provincial government announced some funding programs, Erjavec said the challenge with those is the delay.
For instance, Nova Scotia created the Small Business Real Property Tax Rebate Program in March. Erjavec said it’s something business owners have been wanting for months.
While he said it’s a great program, it was only expected to open this past Friday.
Still, Erjavec praised the province's recent changes to its liquor regulations which now allow licensed establishments to sell alcoholic beverages with take-out food orders.
Last Wednesday, Nova Scotia started phase one of its reopening plan. This phase allows restaurants and liquor licensed establishments to reopen outdoor patios — something that's been popular as weather temperatures rise.
Phase two of Nova Scotia's reopening plan is expected to start on June 16 as long as COVID-19 cases remain low. That phase will allow restaurants and liquor licensed establishments to offer both indoor and outdoor service.
“It is really tough out there right now, particularly with this latest lockdown,” Erjavec said. “For a year we’ve been accumulating debts, we’ve been trying to hang on and we’re just hoping we’re a few more months until things sort of return a little bit to normal and let us open for business as usual.”