The Ontario government has announced a new round of $10,000 grants for small businesses affected by pandemic lockdowns, but industry groups say the amount is a drop in the bucket compared with the revenue they are losing this month.
Ontario introduced new restrictions this week in a bid to slow the spread of the highly contagious Omicron variant, closing fitness facilities, ending indoor dining in restaurants and bars and restricting capacity at retail stores.
The province said Friday it would soon provide $10,000 grants to businesses with fewer than 100 employees that have been affected by the lockdown. Businesses that had already received funds through the two previous rounds of grants, which were worth between $10,000 and $20,000, would automatically receive the payments; otherwise, businesses would have to apply on a government website.
Ontario is also providing rebates for property taxes and electricity payments for affected small businesses.
Industry groups welcomed the news but said $10,000 is just not enough compensation.
James Rilett, Restaurants Canada’s vice-president for Central Canada, said the arrival of the Omicron variant in December prematurely ended the holiday rush that many food establishments were counting on for a large percentage of their annual sales. Many restaurants have now laid off staff but still face high fixed costs such as rent.
“We’re glad they did something … but for many restaurants, their expenses are $10,000 a week,” Mr. Rilett said.
Sara Hodson, president of the Fitness Industry Council of Canada, said the new restrictions in Ontario and British Columbia arrived just as gyms were preparing for the rush of new members they get at the beginning of the year.
“Another financial loss is the huge marketing dollars spent on the great anticipation for New Year’s, typically the strongest months in our industry,” Ms. Hodson said. “These dollars will now need to be spent again when we reopen in order to market to our potential customers.”
Other business groups, including the Canadian Federation of Independent Business and the Ontario Chamber of Commerce, said they were worried about the length and sweeping nature of the new restrictions.
“Our biggest concern is that the lockdowns and restrictions will continue for more than three weeks with no additional support for the businesses affected,” CFIB president Dan Kelly said.
Some businesses have not been ordered to close but have still seen demand for their services plummet during the pandemic.
Sidney Chelsky, executive director of the Canadian Fabricare Association, said dry cleaners have been left in the lurch. They have been deemed an essential service so they can provide cleaning to emergency personnel, but those services only represent about 5 per cent of the sector’s total sales. Other revenue has dried up because millions of Canadians are now working from home.
“This government has failed an industry made of mostly small businesses owned and operated by family members,” Mr. Chelsky said. “It has been disheartening to watch elder members of our industry have to return to sometimes difficult work in cleaning and pressing, as they no longer could afford to have any staff due to the lack of sales.”
Ontario’s Auditor-General raised some concerns in a December report on the province’s earlier supports for small businesses. The audit found that the small-business grant system had a poor internal set of controls, which led to $210-million in payments to ineligible businesses. The audit also questioned the value of a flat grant amount as opposed to one commensurate with a business’s losses.
Conversely, earlier rounds of property tax and energy rebates were underutilized, with only $340-million sent to businesses from an allocated budget of $905-million. The Auditor-General conducted a survey of small businesses that found more than half of respondents did not know they were eligible for the rebates.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.