Apr 3, 2020
Cash crunch and layoffs: Inside small businesses' fight for survival
How small businesses are coping amid the COVID-19 pandemic
It's been a tough month for Canada's small businesses. A significant part of Canada's economic engine, many small businesses across the country have laid off staff as COVID-19 threatens to close their doors permanently. To avoid this, Ottawa has announced a wage subsidy program for companies, charities and non-profits to help cover three-quarters of employees’ salaries for businesses that have seen their revenue drop by at least 30 per cent due to COVID-19 as well as a $40,000 interest-free loan where $10,000 can be forgiven if certain conditions are met.
BNN Bloomberg spoke to ten small business owners from across Canada to see how the spread of COVID-19 has impacted them over the past month and whether the government's emergency aid measures will help them keep the lights on until the pandemic is over. These interviews have been edited for clarity.
Name: Krista Touesnard
Business: Tipsy Muse Cafe
Description: Licensed cafe and live music venue
Location: Fredericton, New Brunswick
Year Founded: 2019
Monthly payroll estimate: $18,000-$20,000
How has COVID-19 impacted your business?: "We're only a year old so you can imagine cash flow and overhead costs are still part of our reality. When everything hit, it was very hard and we were faced with closing our doors forever. We quickly established a delivery model which is outside the realm of what we do. It's keeping the lights on with just two employees helping out. It's a battle that a lot of restautrant owners are facing."
How will the government's emergency aid measures help your business?: "When we first heard about it, we thought that it would let us breathe a little bit. We have one staff and another employee which we didn't know if we would have the funds to keep on. When we heard about the wage subsidy, we decided to keep the second staffer on and give them 35 hours a week. As well, maybe I can also pay myself with the wage subsidy."
What more should the government be doing to assist small businesses?: "I think the government has done a lot, to be honest, but I'm a new business owner so I don't have the past experience of crisis to compare to. The wage subsidy will help us as owners and give us hope that if our delivery model works, we can give employment back to some employees, but it's a wait and see.
Name: Bob Hoevenaars
Business: Alarmtech Security Systems Inc.
Description: Residential and commercial alarm sales and servicing
Location: London, Ontario
Year Founded: 1985
Monthly payroll estimate: $25,000
How has COVID-19 impacted your business?: "At this point of time, the only two people coming into the office are my wife and I. Our technicians are working from home so they can be dispatched from their house. We've had to lay off a couple office staff and re-hire them on a temporary basis with reduced hours. We did the same thing with our technicians. We can't offer full-time employment as the number of jobs dropped right off. Our in-person consultations have changed to using Skype and online video. On the positive side, we've been a business for 35 years, so we have a lot of clients we provide monitoring services to and can go on throughout the crisis. It just depends on how many of them may go bankrupt."
How will the government's emergency aid measures help your business?: "No one wants to incur more debt at a time like this, so I am happy that the government has come to the table with some solutions to help you dig out of a hole when everything is said and done. We've looked at all those measures and we're communicating with our employees to determine the best course of action for them going forward. We're looking at taking advantage of the $40,000 loan because it's interest free and could ease the burden for us."
What more should the government be doing to assist small businesses?: "In a lot of cases, it's speed of delivery. I know that this is unprecedented, but speed of relief is a big thing. Rent and mortgage relief would likely be a good portion of what other small businesses may require and prevent them from shutting their doors."
Name: Jennifer Russo
Business: Muscle Média Suppléments
Description: Retail store that sells protein supplements, vitamins
Location: Brossard, Quebec
Year Founded: 1993
Monthly payroll estimate: $4,000
How has COVID-19 impacted your business?: "We can now stay open with reduced hours but sales are catastrophic. For example, from last Wednesday to Saturday, I closed with less than $100 in sales. A really good day for me is between $800 to $1,000 a day. I contacted my landlord and pleaded with them for a rent deferral for a month or two. They refused and I waited a couple days and asked again for a deferral. They said that I could pay some rent and the rest would be distributed until December. I thought that was unacceptable and my lawyer advised me to not pay the rent because the courts were closed."
How will the government's emergency aid measures help your business?: "It's ridiculous. Ask anyone in a small business: we're already living paycheque to paycheque. What's $40,000 going to do? We don't need more debt. We deserve free money. Why can't we get our break? (Prime Minister Justin) Trudeau hasn't come up with anything solid yet for us to survive."
What more should the government be doing to assist small businesses?: "I would prefer a complete deferral of all payments without any repercussions, similar to what they're doing in France. When this thing is over, not only will this prevent economic collapse, we will be able to pick up where we left off. What we just want is a break and a complete deferral is all I'm asking for."
Names: Matthew Herchel, Ben Hohner
Business: 2H Media
Description: Marketing agency
Location: Guelph, Ontario
Year Founded: 2017
Monthly payroll estimate: $20,000
How has COVID-19 impacted your business?: "We service a wide variety of industries, so some have shut down and some have done really well. We're going through a shift where people are doing remote work, so we're offering workshops on how to train people how to work remotely, so that's taking off quite a bit. Things may be going well now, but over the next six, seven months it is unknown if our clients will have room in their marketing budgets for our services."
How will the government's emergency aid measures help your business?: "Because the details are changing so often, we're not taking it as real until it actually happens. The minute it does happen, we would definitely take the government up on it."
What more should the government be doing to assist small businesses?: "I think the government should take this time to invest in digital resources and advertising to get the word out about any changes in policy and funding availability."
Name: George Andrews
Business: G.J. Andrews Food and Wine Shop
Description: Specialty grocer
Location: Winnipeg, Manitoba
Year Founded: 1987
Monthly payroll estimate: $48,000
How has COVID-19 impacted your business?: "I expected to take a hit in business because our wine licence allows us sell to restaurants as well to the general public and that's half of our revenue. Unfortunately, that literally disappeared overnight on March 17 when the restaurants all closed. I thought we could hang on and not let anyone go, because I'm sensitive to the fact that people have their own expenses to pay for. But we've had such a jump in the food side that we're basically where we were before the crisis started."
How will the government's emergency aid measures help your business?: "It wouldn't really apply to us, but for the businesses that I do know that are still operating such as restaurants with delivery and pick-up business, they're trying to stay open and the subsidy will help them out. It's creating an unusual situation for a lot of people and businesses and it's difficult to see how things will play out in the end."
What more should the government be doing to assist small businesses?: "I don't spend beyond my means and I watch my expenses so I have a backup for a rainy day. This, however, is quite a rainy day. We have become a society of living paycheque to paycheque and when something like this hits, it's a much bigger impact on people and businesses."
Name: Mark Heise
Business: Rebellion Brewing Co.
Description: Craft brewery
Location: Regina, Saskatchewan
Year Founded: 2014
Monthly payroll estimate: $100,000
How has COVID-19 impacted your business?: "We've had to lay off about half of the staff, those who worked in the retail and event space. We're fortunate that people are still consuming beer but it's not going to be at the same pace as it was before."
How will the government's emergency aid measures help your business?: "I was really impressed by the initial reponse by the federal government and the deferrals and the wage subsidies were good, but I'm still waiting for more information. There's still so much ambiguity with what the federal government has offered. We may not go bankrupt this month, but we may go bankrupt in the next three months. We really need quick, calming and decisive action from federal or provincial governments."
What more should the government be doing to assist small businesses?: "They need to provide really clear direction on wage subsidies. If you're a Mom and Pop operation that suspended a business, that doesn't really help them pay a salary. Those folks need very quick and responsive action and I don't see that coming from the government right now."
Name: Marcus Campbell
Business: Terralta Inc.
Description: Solar energy equipment supplier
Location: Medicine Hat, Alberta
Year Founded: 2006
Monthly payroll estimate: $80,000-$90,000
How has COVID-19 impacted your business?: "It's basically brought our business to a halt. We've had to lay off about 20 of our employees because there wasn't an abundance of work for us to focus on. We want them to take advantage of the unemployment benefits that they've always had to pay into every month. The health and safety of our customers and employees is pretty important, so we've chosen to keep them laid off until things are more clearly defined."
How will the government's emergency aid measures help your business?: "I don't think a lot of that stuff has been made clear. The 10 per cent wage subsidy was going to be a big help, but with the 75 per cent wage subsidy, the message how we interpret that is that the feds want us to bring our workers back to work. The problem is that we need work for them to do. I'm interested in the $40,000 loan and we'll have to show how our cash flow is reduced there. At the end of the day, it's going to be the small business community that pulls our economy out of this recession."
What more should the government be doing to assist small businesses?: "Given that this is an unprecendented time, I think regardless of if you like Trudeau or the Liberals, the coming together of all political parties looks like a tipping point where everyone is playing more fairly. They're all trying to do the best for all Canadians."
Name: Jacquelyn Cardinal
Description: Indigenous education consultancy
Location: Edmonton, Alberta
Year Founded: 2016
Employees: 2 + several contractors
Monthly payroll estimate: $15,000
How has COVID-19 impacted your business?: "Our live and in-person training has either been cancelled or postponed for later this year. It's a signifcant portion of our monthly revenues. Another portion of our work is reliant on ethnographic research where we go into Indigenous communities. None of that is possible now but we're looking at how to use technology to make that work happen."
How will the government's emergency aid measures help your business?: "Because we're a smaller company, it's hard to deal with the initial shock of losing our business and trying to coordinate with our contractors. I feel like now we're just coming up for air to explore what kind of support is being available for us. It feels like there's a firehose effect and trying to comb through all the information being offered through all the various government programs has been difficult for us."
What more should the government be doing to assist small businesses?: "For many small businesses, having more support for the general Canadian population will help us feel safer, in general. If you're looking to hire someone or launch a contract, if you don't feel safe, it's harder to really think long term. I'm a big proponent of basic income to help everyone feel safer and let people be confident to start a business or spend money. I'm also hoping that Indigenous people won't fall through the cracks and I'm trying to keep sure that we are engaging with Indigenous people, and taking special considerations to support those populations, as well as newcomers and marginalized peoples. Those are the kinds of people that suffer when these kinds of crises emerge."
Name: Sam Mod
Business: FreshWorks Studios
Description: Software and mobile app developer
Location: Victoria, British Columbia
Year Founded: 2014
Monthly payroll estimate: $400,000
How has COVID-19 impacted your business?: "When the pandemic started, we kind of anticipated it and we allowed our employees to work from home. We started to make videos to circulate around the company to give our employees a sense of where we are as a company as it may be a new normal for us. Some of the conversations with clients have stopped or been delayed until further notice. We have about 10 to 15 people we're trying to find work for and help keep them motivated."
How will the government's emergency aid measures help your business?: "I think the wage subsidy really will help us, but we're not looking for a loan right now."
What more should the government be doing to assist small businesses?: "I think the government is doing the right thing. Maybe they can make procurement even faster."
Name: Marc Charlton
Business: MPEST Solutions Ltd.
Description: Pest control and prevention
Location: Fergus, Ontario
Year Founded: Feb. 2020
Monthly payroll estimate: "Not available since the company is so new. The owner isn't taking a salary for the next several months"
How has COVID-19 impacted your business?: "I have a lot of large condominium buildings that I work with and trying to service them has been difficult. For example, I had to do a bed bug job earlier this week but it took me a couple of hours to find a Pyrex suit or the appropriate respirators. I'm just trying to do my work safely without the proper equipment in place and make sure everything can be sanitized for my job. Trying to social distance when clients are trying to show you problems has also been frustrating."
How will the government's emergency aid measures help your business?: "I don't think I need that right now. I might need to hire someone once we have the right procedures in place to make sure everything we do can be done safely. Interviewing and find the right person may be challenging for me."
What more should the government be doing to assist small businesses?: "There's not a lot of information on how to properly sanitize businesses right now. There's a lot of misinformation going on right now on how to keep everything santized and clean."