‘It’s still a ghost town downtown’

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This article was published 14/07/2023 (814 days ago), so information in it may no longer be current.

After four decades on Portage Avenue, Book Fair Comics is at risk of closing its doors.

Despite changing rhetoric and loosened policies around COVID-19, it hasn’t been a return to normal for owner Judy Weselowski.

“It’s still a ghost town downtown,” Weselowski said.

The once bustling noon-hour crowd is out-to-lunch somewhere else. The Portage Place food court is far emptier than it was several years ago. Instead of merchandise, For Lease signs decorate the windows of downtown storefronts.

As the Dec. 31 deadline for the Canada Emergency Business Account (CEBA) inches closer, Weselowski said she won’t be able to pay it back without shuttering her bookstore.

She’s far from the only business owner struggling. Only 13 per cent of businesses who received the loan had repaid the non-forgivable portion as of November 2022.

Launched in April 2020, CEBA offered interest-free loans of up to $60,000 to help small business owners stay afloat during COVID-19 lockdowns. In total, 898,271 Canadian businesses were approved for CEBA loans and 23,424 in Manitoba. By the time it wrapped up, the federal government had dedicated $49.2 billion in funding to the program.

Business owners who repay the loan balance on or before Dec. 31 will receive loan forgiveness up to 33 per cent. If they don’t, they’ll have to repay the full loan at an interest rate of 5 per cent per year. The final deadline to pay the loan in full is Dec. 31, 2025.

On Wednesday, the federal NDP called on the Liberals to extend the payment deadline. The Canadian Federation of Independent Business (CFIB) estimates that 8,000 small businesses in Manitoba are at risk of closure due to the CEBA repayment.

“Insisting on this repayment deadline for businesses still reeling from the pandemic, economic uncertainty and rising interest rates is the only way to guarantee the money is never repaid,” said Elmwood-Transcona NDP MP Daniel Blaikie in a press release. “Extending the repayment deadline would help businesses now, ensure their services and employment opportunities remain available to people in their communities and likely result in more of the loans being repaid in the long run.”

Brianna Solberg, CFIB’s director of legislative affairs for Prairies and Northern Canada, said they want the federal government to extend the  deadline for interest-free repayment with loan forgiveness until December 2024 — or ideally until December 2025.

If not, the consequences could be drastic, she said.

“This has wider ranging impacts than just on business owners themselves,” Solberg said. “If 8,000 small businesses are at risk of closure as the repayment deadline approaches, then all of their employees are at risk of being out of a job.”

Like many small business owners in the province, Weselowski applied for CEBA to help make ends meet during COVID-19. Throughout those turbulent years, they had to lay off staff and shift to curbside pickup. The online shopping boom hasn’t helped the brick-and-mortar bookshop either, Weselowski said.

At The Pure Escape Massage Therapy on Corydon, financial recovery remains a work in progress. After reopening two years ago, some regular pre-pandemic clients still haven’t returned.

“We still haven’t recovered,” owner Rosario Cesario said. “We came back and we were down 75 per cent in business. It was a slow climb…but we’re two years past that and we’re still off 15 per cent from where we were.”

Lockdowns and pandemic uncertainty have had a lasting impact on Cesario’s massage business. He spent around $10,000 on COVID-19 cleaning supplies and other preventative equipment alone and has yet to fully recuperate the costs.

The entire ordeal has taken a significant toll on Cesario and his staff’s mental health. He said extending the CEBA deadline would give the business a chance to truly get back on its feet.

“The one thing that you can’t quantify or put down on paper is the stress that business owners face,” Cesario said.

Solberg believes there’s been a federal “subsidy battle” between large corporations and small businesses. Between 2020 and 2021, the federal government spent $100.7 billion on the Canada Emergency Wage Subsidy (CEWS), which provided employers a subsidy of up to 75 per cent of their employee wages.

According to an article published in the Globe and Mail in Feb. 2023, 2,280, publicly-traded companies received CEWS, amounting to a total of $9.9 billion.

In addition to extending the deadline, Solberg said CFIB wants the federal government to consider increasing the forgivable portion of the loan from 33 per cent to 50 per cent and to implement an appeal process for business owners who received the loan but were later deemed ineligible, therefore having to repay it in full.

While Cesario knows his business would’ve gone under without the CEBA benefit, he wishes the government was more attentive.

“They didn’t ask us what we needed,” Cesario said. “How about talking to the business owners a little more and seeing what we truly needed to get through?”

cierra.bettens@freepress.mb.ca