May 24, 2020

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Local businesses need our support


More than half of small and medium-sized businesses in Canada have laid off staff in recent weeks as a result of the COVID-19 pandemic. One-quarter have let their entire workforce go. Nearly one in three companies won’t be able to survive beyond the next month under current conditions. About 60 per cent have seen a sharp drop in sales. More than one in three are experiencing sales reductions of 75 per cent or more.

These are some of the grim statistics released Tuesday by the Canadian Federation of Independent Business, based on a survey last weekend of almost 11,000 small business owners. It’s already showing up in the unemployment data; nearly one million Canadians applied for employment insurance between March 16 and March 22. With companies closing their doors every day, that number will continue to grow.

Small business has been hit especially hard by COVID-19.</p>


Small business has been hit especially hard by COVID-19.

Without a significant financial aid package from governments, a large portion of Canada’s small- and medium-sized businesses will face economic ruin as a result of the pandemic. Many businesses, including in the hospitality sector, have been forced to shut down entirely, or at least partially. Many more, including suppliers of those hardest hit, are trying to cut costs and keep their heads above water. But ultimately, many will have no choice but to shut their doors and lay off staff.

The CFIB is recommending that government provide businesses with a 75 per cent wage subsidy to allow as many companies as possible to retain staff. The alternative is unthinkable; millions of workers on the unemployment line unable to pay their bills, their rent or their mortgages. Some of the relief Canada’s banks have offered to defer mortgage payments will help. But it’s not nearly enough (nor are the small measures announced Tuesday by the Pallister government to freeze rent and ban non-urgent evictions).

Whether it’s the CFIB’s proposed wage subsidy or other solutions, governments have to act quickly to avoid a catastrophic collapse of the small-business sector. There have been other suggestions, including deferring tax instalments and providing companies with breaks on their property taxes and utility bills. Governments should work closely with business groups, assess the needs of small- and medium-sized businesses and act quickly to provide them with the support they need.

The longer government waits, the more jobs and businesses will be lost. The opportunity to stave off even higher unemployment than we’re now seeing will be lost. Saving as many jobs as possible not only prevents many from requiring government assistance (such as unemployment insurance and social assistance), it helps preserve much-needed tax revenues and consumer spending.

Without a significant financial aid package from governments, a large portion of Canada’s small– and medium–sized businesses will face economic ruin as a result of the pandemic.

Government support alone may not be enough to save some businesses. The public must help, too. Consumers need to find ways to support their local businesses. That may be difficult to do in cases where companies are fully or partially shut down. However, there are ways to support businesses that have closed their doors, such as take-out orders from restaurants and shopping online where available. Some service-based companies may have suspended most of their operations, but are still selling goods online. We need to support them.

Find out whether your local businesses are still operating, including online, and make a purchase, if you are able. Between government assistance and targeted consumer spending, Canadians and Manitobans can do a lot to support these companies.

Small- and medium-sized businesses are the backbone of our economy. We have to do everything possible to save as many of them as we can.

Editorials are the consensus view of the Winnipeg Free Press’ editorial board.

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Larry Kusch and Carol Sanders:

Provincial COVID-19 case count jumps to 35

A city woman in her 60s has been admitted to hospital in critical condition, chief public health officer Dr. Brent Roussin said Wednesday. (John Woods / The Canadian Press)

Sarah Lawrynuik and Carol Sanders:

Testing questioned as Manitoba COVID-19 cases spike

(Mikaela MacKenzie / Free Press files)</p>
Jesse Klym sent his 500 early years students a 21-day schedule of activities to complete before school is expected to resume on April 13. (Mike Deal / Winnipeg Free Press)
Signs warning customers not to enter if they've been travelling or are symptomatic at the Co-op gas bar in Morris on Wednesday.
Loren Remillard, president & CEO Winnipeg Chamber of Commerce.
Winnipeg Blue Bombers General Manager Kyle Walters says he is being forced to adjust on the fly like everyone else. (Mike Deal / Winnipeg Free Press Files)
Ben and Megan Capili, pictured with daughter Azazel, are lending their ears and offering advice to people finding it challenging to manage the emotional and psychological impacts of the COVID-19 pandemic that looms over daily life. (John Woods / Winnipeg Free Press)</p></p>
Small business has been hit especially hard by COVID-19.</p>