New businesses remain ineligible for federal support
70 per cent of businesses say federal and provincial small business relief programs are crucial for their survival in 2021, but many are still unable to access support, warns the Canadian Federation of Independent Business (CFIB).
“Small business owners are anxious to replace subsidies with sales, but with business lockdowns and restrictions still in place across Canada, programs need to be extended and expanded in order to avoid widespread business failures,” said CFIB President Dan Kelly. “Already, one in six business owners is considering permanent closure, and that’s on top of the ones who have already gone out of business. As helpful as the programs have been for many, CFIB’s offices continue to be flooded with calls from small business owners who are struggling to access many of the critical supports. One of the biggest gaps includes the lack of access to federal programs for new businesses that opened in 2020. This needs to change.”
According to CFIB’s latest survey results, two-thirds of small businesses (65 per cent) have used the Canada Emergency Business Account (CEBA) and 59 per cent have used the Canada Emergency Wage Subsidy (CEWS). In comparison, only a quarter have used the Canada Emergency Rent Subsidy (CERS) and 8 per cent have used a provincial support program.
While CFIB has spent months successfully lobbying for improvements and changes to each of the government programs, many additional fixes are required:
- Create a pathway for new (2020) businesses and those with no business number to access federal support programs
- Allow businesses that rent from a non-arms’ length entity to apply for CERS
- Allow tenants to use CERS subsidies for rent bills without requiring full payment
- Immediately process all outstanding applications for expanded CEBA loans and consider a further expansion ($80,000 /50 per cent forgivable) as the pandemic continues
- Allow small firms with less than $40,000 in non-deferrable expenses to access CEBA
- Make a portion of the new Highly Affected Sectors Credit Availability Program (HASCAP) loan forgivable
- Immediately announce the CEWS and CERS subsidy rates and loss comparison formula for the spring months and extend programs until all businesses are reopened and physical distancing requirements end
- Defer tax deadlines until the end of 2021
“The reality for large groups of businesses, like those that started in 2020, is that they are left out of any support at all. For others, the help is too little too late. More work needs to be done to close these gaps so the programs can help as many businesses as possible survive the pandemic,” added Kelly.
You can consult CFIB’s letter to the federal government on the CERS program gaps and CFIB’s briefing document on gaps in all the federal support programs for more information.
Article source: https://stockhouse.com/news/press-releases/2021/02/02/many-small-businesses-continue-to-slip-through-the-cracks-of-government-support
