Government aid still beyond many small businesses' reach

National federation calls for additional fixes to address crucial gaps to programs

Government aid still beyond many small businesses' reach

At this point, it’s impossible to deny the massive effort the Canadian government at both provincial and federal levels has taken on to keep households and businesses afloat. But according to a new national survey, many of the country’s entrepreneurs are still in dire need of assistance.

In a recent statement, the Canadian Federation of Independent Business (CFIB) said that 70% of businesses are critically dependent on federal and provincial small business relief programs for their survival in 2021, but a concerning number are still unable to access vital lifelines.

“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.”

While acknowledging that many businesses have found relief programs helpful, Kelly said CFIB continues to be inundated with calls from small business owners struggling to access critical supports.

In CFIB's latest survey results, two thirds of small businesses (65%) have benefited from the Canada Emergency Business Account (CEBA), and three fifths (60%) have used the Canada Emergency Wage Subsidy (CEWS). In contrast, just one fourth have used the Canada Emergency Rent Subsidy (CERS) and 8% have used a provincial support program.

“One of the biggest gaps includes the lack of access to federal programs for new businesses that opened in 2020,” Kelly said. “This needs to change.”

CFIB recognized that since being launched last year, each of the government programs have been enhanced and changed in response to their lobbying efforts. However, they urged a raft of additional fixes, including:

  • Creating a pathway for new businesses established in 2020 and those with no business number to access federal support programs;
  • Letting businesses that rent from a non-arms' length entity apply for CERS;
  • Letting tenants use CERS subsidies for rent bills without requiring full payment;
  • Immediately processing all outstanding applications for expanded CEBA loans, and possibly expanding the amounts further ($80,000/50 per cent forgivable) as the pandemic drags on;
  • Opening CEBA to small firms with less than $40,000 in non-deferrable expenses;
  • Establishing a forgivable portion for the new Highly Affected Sectors Credit Availability Program (HASCAP) loan;
  • Immediately announcing the CEWS and CERS subsidy rates and loss comparison formula for the spring months;
  • Not ending programs until all businesses are reopened and physical distancing requirements are lifted; and
  • Deferring 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,” Kelly said. “More work needs to be done to close these gaps so the programs can help as many businesses as possible survive the pandemic.”


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