New closures will be ‘fatal’ for thousands of small businesses, advocate warns

TORONTO — Small businesses that survived the pandemic so far are now at risk of permanently closing if governments don’t do more to help them stay afloat in the second wave, with big corporations such as Costco and Walmart set to benefit most from shutdowns, according to a leading business advocate.

Toronto has banned indoor dining and set a 10 p.m. curfew for all establishments, and gyms are restricted to a maximum capacity of 10 people. In Manitoba, province-wide “code red” restrictions taking effect Thursday will force the closure of gyms, hair salons, casinos and all businesses that are not deemed a critical service. Grocery stores and pharmacies can remain open at 25 per cent capacity.

For Peter Catarino, a restaurant owner in Toronto, the situation is frustrating.

“There’s no clarity. They don’t really have a plan and they can’t give us a set date when we can open,” he told CTV News.

Ryan Diaz owns an 11,000-square-foot martial arts studio in Vancouver. With group fitness activities shut down, he’s now considering selling his house to cover the facility’s $28,000 in monthly rent.

“We’re going to have to do whatever it takes,” he said.

The new restrictions come as Canada has consistently broken its daily caseload records over the past weeks with Ontario and Quebec regularly reporting more than 1,000 cases per day.

Businesses are already struggling to make ends meet. Seventy per cent of businesses in Toronto say they don’t have the finances to make it through another lockdown, according to a recent survey from the Canadian Federation of Independent Business (CFIB).

“The impact on these firms of having to remain closed for an extended period of time is, for many, going to be fatal,” CFIB president and CEO Dan Kelly told CTV News Channel on Wednesday.

The CFIB released a report in July that estimated 158,000 small- and medium-sized businesses are at risk of closing. Today, that number is much higher, Kelly said.

“That number could skyrocket now that not just Toronto but cities across Canada and the whole province of Manitoba is under lockdown orders again,” he said.

New restrictions coincide with the holiday shopping season. In places like Manitoba, where non-essential retail businesses are limited to online shopping, curbside pickup and delivery, shoppers looking for gift ideas may instead turn to big box stores that are allowed to stay open because they have grocery aisles.

“This means we’re going to be once again shifting traffic in Manitoba anyway from small independent businesses to the big box stores like Costco and Walmart that can sell basically anything, anytime,” Kelly said.

Retail analysts already expect a surge in online shopping this holiday season following a steady rise throughout 2020.

A recent survey by the Retail Council of Canada found that even if Canadians are turning to online shopping this holiday season, 90 per cent said it was important to them to shop from a Canadian retailer. The survey also found that Canadians are budgeting less for the holidays, about $693 this year compared to $792 last year. 

The Liberal government tabled a bill earlier this month that included a new commercial rent-relief program to provide aid directly to businesses. The bill would also extend the federal wage subsidy and stop a previously planned slide in the value of payments.

The bill passed in the House of Commons last week and is now before the Senate.

But struggling businesses simply can’t afford to wait any longer for relief, Kelly said.

“What’s most disappointing from the messages from the prime minister is that these programs that he’s talking about as alternatives to businesses remaining open are just not ready,” he said.

Since March the federal government has spent billions in programs for businesses and workers, including the Canada Emergency Wage Subsidy and and the Canada Emergency Response Benefit. Ottawa has also provided $19 billion in “safe restart” funding for provinces.

Earlier this week Trudeau implored the provinces not to keep sectors of their economies open if they are putting Canadians at risk. Instead, the prime minister said they should reach out for help if they find themselves in the position of choosing between jobs or public safety.

“Job one right now is keeping people safe,” Trudeau said on Tuesday.

A survey of more than 4,200 businesses by the CFIB in October found that uncertainty around the second wave was the top concern of business owners, followed by economic repercussions and worries that consumer spending could drop. Fourteen per cent of respondents said they were actively considering bankruptcy or shutting down, a number that’s been steady since the summer.

With files from CTVNews.ca’s Rachel Aiello in Ottawa

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