Ontario’s Small Businesses Face ‘Financial Ruin’ From New COVID Restrictions: CFIB President

A storefront on Roncesvalles Avenue displays a "for lease" sign as part of a protest against the Ontario government's pandemic lockdown rules, in Toronto on Nov. 24, 2020. (The Canadian Press/Jody White)

Thousands of small businesses in Ontario may shut down for good as they won’t be able to survive further loss of revenue when the provincial government introduces another round of lockdowns starting Jan. 5, says the president of the Canadian Federation of Independent Business (CFIB).

“This is absolutely devastating,” Dan Kelly said in an interview with CTV’s Evan Solomon on Jan. 3. “This will lead to the closure and financial ruin of thousands and thousands of people.”

Kelly made the comment shortly after Premier Doug Ford announced sweeping new COVID-19 restrictions effective Jan. 5 in response to the Omicron variant that is spreading throughout the province. 

The new restrictions include closing indoor dining at restaurants and bars until Jan. 26. Gyms, arts and recreation centres, museums, and theatres will also be closed for the same period. In addition, retail settings including shopping malls and personal care services such as beauty salons can only operate at 50 percent capacity.

After Jan. 26, reopenings and the restoration of full capacities will be dependent on public health trends and indicators.

Ontario Premier Doug Ford attends a news conference in Toronto on Jan. 3, 2022. (The Canadian Press/Chris Young)

In a statement on Jan. 3, the CFIB said the province’s public health measures have adversely undermined the recovery of the small business sector.

“We can’t keep doing this,” said the statement. “Two weeks to flatten the curve for the health care system is quickly turning into two years for small businesses affected by lockdowns and other restrictions.” 

The CFIB said the province’s public health measures have already put small businesses “on their knees” and that their accumulated debts are now so high that some are considering closing their doors for good. 

“Only 35 percent of Ontario’s small firms are at normal revenues. The average COVID-19 debt for an Ontario small business is an alarming $190,000, and 18.5 percent are actively considering bankruptcy.”

Kelly told Solomon that the new restrictions to be imposed by the Ford government Wednesday put small businesses “back to square one.” 

“[With] these business restrictions, despite vaccinations, despite vaccine passports, despite all the public health measures that have been put in place, we’re kind of back where we were,” he said. 

Conservative MP Dean Allison, who represents the riding of Niagara West, questioned the Ontario government’s decision on Twitter.

“Another lockdown will destroy what has not already been destroyed with lockdowns previously. So much for two weeks to flatten the curve! Is it possible that those in power have no idea what is going on or how to fix this?” he posted on Twitter on Jan. 3.

https://twitter.com/deanallisonmp/status/1478009923816591366?s=28

In a press release on Jan. 3, Ford’s office said new business aid will be available in mid-January to help small businesses impacted by the new measures.

“Eligible businesses that are required to close or reduce capacity will receive rebate payments for a portion of the property tax and energy costs they incur while subject to these measures,” the statement said, referring to the Ontario Business Costs Rebate Program.

“Eligible businesses required to reduce capacity to 50 per cent, such as smaller retail stores, will receive a rebate payment equivalent to 50 per cent of their costs, while businesses required to close for indoor activities, such as restaurants and gyms, will receive a rebate payment equivalent to 100 per cent of their costs.”

The rebate payment will be retroactive to Dec. 19, 2021. Meanwhile, the province will also provide businesses the option to delay their payments to certain taxes such as the Employer Health Tax and Fuel Tax.

The CFIB said that while the new rebate program and tax payment deferrals may offer some form of relief to small businesses, “they are not nearly enough, not accessible today, and will kick the debt further down the road.”

The advocacy group called on the Ford government to reinstate the Ontario Small Business Support Grant that ended in April 2020, and “provide an immediate pathway to reopening.” 

“Restrictions of any kind when businesses need to start making up for months and months of lost revenues will be the tipping point for many small firms,” the group said.

“It is not lost on business owners that each time the Ontario government has closed businesses, they have gone well beyond the promised lockdown period.”