Local businesses hit hard by the spread of COVID-19 said new measures introduced by the federal government will help keep their businesses going.
On March 27, Prime Minister Justin Trudeau announced the government would hike its wage subsidy from 10 per cent to 75 per cent, following calls from organizations including the Canadian Federation of Independent Business to increase the amount.
The decision will be backdated to March 15, with more information to be released by the government soon.
The federal government is also launching a small business emergency account that will allow banks to offer a $40,000 government-guaranteed loan, interest-free for one year. If the small business meet certain conditions, the first $10,000 will be forgiven.
HST and GST payments are being deferred until June.
The government is also launching an additional $12.5 billion in spending trough federal programs to help with “operational cash flow” requirements.
'Huge improvement'
The package announced by the Trudeau government may be able to help her business weather the storm of the global pandemic, said Jenny Pyshniak, co-owner of Seasons Gift Shop off McKenney Avenue in St. Albert.
She said the store has seen their sales drop by 60 per cent due to strict measures put in place to slow the spread of COVID-19.
"Personally, 75 per cent is a huge improvement over 10 per cent. Ten per cent was nothing really – it wouldn't change any decisions," she said, noting though she does want to see an application first.
The home goods store is still open with modified hours, and plans to implement a delivery service next week, she said.
The store has not laid off any of its part-time employees, but rent payments, low-foot traffic and social-isolation measures are becoming increasingly challenging to navigate without immediate cash flow.
Deferred GST payments and the wage subsidy will help, but being able to pay rent is a larger concern for the business right now.
"That is the clincher," she said.
As a small business, Pyshniak said she also had reservations about the usefulness of banks reducing and waiving interest rates for credit cards.
"I think it's great that they have all come back and said for six months you don't have to pay, but interest will still accrue. That is no help at all," she said. "Interest on credit cards is not something anyone can afford to pay if you're being prudent as a business person."
With only two people at the bakeshop right now, Jarrett Delaney, co-owner of Confections Cake Co. on Perron Street, said both himself and his partner Brittany Allen have been pulling incredibly long shifts since they had to lay off their employees, working from 7 a.m. to 2 a.m. six days a week.
"We've had some sleepovers," Delaney said.
He said the expanded federal wage subsidy should allow for the shop to bring one part-time employee back on, though they're still figuring out how many people they'll really need right now.
While he said he's optimistic of the news Friday morning, the small business has gotten little help from previous relief packages announced so far, and he's waiting to see what the qualifications of this new application will look like.
"There's a lot of benefits you can apply for, but they're saying, 'If you apply for the benefits you need to close down your business – otherwise you'll get big tax hits at the end of the year,'" he said.
"You're trying to decide whether you choose the benefits and hope to survive on that, or if you stay open and hopefully earn a little bit more with limited services."
Navigating customer order refunds, event cancellations and low foot traffic have been difficult to manage, and there are a lot of unknowns right now, Delaney said.
According to a recent survey from the Economic Developers of Alberta, which saw responses from more than 950 businesses, 43 per cent said they wouldn't be able to stay open for more than a month.
As for immediate needs, 77 per cent of respondents identified understanding grants and financial assistance, while 69 per cent said balancing cash flow and operating expenses.
But one thing Delaney said he does know for sure: small businesses need to stick together and help each other get through. For example, Confections Cake Co. is now offering pickup and delivery for local beer from Endeavour Brewing Company in St. Albert as a way of assisting them.
"It's really easy for small business owners to get discouraged and carry all of this on their shoulders right now, but it's super important for everyone to stay positive. It's a grind – it's a grind small business owners are used to ... but this is out of everyone's control," he said.
"Nobody's business is hurting because they have a bad product or a bad business plan, and they need to know that. They need to reach out to friends, family, their community and other small businesses to ask for help. Talk to your landlords, talk to your banks ... I don't think it would be right for any business to close down because of a pandemic like this, it's nobody's fault."
