by Morinville News Staff
Monthly bills and mounting debt top Alberta small business worries in a new survey conducted over the weekend by the Canadian Federation of Independent Business.
“Alberta entrepreneurs are scared that the economics of the ongoing shutdown are unsustainable,” said CFIB executive vice-president Laura Jones. “Broadly speaking there are three big challenges—relief is slow coming for bills due now, people are falling through government eligibility cracks, and too much of the relief is in the form of deferrals and loans, which just adds to the fear of coming out of this crisis with a mountain of debt that will be difficult or impossible to repay.”
Rent, being one of the biggest monthly expenses for small businesses was a concern for 65 per cent of businesses paying rent. Fifty-seven per cent said they paid or plan to pay in full for April, and 29 per cent have deferral agreements in place with landlords. CFIB says the majority of remaining businesses surveyed could not pay their rent in full and don’t have an agreement in place.
“April rent was really tough, and many businesses will find May a total nightmare if things don’t change,” Jones said. “Provinces should move to reduce property taxes and introduce a rent subsidy for hard-hit business[es] like those forced to close by provincial essential services rules.”
The business lobby group said it is pleased Alberta has cancelled the 3.4 per cent increase in education property taxes and the deferral of those taxes for six months.
“We hope the measures to support commercial renters Premier Kenney mentioned last week will be announced soon,” aid CFIB Alberta provincial affairs director Annie Dormuth. “These survey results clearly show support in the form of commercial rental relief cannot come soon enough for small businesses.”
Other Alberta survey results relevant to cash flow show 32 per cent of businesses say they do not have the cash flow to cover April bills.
Looking past the COVID-19 pandemic, 62 per cent of businesses do not think they will be able to make up for lost revenues, and 89 per cent are worried customers will reduce or delay spending, even when COVID-19 is over.
Forty-five percent of the businesses surveyed by CFIB are planning to use the Canada Emergency Business Account that will provide up to $40000 in interest-free loans to businesses, with another 20 per cent wanting to use the opportunity but not being eligible. Only 11 per cent said they don’t need it.
CFIB is looking to the feds to make the Canada Emergency Business Account (CEBA) loans available as soon as possible, eliminate the payroll test and make the $10,000 forgivable portion a simple grant that is available quickly with a minimum of qualification criteria and administrative hassle.
They are also looking for provincial governments to Provinces to provide rent subsidies to cover fixed costs of businesses hard hit by the COVID-19 crisis.
CFIB also argues that business owners and the self-employed should be able to have some limited earnings while remaining eligible for the Canada Emergency Response Benefit (CERB).
“If we don’t do a good job helping small businesses survive this today, the cascading effects will be felt for years to come. They are the job providers and creators for millions of Canadians. They are the connective tissue of our communities. Small business really is too big to fail,” Jones said.