Small businesses face troubling return to ‘normal’ from pandemic
Frustration over confusing messages, staggered deadlines for financial and rent support, and a lack of clarity around COVID-19 support systems.
TORONTO — The co-owners of Coco Beauty Bar were ready to return to business once the Ontario government gave beauty salons a green light, but after seeing the strict COVID-19 restrictions required, they wonder if it’s even worth the effort.
No facials, no microblading, face waxing or threading. And the biggest financial hit – no lash extensions.
“Lash extensions are our moneymaker, and if we can’t do that we’re thinking, ‘What’s the sense of opening up?”’ said Vesna Rosales, manager of the small business in Toronto’s Bloor West Village.
“We’re going to be losing like crazy. We won’t be able to pay full rent for July. There’s no way.”
Rosales and husband and business partner Tim Heffernan consulted the Toronto Public Health website, where he learned they can offer manicures and pedicures, as well as bikini and leg waxes. But he said that will only bring in about 30% to 40% of the usual revenues, at best.
So the couple, who are both in their 60s, broke the bad news to their staff in an e-mail which read, in part: “It doesn’t look good.” Now, they’re asking themselves some big questions about the future of a business they had already considered selling earlier this year, as they planned for retirement.
Much of their frustration can be traced back to federal and provincial governments who’ve bogged down press conferences with confusing messages, a flurry of staggered deadlines for financial and rent support, and what many small businesses and commercial landlords have described as a total lack of clarity around COVID-19 financial support systems and how they apply.
Among the biggest complaints is the lack of co-ordination between the federal and provincial governments over the rollout of the Canada Emergency Commercial Rent Assistance program (CECRA) in May, which was meant to help small businesses keep from going under. Tenancy laws fall under provincial jurisdiction, but it took weeks before there was official response to widespread complaints that some landlords refused to adopt the measures, choosing instead to kick out their commercial tenants. Some provinces introduced bans or restrictions on commercial evictions.
Ontario added itself to that group earlier this week with its temporary ban on evictions, which lasts until the end of August. But that’s two months after the current CECRA support program expires, creating more questions over whether the federal government intends to extend its support for entrepreneurs who are deeply hurting.
A new study released by Royal Bank of Canada found that small businesses accounted for 60% of job losses in the first two months of the pandemic, twice as many as in the 2008-2009 recession.
Canadian Federation of Independent Business president Dan Kelly has called for broader financial support measures that last longer. He believes without a clear roadway to recovery, most business owners can only focus on short term uncertainties.
“Everybody was of the view that if… (small businesses) were closed for a few months, government provided support, we reopened and things would back to normal, no harm no foul. But unfortunately that’s not the world we’re living in,” he said.
“The CECRA program is ending before many of them are even back, and so the need for support to cover rent for shuttered businesses remains of critical importance to many, because they don’t see the light at the end of the tunnel.”
More than 5,500 small business tenants were approved for CECRA as of June 8, according to data provided by the House of Commons finance committee on June 11. Kelly suggests that figure is a “drop in the bucket” compared to the 400,000 to 500,000 businesses the CFIB estimates qualify for the program.
Other small business owners are in similar situations due to a variety of restricted services, and many will have to consider whether it’s worth staying in business with reduced operations.
Tattoo parlours can pierce ears, but they can’t decorate faces or necks. Barbers can cut clients’ hair, but they can’t shave beards. And salons can’t offer hand or feet massages.
Rosales hopes for the sake of her business, provincial and municipal leaders will see the importance of returning to regular routines with COVID-19 precautions in place. She said offering a limited menu of mani-pedis won’t be sustainable.
“We’ll be sitting there waiting for people to come while we have to pay for all the bills – salary, rent, utilities and whatever else,” said Rosales. “We’ll be taking it out of our own pocket.”