Calgary, May 6, 2021 – With Alberta imposing new closure measures on the hospitality, fitness and personal service industries, the current grant program no longer keeps up with the economic and financial damage done to businesses in these industries. In a new study, the Canadian Federation of Independent Business (CFIB) evaluated each of the main provincial grant programs across Canada and found massive gaps and a lack of support to address the third wave of COVID-19 restrictions. In comparison to other provinces, Alberta’s current SME Relaunch Grant checks off the boxes of being expanded with new waves of restrictions, has little red tape, allows new businesses to apply and has broad eligibility requirements. However, with new restrictions imposed on businesses this week more support is needed to get small businesses to reopening.
“Alberta is once again closing businesses in the hardest-hit industries,” said Annie Dormuth, Alberta provincial affairs director. “The Alberta government needs to support closed small businesses in the hospitality, fitness and personal services industries with a new direct grant support similar to BC’s Circuit Breaker Grant. With these new restrictions, the current SME Relaunch Grant is not enough for these businesses to survive until reopening.”
One startling figure included in CFIB’s analysis is that the average Alberta dine-in restaurant has reported having accumulated $330,000 in COVID-19 related debt. This is nearly double the Alberta small business average of $186,000. In total, Alberta small businesses owe $21 billion in COVID-19 related debt.
“After more than a year of lockdowns and restrictions, small businesses have amassed dizzying levels of debt and the relief provinces have provided doesn’t even scratch the surface,” said CFIB president Dan Kelly. “This should serve as a wake-up call to every government—business restrictions and lockdowns place a disproportionate burden on small businesses. Hundreds of thousands are already contemplating closing down for good. As the pandemic extends into a second year, governments will need to do more to help them survive and repay the $170,000 in COVID-related debt the average firm has taken on,” concluded Kelly.
To measure the reach of the provincial programs, CFIB conducted four case studies of how a dine-in restaurant, a small retailer, a dry cleaner and a new gym would fare in each province. In many cases, the grant programs helped cover off less than one-tenth of the new debt small firms have inherited due to COVID-19.
Across Canada CFIB’s evaluation found:
- Closed programs: small businesses in four provinces (Manitoba, Ontario, New Brunswick, and Newfoundland and Labrador) no longer have access to a widely available unconditional grant programs at this time as several have closed their main program despite a growing number of COVID-19 cases and of third-wave restrictions across the country.
- Little support: Several provinces provided very little grant money ($10,000 or less) to small firms hit by pandemic restrictions.
- New businesses excluded: Many of the new businesses that began operations in 2020 have been unable to access any of the federal programs. Based on CFIB’s case study analysis, three Atlantic provinces (Newfoundland and Labrador, Prince Edward Island and New-Brunswick) would exclude a gym started in June 2020.
- Essential businesses excluded: While some provinces provide support to most businesses facing a major decline in revenues, several jurisdictions exclude those that were allowed to stay open but faced a significant decline in sales due to government stay-at-home orders/advice (e.g. drycleaners). Such businesses were unable to get support anywhere except in British Columbia, Alberta and Newfoundland and Labrador.
Small business owners can help by signing Alberta’s CFIB petition calling on the province to provide more support.
For media enquiries or interviews, please contact:
Annie Dormuth, CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 members across every industry and region, including 9,300 in Alberta. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.