New businesses remain ineligible for federal support
Toronto, February 2, 2021 – 70 per cent of businesses say federal and provincial small business relief programs are crucial for their survival in 2021, but many are still unable to access support, warns the Canadian Federation of Independent Business (CFIB).
“Small business owners are anxious to replace subsidies with sales, but with business lockdowns and restrictions still in place across Canada, programs need to be extended and expanded in order to avoid widespread business failures,” said CFIB President Dan Kelly. “Already, one in six business owners is considering permanent closure, and that’s on top of the ones who have already gone out of business. As helpful as the programs have been for many, CFIB’s offices continue to be flooded with calls from small business owners who are struggling to access many of the critical supports. One of the biggest gaps includes the lack of access to federal programs for new businesses that opened in 2020. This needs to change.”
According to CFIB’s latest survey results, two thirds of small businesses (65 per cent) have used the Canada Emergency Business Account (CEBA) and 59 per cent have used the Canada Emergency Wage Subsidy (CEWS). In comparison, only a quarter have used the Canada Emergency Rent Subsidy (CERS) and 8 per cent have used a provincial support program.
While CFIB has spent months successfully lobbying for improvements and changes to each of the government programs, many additional fixes are required:
- Create a pathway for new (2020) businesses and those with no business number to access federal support programs
- Allow businesses that rent from a non-arms’ length entity to apply for CERS
- Allow tenants to use CERS subsidies for rent bills without requiring full payment
- Immediately process all outstanding applications for expanded CEBA loans and consider a further expansion ($80,000/50 per cent forgivable) as the pandemic continues
- Allow small firms with less than $40,000 in non-deferrable expenses to access CEBA
- Make a portion of the new Highly Affected Sectors Credit Availability Program (HASCAP) loan forgivable
- Immediately announce the CEWS and CERS subsidy rates and loss comparison formula for the spring months and extend programs until all businesses are reopened and physical distancing requirements end
- Defer tax deadlines until the end of 2021
“The reality for large groups of businesses, like those that started in 2020, is that they are left out of any support at all. For others, the help is too little too late. More work needs to be done to close these gaps so the programs can help as many businesses as possible survive the pandemic,” added Kelly.
For media enquiries or interviews, please contact:
Milena Stanoeva, CFIB
CFIB, preliminary results for the Your Voice – January 2021 survey, results from January 12 to 18, 2021, n = 4,701. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of +/-1.4%, 19 times out of 20.
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry and region. 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.