Skip to main content

Rent and wage subsidies are set to drop in July, locked down small businesses call on Ottawa to press pause

  • Home
  • Media Centre
  • Rent and wage subsidies are set to drop in July, locked down small businesses call on Ottawa to press pause

Toronto, May 26, 2021 – The phasing out of federal small business subsidies for rent and wages is set to begin on July 3, while small businesses face fresh or renewed lock downs in much of the country, warns the Canadian Federation of Independent Business (CFIB). CFIB is urging the federal government to extend its support programs at their current rates until the economy is fully reopened and Canadians are able to head back to indoor dining, services and activities as well as travel and events.

CFIB’s latest Small Business Recovery Dashboard results show that:

  • Only 54 per cent of businesses are fully open (down from 56 per cent in April)
  • 41 per cent are fully staffed (up from 40 per cent in April)
  • Just 31 per cent are making normal sales (up from 29 per cent in April)

“Small business recovery is at a virtual stand-still and we’re already hearing from business owners who are alarmed about the planned subsidy reductions,” said Corinne Pohlmann, Senior Vice-President of National Affairs at CFIB. “It’s understandable that the government wants to phase out emergency relief programs eventually, but we’re not there yet. Businesses need to know they can rely on federal support until they can get back to regular operations.”

The federal support programs have been a lifeline for small firms – 51 per cent are using the Canada Emergency Business Account (CEBA), 48 per cent the Canada Emergency Wage Subsidy (CEWS) and 29 per cent the Canada Emergency Rent Subsidy (CERS). However, gaps in the programs are leaving thousands of businesses without any support. After the federal support programs, small firms are most likely to rely on credit cards (26 per cent) and personal savings (26 per cent) to cope financially with COVID-19. 

Federal support needs to be expanded, not pulled back
Small businesses have accumulated an average of $163,000 in COVID-related debt since the start of the pandemic. While the programs are helpful, federal, provincial and other government subsidies are covering on average only 31 per cent of the small businesses’ financial shortfall attributable to COVID-19.

CFIB is urging the federal government to continue supporting small businesses by:

  • Extending all of the federal support programs and keeping the subsidies at their current levels until the entire economy can reopen (including Canada’s borders) and all small businesses can once again serve customers in person 
  • Expanding the CEBA loan to $80,000 with a 50 per cent forgivable portion 
  • Making part of the Highly Affected Sectors Credit Availability Program (HASCAP) forgivable 
  • Immediately allowing new businesses to access CEWS, CERS, CEBA and HASCAP 

“Many business owners are in much worse shape now than they were in 2020, after more than a year of lockdowns and restrictions, which are still ongoing in parts of the country,” concluded Pohlmann. “They are hanging on by a thread and face months if not years of recovery once the pandemic is over. Pulling back government support right when they need it most would be devastating.”

Small business owners can sign CFIB’s petition calling on the federal government to extend support programs and close critical gaps.

For media enquiries or interviews, please contact:
Milena Stanoeva, CFIB
647-464-2814
[email protected] 

Source for CFIB data
Preliminary results for CFIB’s Your Voice – May 2021 survey, online survey started May 6, 2021, n = 3,404. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of +/-1.7%, 19 times out of 20.

About 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. 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.