Debate grows over whether business subsidies should be extended
As the Oct. 23 expiry date for federal emergency wage and rent subsidy programs for businesses draws near, some are calling for another extension. The programs had previously been set to end at the end of July.
“There’s a lot of my customers that would come back here every two weeks, now I haven’t seen them since the COVID,” said Danny Vuong, who with his wife owns and operates Lucky’s Nails & Spa in London’s Byron neighbourhood.
Vuong says with some regular customers still nervous about coming back to the salon, business is down more than 50 per cent from pre-COVID levels. He said the shop has stayed alive because they’ve been able to access federal government subsidies to help with wages and rent.
Lockdowns have been especially tough, he said.
“I might be in business for a while, but not for long. Because you know, all of our savings, we have to take it out to put it toward the business. Even though we’re not running the business, we still have to pay for rent, hydro, phone bills.”
The Canadian Federation of Independent Business (CFIB) says with the majority of Canadian businesses are still not back to normal levels, and it’s hoping the federal government will extend the wage and rent subsidy programs once again.
“Almost every province now has put in place a passport system -- that’s led to a further drop in sales for many, many small businesses, who are now seeing 20 per cent of their customers unable to visit them,” said CFIB President Dan Kelly.
“These measures, while intended to try to reduce COVID spread, they are having an economic impact, and Ottawa can’t phase out the wage and the rent subsidies, the key supports, at the very same time.”
But if it doesn’t come to an end this month, then when should it? There are those who believe it’s time to turn the federal subsidy taps off sooner rather than later.
Spyro Giannakopoulos, who owns Hillside Restaurant in Kilworth, just west of London, said he believes the subsidies should only continue if there’s another lockdown.
“Businesses have had ample time to prepare and change their model somewhat,” said the restaurateur. “And you have too many businesses just surviving off the subsidies. And you’ve created an unnatural business enironment where you have zombie businesses who aren’t going to be able to make it once the subsidies end. So you’re using taxpayer money to subsidize, in truth, landlords who are getting the rent.”
According to federal government statistics the rent subsidy program has paid out $6.6 billion to date, while the wage subsidy program has shelled out $94 billion.