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Cause – Save Small Business During COVID-19 CANADA - GENTTA
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THE CAUSE

SAVE SMALL BUSINESSES DURING COVID-19 IN CANADA

*this is campaign is under the cause Vulnerable

“Businesses shouldn’t have to mortgage their future to pay for our collective response to this virus.”

CAUSE SUMMARY

Your local cafe, fitness studio, salon or bar are experiencing an immediate cash flow crisis (CBC News) and will be on the brink of bankruptcy in one month.

With commercial rent payments costing tens of thousands of dollars every month, many businesses can only last one or two months on their personal savings.

Despite the headlines, experts say that government support is welcome and important, but won’t be enough to save many of the companies hit hard by the coronavirus pandemic. (CBC News

Low interest loans from the government are not a realistic alternative! Businesses shouldn’t have to mortgage their future to pay for our collective response to this virus.

“Imagine the government made it illegal to use your apartment. Seconds later, they proudly tell the country that they are supporting you by lending you money to pay rent for the apartment they no longer allow you to enter. You would flat out reject that proposal. That is exactly what Trudeau has done for small businesses.”

Without further government intervention, businesses will have to decide between the following:

  1. Declaring bankruptcy, or
  2. Taking on more debt indefinitely to cover ongoing fixed costs

Canada MUST expand CERB to include businesses that have lost less than 70% of their revenue and MUST make it mandatory for landlords to participate.

Do NOT leave this up to the kindness of landlords. The “Landlord association agrees government needs to step in” (CBC News)

We must “make sure that the rescue package for the economy is a rescue for Main Street, not just for Wall Street” (Peter Hummelgaard, Employment Minister of Denmark The Atlantic).

CONCERN

Small businesses will go bankrupt because they must continue to pay for rent but are not allowed to be open.

HOW

Waive rent for small businesses while they are not allowed to be open.

GOAL

Save small businesses and their owners from financial ruin!

Quote

“Businesses shouldn’t have to mortgage their future to pay for our collective response to this virus.”

YOU CAN HELP!

PRESSURE your politicians to provide rent relief to small businesses.

SHARE & SUPPORT

CAUSE UPDATES

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COVID-19 Recession and Poverty Eradication. JOIN over 36,000 signatures.

Updates – This Cause is Live

Let’s take action… it’s time for change.

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We’ll keep you updated on how you can help.

JOIN THE CAUSE

Be part of the solution by taking action and keeping the pressure ON!

SHARE

Easily share with your community and the media to ignite exponential growth towards saving small business!

Pressure

Apply pressure on politicians and influencers with petitions, emails and phone calls to ensure concrete action.

SUPPORT

Send messages of support and donations to keep your favorite small businesses going.

Top actions to support this cause listed in order of priority. Complete them all to truly support your cause!

LEARN MORE

THE ISSUE – RENT PAYMENTS

Only small businesses that have seen a 70% drop in revenue qualify for rent support. Thus, businesses that have lost 50-60% don’t receive ANY support!

This also discourages businesses from hustling to make any income through online platforms or take-out.

To receive assistance, a tenant’s landlord must be willing to cooperate. The program is NOT mandatory! Many landlords are simply telling tenants – “No. Pay me full rent.”

“Landlords are just saying ‘pay April first and let’s just talk about May when May’s a problem.’ But that’s not good enough,” (Jen and Steve Wall Supply and Demand CBC News)

Commercial rent is significantly higher than most residential rent

For example, a cafe could be paying $6,000/month for just 900sqf or a local gym could be paying $10,000/month for 2,500sqf

With a forced closure (due to a government mandate or Covid-19 related reduction in demand), many businesses will not have the funds to cover more than one payment of rent – by the second payment (May 1st), with rent payments in the tens of thousands of dollars, many businesses will have no savings left and be forced into bankruptcy

THE GOAL

Save “Main Street” by saving as many small businesses as possible. In other words, ensure businesses do not have to mortgage their future to survive the COIVD-19 forced closures.

The Solution

Government support, CECRA, is helping by reducing rent to 25% BUT most businesses don’t qualify.

  1. Expand eligibility for businesses to get rent relief – currently only businesses that have seen a 70% drop in revenue qualify (this also discourages businesses from hustling to make any income through online platforms or take-out)
  2. Make it mandatory for landlords – landlords don’t have to cooperate. Many are just saying – “No. Pay me full rent.”
  3. Defer principal payments on debt and waive interest payments on debt

*Without waiving interest payments, banks are “going to make more money because they’ve just loaned you more,” [Peter Gorham CBC News]. 

To offset losses to landlords:

  • Delay mortgage payments
  • Waive or reduce interest payments

 

 

GO DEEPER

Educate… Only when we are all working with the facts can we come together and support positive change.

WHAT IS BEING DONE
  • CECRA reduces rent to 25% – BUT currently only businesses that have seen a 70% drop in revenue qualify. That leaves businesses that pay 50-69% loss paying FULL rent! It also discourages businesses from hustling to make any income through online platforms or take-out. AND it is NOT mandatory for landlords. Many are just telling tenants – “No. Pay me full rent.”
  • “Experts say [government support] are all welcome and important measures, but won’t be enough to save many of the companies hit hard by the coronavirus pandemic.” (CBC News)
    • *Note: helping employees is important, BUT without supporting small business, there will be no employment for them to return to
  • BCAP (Business Credit Availability Program) – is a program to help cover a businesses costs while revenue is down
  • BCAP is not a realistic alternative for small businesses because it will increase the debt each business carries and is not available to all businesses. Businesses shouldn’t have to mortgage their future to pay for our collective response to this virus.
  • Since each month represents tens of thousands of dollars in debt, and many predictions suggest 8 months of “aggressive social distancing” [National Post], the government is forcing business owners to decide how long they can last.
  • In other words, at what point should they decide to declare bankruptcy because it will take too long (10, 20 or more years) to repay the quickly mounting debt?
  • “European Countries are doing more” (CBC News and  The Atlantic)
ANALYSIS OF GOVERNMENT SUPPORT

Summary – of the Following Canadian Government (from a small business owner’s perspective)…

 

Canadian Government – Economic Response Plan: Support for Canadians and Businesses

 

Temporary Income Support for Workers and Parents:

Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to:

  • Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
  • Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not qualify for EI sickness benefits.

*Small business owners are NOT eligible because they are “self” quarantined, don’t have COVID-19 and are not caring for anyone with COVID-19.

 

Flexibility for Taxpayers

In order to provide greater flexibility to Canadians who may be experiencing hardships during the COVID-19 outbreak, the Canada Revenue Agency will defer the filing due date for the 2019 tax returns of individuals, including certain trusts. 

  • For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020.

*This will help if the small business owes money on his/her personal tax return

 

Supporting Canadian Business through the Canada Account

This will allow the government to provide additional support to Canadian companies through loans, guarantees or insurance policies during these challenging times.

 

*Does NOT apply unless you are an exporter

 

Helping Businesses Keep their Workers

To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.

*This only applies if you are still paying employees. Many businesses have NO income and can not pay themselves. Furthermore, 10% is nothing when a business is making nothing. “European Countries are doing more” (CBC News and  The Atlantic)

Flexibility for Businesses Filing Taxes

The Canada Revenue Agency will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020.  This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period. 

The Canada Revenue Agency will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.

*This is helpful so a business can delay payment of Income Tax due. But it doesn’t help with GST/HST for the first quarter of 2020 when it comes due on April 30th.

Ensuring Businesses Have Access to Credit

The Business Credit Availability Program (BCAP) will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses.

  • *BCAP is not a realistic alternative for small businesses because it will increase the debt each business carries and is not available to all businesses
  • Since each month represents tens of thousands of dollars in debt, and many predictions suggest 8 months of “aggressive social distancing” [National Post], the government is forcing business owners to decide how long they can last.
  • In other words, at what point should the owner decide to declare bankruptcy because it will take too long (10, 20 or more years) to repay the quickly mounting debt

 

 

Additional Info:

Ban landlords from evicting tenants who can’t pay rent during the COVID-19 pandemic [Alberta NDP Leader Notely – CBC News].

RESOURCES & FURTHER READING

FEATURED ARTICLES

CONTRIBUTORS

A special thank you to the people who have worked tirelessly to research, write and update this cause!

 

  • Cause Editor – James Rigby
  • Contributor – Sarah Thompson

ORGANIZATIONS

Here’s a list of organizations that are working to advance the cause.

 

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