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The worst of the pandemic may be over but its negative effects on businesses lingers.
As the deadline to repay federal loans taken during the pandemic approaches, a coalition of business owners and associations is asking for an extension.
They say sales are not back to pre-COVID-19 levels and without workers in offices, the downtown and mainstreets are teetering on the edge.
Steve Schreter’s apparel store has been a successful venture for nearly a century. But during the pandemic, business ground to a halt and sales took a hit.
The Canada Emergency Business Account (CEBA), the federal government’s pandemic loan, was a reprieve.
“That was clearly very helpful. Business started to come back but somehow it’s never the same,” Schreter said.
Schreter says that with lower sales, having to hit the January 2024 deadline to repay the loan is daunting.
“I would say break it up over the next four years and let it come back in chunks like that,” Schreter said.
Schreter is not alone.
Tasha Morizio is part of the International Downtown Association Canada (IDA Canada), a national coalition representing more than 500 business associations calling for more time to pay back the loan. An 18-day extension was recently granted, but Morizio says it’s not enough.
“When you’re looking at staff shortages or operational costs, inflation … everything has impacted these small businesses and $40,000 is a lot of money for them. This isn’t pocket change. This is really make it or break it when it comes to small businesses,” says Morizio, Quebec’s delegate for IDA Canada.
High vacancy rates are also having an impact on small businesses, hitting main streets like Saint-Laurent boulevard and Montreal’s downtown core, where there is an estimated 18 per cent vacancy rate.
Business leaders are calling for the government to step in.
“We should have a national downtown strategy at the federal level that should involve many elements: one is about economy, one is about social needs, one is about security needs,” said Michel Leblanc, president and CEO of the Chamber of Commerce of Metropolitan Montreal.
Leblanc refers to addressing growing homelessness issues downtown and ensuring it’s safe, all in a co-ordinated effort with the province and the city.
Real estate broker Jean Laurin agrees, adding that bringing workers back downtown is an important part of the solution.
Laurin says managers are investing in making the office a more attractive place.
“They’re looking at the physical environment, how do we dress it up? What should we provide the employees as far as amenities, as far as equipment?” Laurin explained.
He says downtown Montreal is going through a transformational period.
Construction to revamp Sainte-Catherine and upcoming new REM stations are expected to bring more people back to the area.
Meanwhile, Canada’s Finance Ministry told Global News business owners like Schreter have multiple options and until 2026 to repay their loan.
But that would mean they no longer qualify for partial loan forgiveness of up to a third of their debt.
Something Schreter says is crucial.
“Our government has been there to support small businesses, both during the pandemic and into the recovery. We have twice extended the partial loan forgiveness of the CEBA programme, which delivered over $49 billion to nearly 900,000 small businesses and non-profits across the country, including in Montreal,” wrote Katherine Cuplinskas, a spokesperson for the office of Canada’s Finance Minister Chrystia Freeland.
“We are lowering credit card transaction fees, have decreased the small business tax rate, and are enhancing the Canada Small Business Financing Program. Ensuring Canadian small businesses continue to thrive is a priority.”
© 2023 Global News, a division of Corus Entertainment Inc.
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