Edmonton

Edmonton small businesses hurting due to COVID-19 shutdown

Small businesses in Edmonton are struggling even as federal and provincial governments work to ease economic pain from COVID-19.

New $82B federal aid package offers some relief but worries persist

Arif Bijani, owner of downtown coffee shop Cookie Love, says COVID-19 has reduced his business traffic by around 80 per cent. (Stephen Cook/CBC)

Small businesses in Edmonton are struggling even as federal and provincial governments work to ease economic pain from COVID-19.

Arif Bijani owns Cookie Love in Edmonton City Centre. In recent weeks, traffic has fallen by 80 per cent.

"I bought this business last month," Bijani said Wednesday. "When you buy a business, you put so much money into the business — you don't have anything to spare."

Bijani's coffee shop is just one small Edmonton business feeling the effects of the coronavirus shutdown. While Wednesday's announced $82-billion federal aid package may offer some relief, many are still facing an uncertain future.

Ottawa's aid package includes the creation of the Business Credit Availability Program, which will allow for government corporations to provide $10 billion in additional support targeted at small and medium-sized businesses. 

But Bijani said it's tough to know how and when the programs will affect his business — and time is of the essence.

"I'll be lucky if I can survive like this for a month," he said.

Bijan said he has laid off one employee and significantly reduced the number of hours for the other. He's working 10 to 12 hours a day to keep the shop open and his wife has been coming in to help. But they also have to care for an eight-year-old daughter now out of school.

"I totally understand everybody's in the same boat, but I don't know," he said. "We're still going down the road, there is no stability or we don't know when we're going back to normal."

One immediate measure introduced Wednesday is allowing businesses to defer payment of income taxes without interest or penalties until September.

"I'm not paying now, but I'm paying after six months," Bijani said. "So for the time being it's relief, but long-term I'm still paying."

Prime Minister Justin Trudeau described the government's aid package as the "first phase" of planned measures.

'I know that they'll be OK'

Northeast Edmonton restaurant Otto Food & Drink closed its doors Monday, a day before the province declared a state of public health emergency and set restaurant occupancy limits to the lower of either 50 people or 50-per-cent capacity.

"To me, that's not good enough," said owner Edwin Donszelmann.

Seeing a full restaurant Sunday night scared him, he said. "So that was the reason that we just decided to close."

The restaurant seats 54 and on a busy night would staff two servers and someone at the bar, plus the regular complement of kitchen staff. It is now serving takeout but that still means fewer shifts for Donszelmann's dozen employees.

He hasn't laid off any staff and should be able to hold onto his staff through to the end of the month, he said.

"Fingers crossed there's another paycheque two weeks later," he said.

Recent measures open employment insurance to those who normally would not be eligible. The federal government is also setting up an Emergency Care Benefit for workers who still do not qualify and are facing unemployment.

Donszelmann said access to those programs gives him peace of mind should he need to let anyone go.

"If we don't have quite enough work, I know that they'll be OK," he said. "It's a massive relief for me."

Premier Jason Kenney has also announced payments for self-isolating workers until the new federal measures take effect in early April.

Albertans will be able to apply for $573 per week in provincial aid for a limit of two weeks. The money will be deposited to their bank accounts within days.

Massage therapist Sandra Strangman said she's not sure how the new aid package might affect her.

"It'll be the first time in 28 years of my business that we receive any assistance," she said.

Sandra Strangman owns Body Balance Therapeutic Massage & Acupuncture in west Edmonton. But the eight massage therapists who operate out of the space are each their own independent contractor, including one now struggling to leave Spain as Canada prepares to severely limit international flights.

"Under circumstances like this, many small businesses that are independent, not just massage therapists … are very much hit by this," she said. "They'll just fail and that'll be it."

Strangman said she and the other massage therapists at Body Balance decided to voluntarily close down earlier this week.

While the Emergency Care Benefit promises to provide for workers who still do not qualify and are facing unemployment, Strangman said wording will be key.

"In our case, people still have space to work, still have to pay for it," she said. "Is that considered unemployed if you can't work for two weeks?"

'Every business is going to be impacted'

At Edmonton advertising agency Berlin, the 10 salaried staff members are now working remotely and still have work queued up for the foreseeable future. 

But even though professional services are feeling the impact less than front-line retail or hospitality, company partner Justin Archer said everyone will feel the pinch of a slowed economy.

"I think when the economy slows down as fast as it is, every business is going to be impacted by this," he said.

Archer said while there are positive aspects to the aid package, governments should be even more ambitious to prepare for a post-pandemic world.

"I don't think government should spare any expense to make sure that, economically, there's something to come back to."

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