N.S. businesses worry province's financial relief measures won't save them
'All of the burden is placed on the small businesses'
Dozens of small business owners in Nova Scotia say the emergency measures put in place to help them weather the COVID-19 crisis will only drive them deeper into debt and eventually out of business for good.
The most urgent financial demand they're currently facing is rent, which is due April 1.
The province has announced a rent deferral program, but Lara Cusson of Café Lara on Halifax's Agricola Street is giving it a low rating.
"All of the burden is placed on the small businesses, and honestly, most will not be able to recover," she said.
Cusson has laid off all 11 of her staff and like every other small business owner in the province she has no idea when business will return to normal.
What she does know, she said, is that taking out a loan — even an interest-free loan — won't help.
On Friday the province announced a three-month rent deferral program. Under its terms, commercial landlords can allow their tenants to hit pause on rent payments until July.
The tenants aren't off the hook completely — they'll have to pay those three months back sometime within the term of their lease.
Meanwhile the province will step in with $5,000 per month for landlords, if the tenant fails to pay.
But Cusson said the province didn't consider the impact on the tenants.
"If we're not collecting that [business] revenue, where are we getting that money from to then pay our landlords that rent?" asked Cusson. "The landlords can make their mortgage payments and the banks are fine. So no one else in the chain is affected."
Longer closures a risk
Cusson says there's no way to know how long the restaurant closures will remain in effect. And she worries that if it's another three or five months, there's no way businesses like hers will reopen.
"Why would we borrow money to be closed?" she said.
Cusson says the rent deferral program is all about protecting landlords — not the tenants like her who have had to close their doors and lay off staff.
Craig Flinn, owner and chef at 2 Doors Down on Barrington Street, is in the same boat at Cusson.
He closed his operation on March 17. Since then, he's been looking over the terms of the new Canada Emergency Business Account, which offers small businesses like his interest-free loans of up to $40,000.
"It really does seem that — for the small business owners — the only way out is to take a loan out from a bank. And that's certainly not a help to us," he says.
"It's just going to make it more difficult for all of us across this country to open our doors and take all our staff back and get back to normal when you have an incredibly increased debt load in a market that is going to be very uncertain."
Premier says tenants should talk to landlords
At Monday's briefing, Premier Stephen McNeil urged the tenants to talk this through with their landlord.
"[The rent deferral program] was to ensure that landlords walked in and treated their tenants with understanding," the premier said.
"The fact that their revenue has been cut off. That they need the ability to get up and get started. They need the ability to get their staff and clients back together. And in order for them to do that they need to be able to spread out some of these expenses over a period of time and that's what the whole idea behind rent deferral was all about."
More than 100 small businesses in the province have emailed Cusson to support her call to the premier to find a way for banks and landlords to better share the burden.
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