Shutdown order will kill some businesses, advocates warn

The provincial order requiring all non-essential businesses to close for the next two weeks could spell the end for some local shops and companies, Ottawa business advocates say.

Ontario, Quebec ordering non-essential businesses closed for 14 days by midnight

A sign in an Ottawa barber shop window indicates the establishment is closed because of the COVID-19. The survival of many small businesses is at risk after the provincial government ordered non-essential businesses to close for two weeks, advocates say. (Adrian Wyld/Canadian Press)

The provincial order requiring all non-essential businesses to close for the next two weeks could spell the end for some local shops and companies, Ottawa business advocates say.

Premier Doug Ford issued the directive on Monday as part of ongoing efforts to prevent the spread of COVID-19.

"It's the right thing to do, but certainly there's going to be a lot of businesses that are going to be hurting because of it," said Dennis Van Staalduinen, executive director of the Wellington West Business Improvement Area (BIA).

"Even in the best case, if businesses are able to open in the next few weeks, there will certainly be some of the businesses that will have to close."

The province released the full list of what it considers essential businesses late Monday night. It includes grocery stores, pharmacies, pet stores, beer and liquor stores, telecommunications service providers and manufacturers, among others. Any business not on the list must close as of 11:59 p.m. Tuesday for at least the next 14 days.

The forced closure is the latest example of how the coronavirus pandemic is wreaking havoc on the Canadian economy, threatening to stifle growth and putting countless people out of work.

Businesses face a 'giant looming cliff'

There are over 550 businesses in the Wellington West BIA, Van Staalduinen said, and most of them closed voluntarily after public health officials began to encourage physical distancing as a way to "flatten the curve," or slow the rate of new COVID-19 infections.

But some remained open, albeit with precautions, their owners hopeful they could weather the storm.

Van Staalduinen said many businesses face a "giant looming cliff" at the end of the month when rent and mortgage payments are due, even as revenues have dried up.

"Many of them are telling me that they're going to pack up, many of them are telling me that they're going to try to fight on, but this is the worst crisis that we have faced since the Great Depression," Van Staalduinen said.

Dennis Van Staalduinen, executive director of the Wellington West Business Improvement Area, says governments need to provide direct financial assistance to businesses in need. (George-Etiénne Nadon-Tessier/CBC)

Many businesses have little runway

Mark Kaluski, chair of both the Ottawa Coalition of Business Improvement Areas and the Vanier BIA, said many businesses only have a few months of runway on which to survive.

"Most businesses don't run on very heavy margins, especially bricks-and-mortar," Kaluski said. "We're looking at one to two months without something significant or dramatic in terms of support or an alternate channel or sales, or [they'll] be out of business."

A member survey conducted last week by the Canadian Federation of Independent Businesses, which represents small-and medium-size businesses, found half of the companies that responded had already experienced a drop in sales. One out of four businesses indicated they would not be able to survive a significant drop in sales for more than one month.

The federal government has announced a series of measures to help businesses stay afloat, including a 10 per cent wage subsidy to help employers continue paying their workers and a $10-billion credit line for businesses.

The subsidy will last for three months, with maximums of $1,375 per employee and $25,000 per employer.

In Ottawa, the municipal government is giving property owners the opportunity to defer payment on property taxes until Apr. 15, with some small businesses able to delay payment until Oct. 30.

Sueling Ching, president and CEO of the Ottawa Board of Trade, said while the measures are welcome, the biggest challenge will be getting money out the door and into the hands of strapped businesses as soon as possible.

"Even though there is appreciation for what the government hopes to achieve, basically, it's all about access and implementation," Ching said. "How quickly, how easily can [businesses] have access to that cash?"

Van Staalduinen said a wage subsidy, loans and tax deferrals are not enough. He wants to see governments offer direct financial assistance to small businesses that have been forced to shut down.

He pointed to the United Kingdom, which is offering £25,000 to some retail, hospitality and leisure businesses, and the United States, where President Donald Trump supports sending cheques to individual taxpayers, including small business owners.

"Our government is not doing that right now, and we very much hope that that's going to be remedied over the next few days, in particular before the end of the month, when it matters the most in terms of the survivability of our main streets and our businesses," Van Staalduinen said.

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