NWO tourism operators welcome CEWS changes but warn more help is needed
Some say FedNor needs to beef up its Regional Relief and Recovery Fund.
Seasonal tourism operators in northwestern Ontario, who rely on business from American travelers, say they welcome changes to the Canada Emergency Wage Subsidy (CEWS), but they still need more help to weather the pandemic.
The government passed changes to the wage subsidy on Monday that extend the federal wage subsidy to December and calculate the subsidy in relation to a business' revenue declines.
Previously, it covered 75 per cent of wages up to a weekly maximum of $847 for eligible companies and non-profits. Companies had to show a 15 per cent drop in revenues in March and a 30 per cent drop in revenues after that to qualify.
Some northwestern Ontario tourism operators have used the subsidy to retain essential staff, including pilots for fly-in fishing and hunting trips.
The president of the Northwestern Ontario Air Carriers Association said he welcomed the extension to December but remains worried that some operators might not be eligible for it through to the end of the year.
Little revenue since last year
"I do have concerns that… [in] later stages of the year, November for instance, we might… not qualify," said Josh Varickanickal, who also owns Canadian Fly-In Fishing.
To date, the government has measured companies' monthly revenue declines against its revenues in the same month in 2019 or against an average of its January and February 2020 earnings.
In both cases, those numbers can be zero for seasonal operators in the off season, Varickanickal explained.
What's really needed, he said, is an expansion of FedNor's Regional Relief and Recovery Fund (RRRF), which provides interest-free loans of up to $250,000 to cover around six months' worth of expenses.
Fly-in tourism operators have high expenses, and they've barely seen any revenue since October of last year, Varickanickal said.
"With a seasonal business you don't need a six-month bridge. You need like a one-year bridge," he said.
High costs, high risk
"With two aircraft, the insurance bill alone comes in at approximately $40,000 for the aircraft, so you know, to keep these businesses going really for a year, we're looking at somewhere between $250,000 to $500,000 for, you know, the largest operators," he said.
The president of Canoe Canada Outfitters agreed that companies like his need more support. Jeremy Dickson said he'd like to see the recovery fund restructured to reduce the risk associated with it.
"Outfitters tend… to be leveraged," he said. "Taking on more debt is also scary. So, you know, we would hope that some of that might come through… forgivable loans or, you know, grants or something like that," Dickson said.
Right now, 25 per cent of a loan is forgivable if a business meets certain repayment conditions, but only up to a limit of $10,000.
Dickson praised the government for waiving user fees for operators this year, including their bear management area fees and land use permits – all of which he said relieved a lot of stress.
Revenues down around 90 per cent
The co-owner of Clark's Resorts and Outposts offered other possible ways for the government to help companies like hers, including refunding their 2019-2020 HST payments or providing direct compensation for lost business based on a percentage of average annual revenues.
"The government has shut down our business by shutting down the borders - which I get. We don't want COVID up here," Karla Clark said. "But since they have essentially put a stop to our business for this summer, we need compensation."
Clark and Dickson both estimate that their revenues are down at least 90 per cent over last year.
Varickanickal, whose organization represents 25 members, 80 per cent of whom are tourism operators, said that figure is typical of his membership.
The MP for Thunder Bay – Rainy River has been advocating for an expanded RRRF to meet the needs of tourism operators, he said, and he's asked FedNor to make grants available.
Government funding limited
But Marcus Powlowski cautioned that the government has limited funds.
"We'd like to give them grant money," he said, "but what you give northern Ontario, places like the Niagara Region or B.C. or other places that are heavily dependent on tourism, they rightfully [say]. "Well what about us?'
"And so, if we were to give grant money for all the big tourism operators and the big hotels and like Niagara Falls that are also hurting because of the border closure, that would be a lot of money," Powlowski said. "I'm doubtful whether we have enough money to do that kind of thing."