Today’s Menu, a Toronto-based prepared-meal service, has temporarily closed its retail shop but been flooded with orders for home delivery.Christopher Katsarov/The Globe and Mail
Today’s Menu, a meal delivery service, is asking customers for their patience during the coronavirus crisis.
The Toronto-based business is temporarily closing its retail store, limiting deliveries to the city’s M postal code and suspending service to condos, apartment buildings and office towers where large numbers of people live and work.
“Our site has been on hold for a few days as we needed to catch up, restock and breathe. We have been working around the clock!” the company told clients in an e-mail on Friday. “Public health and safety is our number one concern.”
The company is far from alone. Social distancing – while necessary to stop this pandemic – is taking a devastating toll on small businesses. Sales are plummeting as once bustling restaurants, clothing shops and nail salons lie vacant and business owners make agonizing decisions about their staff.
While the federal government announced measures that will provide some relief, more urgent help is needed if there is any hope of stemming mass layoffs and keeping these otherwise healthy businesses afloat.
Roughly two-thirds of smaller business rely on face-to-face sales. By Ottawa’s own reckoning, smaller companies constitute the vast majority of employer businesses in Canada, providing nearly 70 per cent of private-sector jobs.
“You can feel the stress on the part of the business owner in trying to do often mutually conflicting things like making sure they protect the safety of employees, making sure they’re able to pay their employees, making sure they’re able to serve customers and protect the future viability of their business," Dan Kelly, president and chief executive of the Canadian Federation of Independent Business, said in an interview. "That’s a heavy, heavy load.”
The CFIB estimates the average cost to small businesses affected by the economic impact of coronavirus is $66,000, based on a survey conducted last weekend. Logic dictates that the economic toll will increase in the months ahead.
So what more can Ottawa do in relatively short order to relieve the financial stress on smaller businesses? Quite a bit, actually.
It can start by expanding the wage-subsidy program for small businesses announced earlier this week. The current plan is for the federal government to fund 10 per cent of wages for small businesses over the next three months.
That cap is ridiculously low. In Denmark, for instance, the government is covering 75 per cent of wages if a company can keep an employee on its payroll. In Britain, the government is bankrolling 80 per cent of wages for companies that are able to save jobs.
Canada should immediately implement comparable funding levels for wage subsidies, while also lifting the current limit of $25,000 a business. As reporter Patrick Brethour discovered, a company will get the maximum $25,000 subsidy when its three-month payroll tops $250,000 – which, let’s face it, is not that much.
There are other common-sense actions that Ottawa can take, including scrapping the planned increase to the federal carbon tax on April 1. The CFIB and the Business Council of Alberta both made that plea this week.
Nixing that increase will help small businesses across the country – not just those that provide services to the oil patch.
As Mr. Kelly points out, roughly half the cost of the carbon tax is borne by small- and medium-sized enterprises. Existing consumer rebates may help entrepreneurs as individuals, but they do nothing to help their businesses.
Similarly, Ottawa should shelve increases to Canada Pension Plan payroll contributions that are scheduled for next year, he said. That is not an unreasonable ask given that Canada is facing a protracted economic slump.
The Trudeau government also needs to work with major banks to provide more breathing room to small businesses on their mortgages, lines of credit and other loans. Although financial institutions are providing help, such as deferred loan payments, on a case-by-case basis, they cannot provide blanket relief without creating excessive risk to the financial system.
Perhaps Ottawa should consider backstopping at least a portion of the banks’ small-business loans, on a temporary basis, to prevent them from reducing credit lines or calling loans.
Emergency measures such as these would go a long way to relieving at least some financial stress for entrepreneurs, who are scrambling to save as many jobs as possible.
“I care a lot about our staff. They are like family to us,” said Sarah Keenlyside, co-owner of restaurant La Banane and CXBO Chocolates in Toronto. Although she has shuttered both storefronts, she is working on an online menu for the restaurant and focusing on web sales for the chocolate business ahead of Easter.
“Having jobs for people to come back to is our No. 1 priority."
With a report from Patrick Brethour