Waterloo region restaurants, food producers turned to emergency funds to navigate 'craziness' of COVID-19

Jim Eby, Conestogo-based farmer and milk producer, has navigated the pandemic with minimal disruption to sales at Eby Manor Golden Guernsey Milk.

But he had some help. He took advantage of wage subsidy assistance that helped him weather the storm. 

"It was important to the business. We hire a fair number of part-time staff," Eby said of the Canadian Emergency Wage Subsidy (CEWS). 

Across the spectrum of the food and beverage industry, Eby is one of the fortunate ones.

"I'm happy with where we are with our retail, but the food industry operates on lower margins than other industries. Any assistance helps," he said.

Restaurateurs have had a different set of variables to deal with: a lockdown, limited capacity in their dining room and winter's coming. Given those realities, it's likely many restaurants in Waterloo region applied for the CEWS wage subsidy.

With thin margins, restaurants have a tough time finding financial assistance in the best of times. Tim Borys of Lancaster Smokehouse says they applied for as much assistance as they could. 

"We've used any government programs made available to help navigate this craziness," said Borys. 

Applying for funding takes time

Another program accessed by local businesses is the Canadian Emergency Business Account (CEBA): it has distributed $30 billion in loans to over 750,000 businesses across the country.  

Even though he didn't face the pressures felt by other businesses, Eby notes it's a time-consuming process to wade through the details of the applications. One Waterloo region-based farmer, who wished to remain anonymous, cites precisely such an obstacle. 

"I was unsuccessful applying for CEBA but did access some funding through the Waterloo-Wellington business association. The honest truth is that for most of the programs, you need lots of time for applications. I'm a self-employed, one-man show, so there isn't much time to sit for hours and jump through government hoops," the farmer said.  

A program such as the Regional Relief and Recovery Fund is difficult for restaurants to get, especially if don't have major assets like real estate in their portfolio.

At Barrie's Asparagus Farm and Country Market near New Dundee, Tim Barrie accessed some financial assistance but is quick to point out that it didn't cover the cost of increasing his staff at harvest time. Another small business loan helped him purchase a coffee roaster for the store, so he could add a new revenue stream.

"Coffee production is up 50 per cent with people now working from home. The loan gave us 80 per cent of a new roaster. Without it, I would have held off due to uncertainty," Barrie said. 

Figure out how to navigate through winter

Ajoa Mintah of Four All Ice Cream survived the lockdown period just about at the time she added a bricks-and-mortar store in uptown Waterloo. Mintah says she applied for three programs (CEBA, a BDC loan and CEWS) and says they "were incredibly helpful" while her business focused on wholesale and online revenue. Accessing funding was a little more difficult because of the recent addition of the store. 

"CEWS was interesting. They do a comparison between your sales from this year to last year, and I didn't have a retail store last year. But we did get some help for April and May," Mintah said. 

As a seasonal business, Mintah said Four All doesn't make money in March and April, just when COVID-19 reared its ugly head.

"But we had a great summer, and now we're trying to figure out how to navigate through winter," she added. 

Small, medium businesses can adapt quickly

At major grocery stores, consumers noticed the empty space in sections of their favourite meat counter: there was always a robust supply of meats from the farmers' end, but when processing plants were shut down there was a bottleneck in the supply to be processed.

The federal government put $77.5 million into the sector via the emergency processing fund to help processors adjust and implement safety protocols for workers to help them stay operational. It took weeks for facilities to catch up. 

Major processors like Cargill and JBS being closed down caused much of the bottleneck, according to Franco Naccarato, executive director of Meat and Poultry Ontario. He adds that the temporary closures, and fact of the necessary assistance programs, should draw our attention to the fragility of a system where two companies process 75 percent of the nation's beef. 

"COVID-19 didn't create these problems. It highlighted the problems that have existed. We need more production facilities," says Naccarato.

The concentration and conglomeration of meat processing facilities into a few large operations in Canada is problematic. But in St. Agatha, Charles Quality Meats is one exception to the rule: they didn't need financial assistance because of a rare combination of assets at their disposal.   

"We were lucky to have our store when the farmers' markets were closed. We have our own livestock and our own processing plant, so we had no issues with product and the prices didn't change," said Tony Lobrutto of Charles Quality Meats. 

It's an example of the importance of regional food systems, according to Naccarato.

"Small and medium-sized businesses can respond more quickly and adapt and change," he said.

The chickens will come home to roost, and the loans that helped keep businesses afloat will need to be paid back in the future. Businesses are hoping they can maintain the sales they need to stay alive several months from now. 

"I don't know how it will shake out," said Eby. "I understand the importance of abiding by the safety rules, but I hope we don't need more restrictions placed on businesses moving forward, or a lockdown. That would be devastating."