Hundreds of N.B. businesses in jeopardy without rent relief, says federation

The wheels of the provincial recovery plan are in motion, but many New Brunswick businesses are still at risk of financial peril, according to the local director of the Canadian Federation of Independent Business. 

Louis-Philippe Gauthier, the federation's director of provincial affairs for New Brunswick and Prince Edward Island, said if the current COVID-19 restrictions and related financial support programs remain until the end of May, as many as 36 per cent of its 5,000 members in the province won't survive.

The revelation has renewed calls for greater support for businesses, in particular an expanded or additional rent relief package.

The federation has been polling its members every weekend for the past seven weeks. The latest survey data, to be published Tuesday, indicate 21 per cent of businesses are still open, he said.

Gauthier told Shift New Brunswick on Monday owners are concerned for cash flow and how consumer spending will play out during the multi-phase recovery. 

"It's an unfortunate reality," he said. "The situation has essentially shut down the doors and with no cash coming in, well, businesses only have so much of a cushion."

The latest survey was conducted in the days after the release of the recovery plan Friday. 

The plan first reopens low-contact workplaces and activities, like outdoor recreation, before moving onto "controlled contact" zones, like restaurants and retail, two to four weeks from April 24, barring any setbacks. High contact spaces, like gyms and barbers, are three to four weeks from there if there's no new wave of cases.

The timeline for large gathering spots, like organized sports and bars, has yet to be determined.

Three unrelated community outbreaks in a six-day period may trigger renewed restrictions — something that would be "very problematic" for businesses struggling to survive, Gauthier said.

An operational plan

A detailed guidance document states workplaces must develop an operational plan "outlining how daily operations will be managed to meet the additional measures in this documents." Those include physical distancing, hand and respiratory hygiene, pre-screening for symptoms, signage and enforcement.

Workplaces must establish appropriate cleaning and disinfecting practices, but Gauthier said he's hearing concern it might be difficult for businesses to get their hands on cleaning supplies in this environment.

Gauthier is pleased, however, the government has provided a roadmap for the weeks and months ahead.

"It provides clarity for businesses even though there is a very small amount of businesses, like golf courses and fishing operators, that can start right away," he said. "It gives us a very good insight as to what will be the requirements for businesses when in the subsequent phases."

Rent relief

But the federation is calling the provincial government for more support for businesses, specifically filling gaps in the federal rent relief program.

Prime Minister Justin Trudeau announced Friday a new rent subsidy program to help businesses forced to shut down due to the global pandemic. The plan, to be funded jointly with the provinces, will provide non-repayable loans to commercial property owners to cover 50 per cent of rent payments for April, May and June.

Higgs said New Brunswick will take part in the program.

Gauthier said the vast majority of his members say it's a flawed program and only 28 per cent believe they can qualify.

To qualify, small business tenants must pay less than $50,000 a month in rent. They also must have experienced a revenue decline of at least 70 per cent from pre-COVID-19 levels, or they must have been forced to close down because of pandemic restrictions.

And some members claim their landlord isn't participating, Gauthier said.

The federation — in addition to opposition MPs — was quick to criticize that point after the program was announced.

"As landlords do not have to participate and will be expected to accept some losses under the program, they may choose to ignore it, even if their tenants badly need it," national vice-president Laura Jones said in a statement.

"More help from provincial governments to cover those falling through the eligibility cracks of federal programs is needed to get through this. The limitations of these programs underscore the need to get businesses back in business as soon as it's safe to do so."

The federation's polling suggests 58 per cent of its members nationwide will not be able to pay May rent in full without further assistance.

Gauthier said they continue to push for an amended or expanded program, but, ultimately, he wants to see the New Brunswick government provide a grant program to cover that monthly fixed expense.