'Real progress' means helping small businesses access funding, says Ontario Chamber of Commerce

Entrepreneurship and healthy small businesses will be fundamental to Ontario's economic recovery from the pandemic, but will require access to funding as temporary grant and loan programs are close to expiring, according to a new report. 

The report, released Wednesday by the Ontario Chamber of Commerce, calls for upper levels of government to develop policies that would help businesses access grant funding. Many have not been eligible for grants throughout the pandemic.

"We know that Ontario's economic recovery will have to be driven by entrepreneurs that launch and scale their enterprises," Rocco Rossi, the Chamber of Commerce's president and chief executive officer, says in a media statement.

"Even in good times, small business owners encounter challenges at various stages of growth. Real progress can come from redoubling efforts to eliminate barriers and advancing creative solutions to improve access to capital and other resources."

According to Statistic Canada, small businesses make up 98 per cent of employer businesses in Canada. A survey to better understand the impact of the pandemic on businesses found they're expected to be at risk of a decrease in profitability, sales, loss in revenue and more debt. 

In its report, the Chamber of Commerce includes 10 recommendations to help business owners gain access to funds.

They include:

• Incentives for private investments in small businesses, through tax credits.
• A provincial loan guarantee program.
• Implementation of a cost-benefit analysis for all new and existing business financing programs.
• The development of an easy-to-use, information portal for small business owners to learn about grants.

While these are suggestions for a post-pandemic world, some business owners in Windsor and Essex County haven't been eligible for any sort of essential grant funding. 

Elizabeth Matheson, owner of Blondie's Dry Cleaners in Kingsville, applied for a number of provincial and federal grants, but was unsuccessful. The two provincial grants Matheson applied for would have secured up to $30,000 for her business, but she was denied due to ineligibility.

"It's very very difficult," said Matheson. "We've lost a very big chunk of the business. If I had employees and if I had very big overheads, my key would have been at that door a long time ago."

Matheson's business has remained open throughout the pandemic, in part due to it being considered an essential service, but her revenue has seen a steep decline. 

Ineligibility unclear for some

Businesses that launched early into 2020 may have been denied grants as well, due to a lack of past comparable revenue. 

Navneet Bhullar, owner of Butter Chicken Roti, applied for three grants — two federal and one provincial. He said he was denied funding from both the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy. 

Earlier this year, Bhullar applied for the Ontario Small Business Grant. He said he was asked to show income comparisons between January and February of 2020, but his restaurant opened in March 2020, so he was denied funding. 

"The worst thing for our business is we just got started with our business in March of last year," said Bhullar. 

Like Matheson, Bhullar was not given a reason for being ineligible for the grants. 

"The only answer I got was 'not eligible,'" said Bhullar, who then stopped applying for grants.

Funding tries before, after pandemic

According to Ryan Mallough, Ontario regional director of the Canadian Federation of Independent Business (CFIB), businesses that shut down during the pandemic were able to access grants more easily, whereas those deemed essential and remained open face more obstacles. 

"It really comes down to eligibility criteria." 

Mallough said the association has received numerous complaints from business owners who have been severely impacted by the pandemic yet are ineligible for grants. He also received concerns from business owners who have been approved for grants, but are still in limbo, waiting to access the grant money. 

He says federal and provincial governments should extend grant programs to help businesses sustain themselves. 

"If we pull that rug out from underneath small business, so many of them are going to fall right from the outset. They need access to that funding." 

'Revenue drop needed'

However, Sarah Dewar, owner of Maiden Lane Wine & Spirits, received approximately $40,000 in grant funding through the Ontario Small Business Support Grant. 

"We really needed that funding," said Dewar, who opened the business with her husband in June 2019. 

They had applied for federal subsidies, but were denied. 

Dewar said she believed she was eligible due to the significant revenue loss at the beginning of 2020. She says the application required proof of revenue from January to February 2020, and March to April 2020. 

"We basically dropped approximately 90 per cent from January to February and March to April."

The grant funding has helped the couple pay wages for three more staff members and operational costs. Dewar said she intends to put money toward an expansion of the patio and furniture such as umbrellas for patio season. 

"I feel like we're in a pretty good position considering we have been closed for so long," she said. 

"It's given us the reassurance that we're going to be around. If anything, it's just peace of mind that we're not going to have to close our doors."