Yellowknife businesses have mixed reactions to the federal government’s wage subsidy program for companies negatively affected by the COVID-19 pandemic.
The program will offer 75 per cent of the wages for up to three months for businesses that have lost at least 30 per cent of their revenue, according to announcements from federal officials and government websites. The scheme would be retroactive to March 15.
Rami Kassem, owner of Javaroma Cafe, thinks it’s good that the government is doing something for small businesses, but his losses have been so big he’s not sure the program will help him.
“If you’re 30 per cent down then you can qualify, but we’re 95 per cent down,” he told NNSL Media.
“We laid off 10 people. We still have five people on the payroll where we can’t even afford to pay them. The 75 per cent subsidy means we would have to pay the 25 per cent but we can’t even pay them. So we might have to lay off even more people.
“If I have to lay them all off it will be no stress on the payroll. But I’m hoping to get some business this week so I can at least pay the rent.”
In Kassem’s view, a better solution for businesses like his would include relief on other expenses to take off the financial pressure.
“(It would be good) if the federal government could work out something with the landlord and the city. The best scenario is to get a 100 per cent subsidy from the government and have some kind of deal with the landlord to give us some kind of break for rent. Then it could give us more time.”
Kassem fears his cafe could go bankrupt in three or four months but in the meantime he is pinning his hopes on the online ordering side of the business that he launched last Friday.
“I’m making a few orders a day. It will help a bit but it’s not enough. I deliver them myself and we had a few orders so it wasn't so stressful. And I didn't hire any drivers. But will we make it next month? I’m not sure.”
Overlander Sports faces a very similar situation as Javaroma. It has lost about 75 per cent of its business and the dilemma has pushed the sporting goods store to go online for more sales.
“A lot of small businesses like us are going to have to get really innovative to pay our suppliers, our rent and our taxes,” said co-owner Sandra Stirling.
“We’ve had a website for years but it’s been just to show people what we have in the store. But now we’re getting it running so we can actually sell things through it. Over the next few weeks we’ll be putting things up online that we can sell in April and May online. For us it’s a big thing because we’ve never done it before. We’ve been bricks and mortar until now.”
The business downturn forced Overlander to layoff eight people. Including herself and her husband Bill the store now has six staff members and they’re still doing some sales over the phone, through email and over Facebook and Instagram.
The subsidy program might help them re-hire one staff member, but Stirling said she still has to sort out the details with her accountants.
For the co-owner of Bullock’s Bistro, the subsidy plan is a good idea and could give a boost to the famous fish and chip restaurant that closed its doors on March 17 and laid off all of its staff.
Jo-Ann Martin couldn’t say precisely how much revenue Bullock’s has lost since it shut down but said it hasn’t been making any money since March 17 and was losing about $1,000 a day in early March.
“(The subsidy program is) a fantastic option to be able to keep employees on and pay 75 per cent of their wages,” said Martin.
“But ... We don't know yet about the source deductions like Employment Insurance (EI) and taxes. So will it be 75 per cent or 60 per cent once all the taxes are deducted? We don't know yet. So the company might still be on the hook for the deductions.”
She was still trying to figure out which would be better for her staff: EI or the wage subsidy.
“Whichever would offer them more. It depends on what they would be willing to do. Some of them aren't confident switching from EI to another program. And a few won’t qualify for EI.”
And as good as the program might be, Martin stressed that it’s still early days.
“It'll be another week or so before the programs come out from the government, and then there's a two-week period before it's approved so it could be into the third week of April until we get it. That for us will be a month without income. It's a challenge.”
Sushi North, Ja-pain Bakery
Seiji Suzuki, owner of Sushi North and Ja-pain Bakery, said the 75 per cent subsidy “sounds great” but echoed other business owners’ concerns that it still seems vague.
“The (government) website about the program isn't very clear. But it looks really good. I hope we can apply.”
His two businesses have lost between 60 and 75 per cent of their activity since the pandemic hit but he doesn’t plan to lay anyone off.