Close small business aid loopholes: Conservatives

Conservatives say some small businesses falling through the cracks of federal aid programs

The Conservative Party is calling on the Trudeau government to close loopholes in aid programs for small businesses and workers coping with the COVID-19 pandemic.

Opposition Finance and National Capital Commission critic Pierre Poilievre said in a Sunday press conference that his party supports the emergency aid being offered to small businesses, but said some are falling through the cracks.

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He also raised fears that, as provinces begin to reopen their economies, federal programs may actually act as a disincentive to reopening businesses.

One federal aid program for small business is a rent supplement for those businesses that have been forced to shut down or otherwise have lost revenue as a result of pandemic containment measures.

The Canada Emergency Commercial Rent Assistance program offers forgivable loans to cover 50% of three months’ rent.

Those businesses that have been able to stay open, but which have nonetheless seen a dramatic decrease in revenue, may not qualify.

“The recent rent policy the government announced is punishing businesses who kept their doors open,” Poilievre said. “Many of them have had a 50% drop in their revenue, but because they have not dropped the full 70%, they will not get any assistance with their much needed rent.”

He also said the Canada Emergency Response Benefit “punishes people” if they work more than eight days per month.

“The same for the recently announced benefit for students,” Poilievre said. “They are being banned from working more than eight days at minimum wage.”

He said there are “nonsensical rules” in some of the federal programs, like the Canada Emergency Business Account. It provides a $40,000 interest-free loan for small business. But it requires the business to have a commercial bank account. Many small businesses only have personal bank accounts, Poilievre said.

“Many real estate agents only operate with a personal chequing account,” Poilievre said. “They are banned from having access to the emergency response benefit because they are using a personal chequing account.”

He added there are many new family businesses that don’t have a payroll. Their family members “work for free in exchange for equity in the new business.”

“Because they do not have the required $20,000 payroll, they cannot access this urgently needed $40,000 government-backed interest free loan,” Poilievre said.

Poilievre recommended three policy changes to close the loopholes:

  • allow businesses to use personal chequing accounts to access emergency loans;
  • family owned businesses with no payroll, but with $100,000 in revenue, should qualify for emergency loans; and
  • eliminate the requirement that businesses lose 75% of their revenue to qualify for emergency rent relief.

“What the government should do is remove these penalties, send the assistance… but don’t make it contingent on people shutting down their work and their business,” Poilievre said.

He added that some of the regulations could become a disincentive to restarting businesses, once that starts happening across Canada.

“For example, if businesses open in Saskatchewan, but the government of Canada tells them you can’t open and start attracting revenue or you’ll lose your rental subsidy, then many businesses will effectively be banned for financial -- rather than public health -- reasons from going forward and working,” Poilievre said.

“The same goes for the emergency response benefit. Many working class people would love to go out and do, say, 15 days of work a month. But now the federal government has banned them from doing that by threatening to take away the emergency response.”

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