Devastating Shutdowns During Coronavirus Crisis Hurl Small Businesses Into Uncertainty

TORONTO — Dave Auger’s dream restaurant was days away from its one-year anniversary when he had to lay off its entire staff, including himself — more than 20 people.

817 Sports Bar & Grill in Toronto was already operating on a skeleton crew after all major sports leagues suspended their seasons due to concerns over the spread of the novel coronavirus. It was not a good sign, considering many of its patrons came in to watch games and hang out. 

On Monday morning, Auger got a call that a driver who delivers beer to the bar had tested positive for COVID-19 . 

That, along with the Toronto Public Health recommendation that restaurants stop dine-in service and move to pick-up, take-out or delivery only to minimize community spread of the illness, led Auger to close the bar’s doors on Monday.

On Tuesday, Premier Doug Ford declared a state of emergency . Restaurants and bars are only allowed to be open for delivery and take-out orders, and daycare centres, recreation centres and event venues must shut down.

“It’s gonna be devastating,” Auger told HuffPost Canada in a phone interview. “Especially if this is long-term.”

He said he wants to see compensation for business owners, since insurance won’t cover their losses. He also wants to see higher Employment Insurance (EI) payments for employees . He had hired six new staff last week who won’t be eligible for EI.

“EI doesn’t pay anything ... It’s kind of a joke,” Auger said. “What are we going to do, especially in the city with the cost of living that’s one of the highest in Canada? How are people going to survive?”

Auger estimated his business will lose at least $20,000 to $30,000 a week, plus expenses. Even when restaurants get the go-ahead to re-open, Auger worries about the impact on his bar if professional sports haven’t resumed by that time — as well as the very likely possibility of a recession.

He is not alone. Ontarians who run catering companies, child-care centres and massage therapy practices are fretting over how they’ll stay in business.

Prime Minister Justin Trudeau has promised relief is coming. Federal Finance Minister Bill Morneau announced $10 billion in credit will be available to businesses through the Business Development Bank of Canada and Export Development Bank. And the PM hinted Tuesday that a major announcement on economic measures expected on Wednesday could include tax changes.

Watch: Prime minister promises economic help. Story continues after video.

That’s exactly what Meagan Bowden, the founder of Phancy Food & Catering in Toronto, is hoping for. Her company has lost 95 per cent of its clients — and $10,000 in revenue for March — since last week. She’s relying more on delivery services like UberEats and Foodora to drum up orders, but found those orders have also slowed.

“So far, what the government has announced is undefined and unclear,” Bowden said. “As a business owner who is already stressed about the loss of sales, it’s very overwhelming to read and try to understand what exactly is being offered.”

Bowden started a petition asking the federal government to temporarily exempt independent businesses from paying their 2019 HST and 2020 income tax and to postpone this year’s payment deadline to 2021. The petition has garnered more than 5,000 signatures in four days.

“As you can imagine, the volume of patrons in restaurants and all food businesses alike has decreased significantly — lows like we’ve never experienced before,” she wrote on Change.org. 

“Those who will be most vulnerable to these effects are independently owned businesses that must somehow remain afloat during these times. Rents, insurance, equipment leases, car payments, staff (who haven’t been laid off), and the costs of perishable food that must be purchased in order to remain open are all costs that cannot be avoided or unpaid by businesses. They must also maintain their own costs of living to stay alive.”

The petition also asks for mortgage and rent relief for small businesses.

Lisa Kessig owns Serenity Kneaded, a massage therapy practice in Cambridge, Ont. She closed the clinic Monday after hearing advice from her colleagues and the province’s recommendation to take steps to “flatten the curve.”

The College of Massage Therapists of Ontario emailed its members recommending they suspend all non-essential massage therapy treatments, adding that this aligns with the provincial and federal governments’ social distancing recommendations.

Kessig does not qualify for EI and lives paycheque to paycheque. She took three weeks off in January to recover from surgery, and now estimates her clinic will be closed for at least another three weeks. Her husband was laid off from his job in sales three weeks ago for reasons not related to the pandemic. 

“While Doug Ford and Justin Trudeau have promised small business relief, there has been no indication how that help will come or what hoops we have to jump through to get it,” she wrote in an email to HuffPost Canada. 

She wants to see the government give registered massage therapists breaks on their upcoming HST payments — those who pay quarterly, including herself, have a payment due April 1. 

“I am not going to be able to pay that because I have to choose whether I pay the government or buy groceries,” she said. 

Even not-for-profit organizations say they’re feeling the squeeze. 

Owl Child Care in the Waterloo region has refunded parents for this week and is still paying staff, who are either working from home or off. But the organization, which runs eight child care centres, could lose close to $500,000 in revenue if it keeps that up for the next three weeks, executive director Lori Prospero told HuffPost Canada. 

“That could get to the point where it’s depleting our reserves,” Prospero said. “We want to make sure when this is over with — because we don’t know, is it only going to be three weeks or is it going to be extended — we want to make sure that we still have viability to run into the future.”

Her remote staff is staying in touch with the children they care for, even though they can’t be in the same space, Prospero said. The centres are promoting “virtual story times” on Instagram Live and sending parents activity ideas like a rainbow stew recipe for St. Patrick’s Day.

“Our staff is still sending emails out to let the children know we are thinking of them. It’s really heartening to see that connection even through these tough times.”

Auger, the Toronto sports bar manager, said he hopes to eventually hold a one-year anniversary party.

“Once we are permitted to re-open, and the public feels safe, we will host a big party to celebrate our one year — and maybe how we survived COVID-19.”

With a file from The Canadian Press