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Federal business aid elicits mixed reviews from Nunavut chambers of commerce

Federal funding promises for business suffering under Covid-19 have been numerous but the details are sometimes “very confusing” and not always what they seem on the surface, said Valter Botelho-Resendes, executive director of the Kitikmeot Chamber of Commerce.

“Why didn’t the government simply create a one-step funding system?” asks Valter Botelho-Resendes, executive director of the Kitikmeot Chamber of Commerce.
photo courtesy of Valter Botelho-Resendes

“The promises of funding are made public via the direct-to-public press conferences daily, then sometimes hours later the reality of what was promised comes out with the many stipulations and pre-requisites of the businesses situations,” Botelho-Resendes stated.

The Kitikmeot Chamber has members who are calculating losses in the millions of dollars due to the pandemic, he noted. Some new start-ups have revenues of more than $200,000 but they fail to qualify for assistance because they don’t have tax reports prior to October 2019, he explained.

“Why didn’t the government simply create a one-step funding system?” Botelho-Resendes asked. “Many (chamber) members are applying over and over (answering) virtually the same application questions, just to many different agencies of the federal government… the application process feels like a black hole with no end in sight.

Victor Tootoo, president of the Baffin Regional Chamber of Commerce, said some federal programs are helpful, such as the Canada Emergency Business Account, which extends a $40,000 line of credit with $10,000 of that forgivable if paid off by December.

Victor Tootoo, president of the Baffin Regional Chamber of Commerce, says the federal wage subsidy should assist cash flow to help businesses meet payroll.
photo courtesy of Michel Albert

The Government of Canada’s recently-announced Northern Business Relief Fund is “promising” as it will help with fixed costs for four months but no cash is flowing from that initiative yet, he noted.

What he found most disappointing is the federal wage subsidy program.

“It doesn’t really help with cash flow as it only allows you to deduct the federal income tax component of the business’s regular payroll remittances. With theses subsidies, it will take over a year for the business to realize the total benefit available. By then, there may no longer be a business,” said Tootoo. “I realize the government can’t fully fund all the economic needs of all businesses hit by this pandemic, but something that provides an assistance to cash flow for payroll would have been better than the current structure of these wage subsidies.”

The Government of Nunavut’s $5,000 Small Business Support Program involves “onerous” paperwork and Tootoo wasn’t sure how many businesses would qualify.

Likewise, he said the Qikiqtani Inuit Association/Kakivak Association’s business relief fund “will help some small business owners but not all.”

Botelho-Resendes added that it’s unreasonable for the federal government to expect commercial landlords to forgive 25 per cent of rent.

“Why on Earth would a landlord do that? Many of our members are commercial landlords and, yes, maybe the banks have given them some leeway on payments for now but at some point they will have to pay those mortgages,” he said. “They simply can’t afford loses as some are huge rental amounts a month.”

There’s also a tax burden that lies down the road for hard-hit business that access government aid programs, Botelho-Resendes said.