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TRANSCRIPTION WITH SPEAKERS
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[00:00] SPEAKER_01: It's the Canada's podcast network. Hello and welcome to Canada's podcast network. I'm your host Mario Toneguzi
[00:06] SPEAKER_01: And joining me today is Dan Kelly president of the Canadian Federation of independent business. Thanks for joining us today Dan
[00:13] SPEAKER_00: Happy to be here
[00:15] SPEAKER_01: Okay, well, we've got one heck of a ride going on these days in in the business community and in the world
[00:23] SPEAKER_01: Tell me what you're hearing from members these days is this
[00:27] SPEAKER_01: For for being an entrepreneur. Is this the worst
[00:31] SPEAKER_01: Situation that they've ever been experience to
[00:34] SPEAKER_00: Well, that would depend on the business, but yes as in on the aggregate basis
[00:38] SPEAKER_00: I can tell you that in 26 years of working directly with and for small business owners across the country
[00:45] SPEAKER_00: I have never seen a set of circumstances like this where essentially
[00:50] SPEAKER_00: An entire swath of the business community is
[00:53] SPEAKER_00: Is having the the legs kicked out from under them all at once
[00:58] SPEAKER_00: We have tons of sectors of the economy that are essentially shut down
[01:03] SPEAKER_00: With waves of additional sectors being affected essentially by the hour
[01:10] SPEAKER_00: And that's obviously with with provinces now legislating that essentially a complete shutdown of their business community other than essential services
[01:20] SPEAKER_00: The the toll is is massive. It's having an effect of course on on business owners in terms of just their morale
[01:29] SPEAKER_00: But the decisions that they're being forced to make and make very quickly have massive
[01:34] SPEAKER_00: massive implications for the economy as a whole I really feel for these guys
[01:39] SPEAKER_00: I mean, I've been talking to tons of independent business owners who have been running successful companies for years and years to
[01:45] SPEAKER_00: thick and thin all sorts of lops and downs who are in tears on the phone with me talking about their employees
[01:53] SPEAKER_00: And what they're what they're essentially being forced to do
[01:56] SPEAKER_00: Business owners trying to balance the needs to keep their employees safe with the needs to keep them paid the need to keep their
[02:02] SPEAKER_00: customer served and finally the need to ensure that the business at the end of this crisis
[02:07] SPEAKER_00: Will come up the other end and and and be able to be there
[02:11] SPEAKER_00: For themselves and of course for the staff and communities
[02:14] SPEAKER_00: That's an awful lot for business owners to have absorbed in in matter of a couple of weeks
[02:20] SPEAKER_01: When you look at at this crisis
[02:22] SPEAKER_01: Obviously the longer it lasts the the more pronounced it's going to be and the more impact it's going to have
[02:29] SPEAKER_01: What is your guess of like how many businesses are going to be able to survive this?
[02:34] SPEAKER_00: Well look Canada has 1.1 million
[02:37] SPEAKER_00: businesses with paid staff if you include the self-employed in that mix there's probably another 2.5 to 3.5 million
[02:45] SPEAKER_00: Canadians that earn their income on their own
[02:49] SPEAKER_00: So we're talking millions and millions of people when you include the staff complement in small medium-sized firms
[02:55] SPEAKER_00: Of course, it's an order of magnitude larger than that
[02:59] SPEAKER_00: I don't see you know last week there were half a million Canadians that lost their jobs
[03:03] SPEAKER_00: I don't see this week how that's going to be any smaller than a million Canadians losing their jobs
[03:09] SPEAKER_00: And behind every one of those employee ease is an employer
[03:13] SPEAKER_00: We are seeing optimistically there will be thousands and thousands of businesses that just don't make it
[03:19] SPEAKER_01: At the end of this crisis now Dan when you know, I know about prior to this small businesses were were challenged before any of this came about right and so
[03:30] SPEAKER_01: Many of them had lots of cost to bear right whether it's property taxes which seems a big issue of
[03:38] SPEAKER_01: Sad right so many of these were already on the brink of losing it right this is just going to push many of those out
[03:46] SPEAKER_00: Well look I've represented through the Canadian Federation made a bit of business
[03:50] SPEAKER_00: I've represented small businesses for 26 years as I was saying and in good times
[03:56] SPEAKER_00: There are a lot of businesses that go out of business every every single year because they're entrepreneurs and they're trying risky things
[04:03] SPEAKER_00: And sometimes the risks pay off and sometimes they don't yeah in other areas of course
[04:07] SPEAKER_00: There been economic conditions that have taken the wind out of the sales of the business community
[04:11] SPEAKER_00: Of course in Western Canada resource dependent provinces that's been going on now for several years
[04:17] SPEAKER_00: Then we've had other economic shocks just in the course of 2020 so far like the rail blockades
[04:23] SPEAKER_00: It really did set a huge number of businesses back
[04:26] SPEAKER_00: Governments of course for the most part adding not subtracting from the burden of of business community
[04:33] SPEAKER_00: running up giant deficits in good times
[04:37] SPEAKER_00: And now we're finding ourselves caught short
[04:40] SPEAKER_00: But right now all of that essentially doesn't matter
[04:44] SPEAKER_00: Right now everybody is focused on how do we
[04:47] SPEAKER_00: Despite all of the wonderful and not so wonderful things that have gone on to the state
[04:51] SPEAKER_00: How do we ensure that we insulate as many Canadians as possible from losing their jobs
[04:56] SPEAKER_00: And how do we protect and make sure that
[04:58] SPEAKER_00: That we can kind of freeze the economy
[05:02] SPEAKER_00: To keep
[05:03] SPEAKER_00: Viable otherwise viable businesses alive long enough so that when we see the emergency phase of COVID-19 over
[05:11] SPEAKER_00: Some of them can then get back to get back to work my main focus right now is trying to think
[05:17] SPEAKER_00: Along and hard about what's going to help the recovery after the emergency phase is over and I think governments
[05:23] SPEAKER_00: I understandably have been focused on the health emergency
[05:26] SPEAKER_00: Yeah, some of them have attended to some of the economic emergency that is some of the bits of the
[05:30] SPEAKER_00: Economic emergency that comes along with that
[05:33] SPEAKER_00: But we need to make sure that we're thinking about what's going to stimulate
[05:37] SPEAKER_00: Canada
[05:38] SPEAKER_00: coming out of the emergency so that we can get back into into growth mode get employees back to work and and get
[05:45] SPEAKER_00: You know our tax tax coffers filled again to pay for the services that we're all that I desperately need
[05:51] SPEAKER_01: Let's talk about solutions and government response to this first of all from an employer's
[05:57] SPEAKER_01: standpoint a small business owner standpoint
[05:59] SPEAKER_01: What has the government done and can you explain what the response has been for them
[06:05] SPEAKER_00: Sure, there have been several measures taken by federal by the federal government and by provinces to try to address the problem
[06:11] SPEAKER_00: Even some municipalities now entering into some of the relief efforts, which has been good and there have been some helpful measures along the way
[06:19] SPEAKER_00: First the governments did for employers and for employees wave the waiting period
[06:23] SPEAKER_00: So for you out of an employee that was essentially affected by covid or perhaps just under investigation and in quarantine
[06:31] SPEAKER_00: They would be able to get employment insurance benefits right away. They would wave the one week waiting period
[06:35] SPEAKER_00: That was a positive message message
[06:37] SPEAKER_00: They changed some of the banking rules to provide to ensure that that Canadian small businesses would be able to access financing a little bit more easily
[06:45] SPEAKER_00: through
[06:47] SPEAKER_00: BDC or EDC
[06:48] SPEAKER_00: also ensuring that some of the banks would make sure that they customize
[06:53] SPEAKER_00: And we're flexible in applying rules to businesses that were otherwise affected
[06:58] SPEAKER_00: they waived some of the audit
[07:01] SPEAKER_00: Rules and requirements and essentially sent them packing which is always good news
[07:06] SPEAKER_00: They also provided some relief from paying certain taxes on the schedule deadline like corporate income taxes personal income taxes
[07:14] SPEAKER_00: Provinces have done similar measures, you know, spality is same thing with property taxes
[07:18] SPEAKER_00: So there's been a fair amount of action
[07:21] SPEAKER_00: The other big thing that the federal government did is that announced a 10% wage subsidy package for small business
[07:28] SPEAKER_00: It's the right measure but was such a minor almost trivial amount it was 10% of wages
[07:35] SPEAKER_00: up to about
[07:36] SPEAKER_00: Up to 25,000 dollars for an employer maximum
[07:41] SPEAKER_00: That's not going to help a lot of employers that are trying to do their best to hang onto their staff
[07:46] SPEAKER_00: And this is where I think the focus should be is ensuring that we don't end up pushing employers as to feel like the only option
[07:55] SPEAKER_00: They have is to lay off staff we can avoid that if we're careful
[07:58] SPEAKER_01: Okay, so
[08:00] SPEAKER_01: As you look at the current situation Dan from the CFIB perspective
[08:05] SPEAKER_01: What is it that you would like to see the government do even more a two-fold like a for for businesses and b for
[08:13] SPEAKER_01: Workers
[08:13] SPEAKER_00: Yeah, so look we've been doing a CFIB has been doing regular surveys of our members to find out what the impacts have been on them
[08:20] SPEAKER_00: And certainly they are massive and what they would recommend governments do to try to help them respond
[08:26] SPEAKER_00: the impacts are growing by the day
[08:29] SPEAKER_00: Uh last week before the before the real burden of started to kick in
[08:34] SPEAKER_00: A quarter of our members told us that they would not be able to survive more than a month if with a significant drop in business income and by
[08:42] SPEAKER_00: Significant we met 50% or more
[08:45] SPEAKER_00: Now we have businesses that have lost 100% of their business income because they're just not able to serve customers at all
[08:52] SPEAKER_00: How can governments respond the two things that came out most clearly to me
[08:56] SPEAKER_00: One is that businesses need help with wages and they need help paying their rent and the associated costs with their real estate
[09:03] SPEAKER_00: Yeah, um on the on the in those are often the two largest expenses for a small business owner wages
[09:10] SPEAKER_00: Usually are the number one, but rent is usually quite quite close to that
[09:15] SPEAKER_00: On the wages side what we're asking government to do is expand on the wage subsidy that they've already introduced
[09:21] SPEAKER_00: We feel it should be in a 75 80 or even higher percent range to try to make sure that the government if you're able to retain your workers
[09:29] SPEAKER_00: A private sick company that the government will pick up the wages while that person is sitting idle and not having you have to
[09:36] SPEAKER_00: Lay them off to sever the relationship between the employer and the employee
[09:41] SPEAKER_00: We think that that would be the best way possible to avoid
[09:44] SPEAKER_00: Wide-scale unemployment in Canada and remember if we're able to do that six if an employer is has 75% of their wage bill covered
[09:53] SPEAKER_00: They could use whatever reserves they might have in the business if they're lucky or whatever
[09:58] SPEAKER_00: borrowing they're able to take on
[10:00] SPEAKER_00: In the short term to help pay some of the other bills
[10:05] SPEAKER_00: That wage subsidy I truly believe will help us spur an economic recovery a lot more quickly
[10:11] SPEAKER_00: Then if an employer is forced to lay off their workers that person then is severed from the business
[10:16] SPEAKER_00: And even if they're offered their job at the end of it the at the end of the crisis
[10:20] SPEAKER_00: They may or may not come back to that same employer and the recovery is just going to be that much slower
[10:26] SPEAKER_00: Stressful for the employee not good for the business certainly and will slow our economic recovery
[10:33] SPEAKER_00: On the rent side of the equation
[10:34] SPEAKER_00: I think provinces you know we have members on both sides of that balance. It's a tricky one for us
[10:39] SPEAKER_00: There are a lot of small businesses that also you know
[10:42] SPEAKER_00: Own the strip mall and which their business is located and rent out three other bays to other tenants
[10:48] SPEAKER_00: So they are depending on that rental income to help offset some of their business losses
[10:53] SPEAKER_00: But for the most part I think I mean look we're calling on all the property managers property owners to be reasonable
[11:00] SPEAKER_00: I think governments need to step in here too, and this is where I think provinces could play a key role
[11:04] SPEAKER_00: not just
[11:06] SPEAKER_00: Delayed the property tax receipts, but actually forgave property taxes during this emergency period
[11:11] SPEAKER_00: And the provinces step up to fund municipalities for the difference
[11:15] SPEAKER_00: That could be huge in addition
[11:18] SPEAKER_00: potentially even having provinces subsidized some of the rental
[11:22] SPEAKER_00: Rental receipts for for small view size firms that like if they if they can cover off those two expenses
[11:29] SPEAKER_00: I think we all will have a higher percentage of small firms that will come up the other side of this
[11:33] SPEAKER_01: Yeah, I know this is a tough question to answer, but you know if I'm a small business owner
[11:39] SPEAKER_01: I come to you Dan or come to the CFIB and I'm asking for her advice. What do I do? What do I do?
[11:46] SPEAKER_01: What's your advice to them?
[11:48] SPEAKER_00: Well, look we are getting those calls right now CFIB offers business counseling to all of its 110,000 members
[11:55] SPEAKER_00: We typically get about 50 calls a day and now that's up to 600 oh my I've assigned now
[12:01] SPEAKER_00: I've tripled the size of the department
[12:03] SPEAKER_00: I've got 90 people now returning calls to business owners most of the members
[12:07] SPEAKER_00: But some of them non members of CFIB were trying to help as many of those as we can
[12:12] SPEAKER_00: But the questions we're getting are typically around employment
[12:16] SPEAKER_00: I got to lay off my staff. How can I do that legally? Am I going to have to play employment standards lead provisions when I terminate an employee and put them on EI
[12:25] SPEAKER_00: How do I do the record of employment to allow them to get EI benefits quickly and easily and are there other options that that can be provided
[12:33] SPEAKER_00: We get a lot of questions also about whether there are any support programs for the business itself
[12:40] SPEAKER_00: And there are a few of those more limited
[12:43] SPEAKER_00: Most notably the wage subsidy package that I spoke of earlier you mentioned
[12:47] SPEAKER_00: I was just talking about
[12:48] SPEAKER_01: Employment do you see a possible shift in an employment
[12:54] SPEAKER_01: After this is all over like obviously many of the grocery stores are are hiring like crazy
[13:01] SPEAKER_01: Wal-Marks hiring 10,000 people in Canada, you know, so there's certain pockets that are hiring
[13:07] SPEAKER_01: You know, they're going to pick off from other industries right?
[13:11] SPEAKER_01: So when everything comes back those industries are going to probably face a staff shortage
[13:16] SPEAKER_00: Well, look we were prior to this we were going into an environment once again of significant staff shortages
[13:22] SPEAKER_00: Not right across the country because there are certain markets including Alberta where
[13:26] SPEAKER_00: Where there are still large numbers of unemployed
[13:29] SPEAKER_00: Even before the crisis kicked in
[13:32] SPEAKER_00: I suspect like with the
[13:34] SPEAKER_00: 2007-2008 recession
[13:36] SPEAKER_00: They're they're not going to be huge concerns about the shortage of labor in the short term
[13:39] SPEAKER_00: But that will quickly change
[13:42] SPEAKER_00: If the economy gets back on its feet and we do need to make sure that we think about what the future world of work looks like
[13:49] SPEAKER_00: But we're we're a few months away from worrying about
[13:52] SPEAKER_00: About vacancies in business. I think the bigger the bigger issues going to be a crushing level of unemployment in the short term
[14:00] SPEAKER_00: It's going to outstrip our ability to to support all of the unemployed if we're not
[14:06] SPEAKER_00: Therefore we can avoid the worst of that not all of that
[14:09] SPEAKER_00: If we provide a proper wage subsidy to employers to keep their workers that to me is the best economic advice I can give governments
[14:15] SPEAKER_00: And for whatever reason the federal government it hasn't done it despite the fact that England
[14:20] SPEAKER_00: Sweden
[14:21] SPEAKER_00: France
[14:23] SPEAKER_00: The list goes on western European countries that have announced very similar wage packages to support 80 90% of wages not the
[14:31] SPEAKER_00: Not the 10% that Canada has offered
[14:33] SPEAKER_01: Okay, then any last parting thoughts I think you covered it off well Mary. Okay. Thanks a lot
[14:39] SPEAKER_01: That was Dan Kelly who was president of the Canadian Federation of Independent Business
[14:45] SPEAKER_01: This is Canada's podcast network and I'm your host Mario Tonoguzzi. Thanks for joining us today
