Small businesses are Brampton’s backbone. How will they survive the pandemic?
Small, non-essential, businesses have borne the brunt of the pandemic’s economic fallout. Numerous owners have been forced to close up shop and commercial strips across the country are pocked with darkened storefronts.
Those businesses that have survived often don’t know what the next month will look like.
According to data from Statistics Canada, small businesses or those with fewer than 100 employees were hardest hit during the first quarter of 2020 when the pandemic began.
Brennon Lundy, owner and head coach at Train Me Fit in Brampton, has managed to stay afloat. The fitness facility offers classes to small groups, and like many others, has been forced to rapidly adapt to changes the Province keeps making to fight the novel coronavirus.
When fitness activities were allowed outdoors over the summer, Lundy and his co-workers took advantage. With the colder weather fast approaching, the facility now uses a “hybrid model” with classes in-person and online. But he’s unsure how long the business will be able to keep this up. While retaining existing customers hasn’t been too difficult, because community support from loyal patrons has stayed strong, attracting new clients has been a different story.
“There's people who are afraid to go out to the gyms. They're not really sure how we run … they think, gym, big space, lots of people, when really, it's not that for us,” he told The Pointer.
As case numbers continue to rise far beyond what was seen in the spring, he fears, the gym will have to shut down once again and it will lose whatever business he has managed to hold onto.
Brennon Lundy, owner and head coach at Train Me Fit in Brampton fears the gym may have to close as pandemic restrictions constrain its potential to attract new customers.
Brampton has continued to lead Peel’s high COVID case count, representing nearly 62 percent of the region’s total since the beginning of the pandemic. Over the last week (November 8-14) the city reported an average of 278 new cases every day, including its highest count of 330 new infections on November 9, which was 27 percent of all new cases in Ontario on the same day, for a city that makes up 4.5 percent of the province’s population.
Peel has the highest cumulative rate of cases in the province since the onset of the pandemic, with 1,200 for every 100,000 residents.
Notices to shut or adjust his business operation often come on extremely short notice, frustrating Lundy and many other business owners forced to scramble at the last minute. While he understands the need for changes to be implemented quickly, and the business complies with these orders, it also hurts “the bottom line,” disrupting the flow of revenue. Many of his expenses remain fixed.
When Peel was moved into a modified Stage 2 October 10, closing indoor fitness classes and indoor dining, business owners were informed of the change less than 10 hours before they came into effect.
Train Me Fit hasn’t been able to make up much of the money it lost during the recent shutdown or between the provincial closure that lasted between March and July 31, when Peel was moved to Stage 3 of the Province’s phased reopening plan.
Another partial or full reduction in operations would force a move to online classes. Any further loss of revenue because clients aren’t able to come into the gym, might make things too tight: rent, electricity and the cost of equipment among other things have to be paid as long as the lights stay on. Lundy said he’s “hoping for the best but preparing for the worst.”
Most of the money lost by many businesses throughout the pandemic won’t be recovered from grants or other subsidies offered by the provincial government. The recently released 2020 budget includes little indication that help from Queen’s Park is on the way, leaving business owners to fill in the gaps themselves.
What is available likely won’t be helpful to many businesses.
Small businesses make up a crucial piece of Brampton's civic identity and its economy.
A new allowance will let most businesses in the province forego the Employer Health Tax, a levy on income for employees. Small businesses making less than $1 million annually will not have to pay this tax in the new year. Previously, the threshold for being exempt was $490,000.
Lundy said this is good in the long run, but for businesses on the brink of collapse, it doesn’t do much. For those who make less than $490,000 a year annually, and employ staff, the new tax exemption means nothing.
“The tax breaks that they talked about in this budget, [they’re] not going to help,” MPP Kevin Yarde (Brampton North) told The Pointer. “Small businesses are hurting… they’re left to fend for themselves.”
The Province also put $300 million forward to assist businesses with property taxes and energy bills if the region where they are located was put into a modified Stage-2 phase.
Tax breaks and other measures introduced by Finance Minister Rod Phillips and the PC government in the 2020 budget do little to help small businesses, Opposition MPPs say.
A third change was announced for the Business Education Tax, money the Province collects for education. The budget states this tax will be reduced to 0.88 percent for all businesses paying more than this rate. This will benefit 200,000 businesses in the province and create $450 million in savings for them, an average of $2,250 for all those that qualify.
In 1998, this tax used to be under the control of school boards, before the province took it over, according to a report from The Toronto Financial District BIA. What the tax means for businesses depends where they are. In 2017, the tax rate was 1.04 for commercial businesses in Peel. Smaller areas, such as the Township of Kerns, had a 0.58 percent tax rate for the same type of businesses.
“At the end of the day, [these reductions] really don’t help businesses who have had to close their doors [or] are on the brink of closing their doors,” MPP Sara Singh (Brampton Centre) told The Pointer.
Small businesses are Brampton’s backbone and can be found on nearly every street corner throughout the city. One of two mentions of Brampton in the Ontario budget outlines the importance of them, stating it’s “the family that starts a small business in Brampton” that will drive the province’s COVID-19 recovery, not governments. It’s unclear how this will happen without adequate support.
As of November 15, there were nearly 9,500 small businesses in the city, according to data from the City of Brampton. In 2017, according to Statistics Canada, 70 percent of all private-sector employees in the country worked in small businesses with an average of about seven employees in each company; in Ontario the figure was 67 percent and in the same year the province had 3.15 million people employed by small businesses, while only 550,000 worked for large companies (those with 500 or more employees).
The figures show how crucial small businesses are to the overall economy. Many are now struggling to survive.
Peel is currently in the red, control category under the provincial pandemic response framework; gyms and fitness studios can open with 10 people indoors and 25 people outdoors. For Train Me Fit, this isn’t much different than the number of clients pre-pandemic, with roughly 12 members allowed in the same class.
Dr. Lawrence Loh, Peel’s medical officer of health, added extra restrictions on top of the province’s framework. While he discourages the use of gyms and group fitness classes, in his November 7 letter to Peel residents, he said they may attend such sessions if needed, to help people with their mental health.
Restaurants Canada, an industry advocacy group, launched a campaign Monday, asking Queen’s Park “to set up a dedicated taskforce to help foodservice businesses survive the ongoing COVID-19 crisis.”
The group has sent a letter to Premier Doug Ford, asking for:
Immediate assistance to restricted businesses
Government communications that restaurants provide safe alternatives to private gatherings
Help promoting service such as takeout and delivery
Transparent data so “businesses can better prepare and adapt to evolving COVID-19 response measures.”
“Since the start of the pandemic, our members have been investing millions to protect the health and safety of their staff and patrons,” Restaurants Canada President and CEO Todd Barclay, stated in Monday’s press release.
The group urged the provincial government to keep “a moratorium on commercial tenant evictions... in place for as long as their operations are limited by COVID-19 restrictions.”
In the new year, the Province will give municipalities the option to reduce property taxes for eligible small businesses. The Pointer reached out to The City of Brampton but did not receive a response ahead of publication. Brampton’s proposed 2021 budget has no mention of tax reductions for small businesses, despite claims by members of Council, including Mayor Patrick Brown, that the city’s small business owners are a priority.
The City of Brampton previously deferred property taxes for a five-month period from March 18 to August 19, waiving all associated late fees. The website states payments should have been made by the August deadline.
Email: [email protected]
Tel: 416 890-7643
COVID-19 is impacting all Canadians. At a time when vital public information is needed by everyone, The Pointer has taken down our paywall on all stories relating to the pandemic and those of public interest to ensure every resident of Brampton and Mississauga has access to the facts. For those who are able, we encourage you to consider a subscription. This will help us report on important public interest issues the community needs to know about now more than ever. You can register for a 30-day free trial HERE. Thereafter, The Pointer will charge $10 a month and you can cancel any time right on the website. Thank you.
Submit a correction about this story