COVID-19’s Economic Policy: The Small Business Tax
In March of 2020, household-name corporations made record profits, while small business owners struggled to maintain their households. Over one year later, what can we do to support local business? And more pressingly, how do our leaders plan to help?
On March 11th of 2020, the World Health Organization addressed the public with a statement about COVID-19: “We have therefore made the assessment that COVID-19 can be characterized as a pandemic…It doesn’t change what WHO is doing, and it doesn’t change what countries should do.” In preparation for an unparalleled health crisis, political battle and economic state, Canada imposed its first lockdown. As of March 13th, retail stores began rewarding customers for shopping online with loyalty points, discounts, and — the ever familiar rush of — free shipping.
For a suspended instant, the country began adapting to this new normal, even learning to embrace the convenience of E-Commerce. The ship of normalcy had sailed, Canadians on board with their same-day shipped packages and hand sanitizer. Only, small businesses were left behind. The Canadian Federation of Independent Business (CFIB) surveyed business owners across Canada, posing the statement: “The value of our business has gone down as a result of the pandemic”; more than half responded that they agree with the statement.
Global business has suffered in the last year, from the travel and tourism sector, to investments and international trade. However, the economic poison apple, COVID-19, has been ever more potent to small business. Over the past year, Jeff Bezos, Founder of Amazon, soon to be Executive Chairman, made an additional $75.6 billion, handed generously to him by the pandemic itself. Amazon was a popular shopping choice during the lockdown, with their app and website often offering free Prime shipping. These options are rarely available to small businesses, who previously relied on foot traffic and repeat customers. By contrast to Amazon’s profit surge, in a survey conducted by CFIB, over 56% of sampled Canadian small business owners need over a year to pay back debt incurred as a result of the pandemic.
For all non-grocery retailers, store capacity has been limited to 25%, as of Ontario’s new lockdown protocols that came into effect yesterday at 12AM. With fewer square feet to operate in than the “big box stores”, entrance and access to small business will be devastatingly limited. Local businesses in Hamilton, Ontario often allow only 1 or 2 people inside at a time to adhere to the law.
Fortunately, many small businesses have adapted: offering local delivery, curb-side pickup, and fulfilling as many online orders as possible. Numerous personal care businesses have opened an online store, in hopes of making up lost revenue. What demands concern from the general public and small business owners is the trend of billionaire companies growing infinitely richer during the lockdowns, while small businesses are often closed completely. According to CFIB, one in every three small business owners has considered closing permanently, due to the rising number of cases, and the possibility of future lockdown(s).
Current Support For Small Business Owners
The Government of Canada recently released two new measures to help small businesses; both serve different purposes, though each benefit addresses a separate concern voiced by entrepreneurs:
Providing Personal Protective Equipment (PPE) for employees is a crucial part of safe business practices, which the federal government has recognized. The Government of Canada has introduced the Main Street Relief Grant for Personal Protective Equipment (PPE), which provides up to $1,000 to small businesses (with 2–19 employees) for the purpose of purchasing PPE.
Lessons Learned From The First Lockdown
While “The Small Business Tax” isn’t an actual tax, revenue loss due to inequality in retail is an increasingly prominent part of being an entrepreneur in a pandemic. From lack of resources to less square footage, the challenges faced by entrepreneurs can seem insurmountable. In a changing economy, one thing that hasn’t wavered is the need for local business. Relationships in retail aren’t always mutually profitable; with local business, the gains are reciprocated, as revenue is directly re-invested into the local economy. The greatest asset to small businesses and dedicated entrepreneurs is the support of their community: we the public, as careful and considerate consumers hold the power to fuel local economic growth and recovery. Although, the majority of power is municipal, provincial, and federal government.
As we know from Stan Lee, with great power comes great responsibility. All levels of government are responsible to do their best for our Canadian small businesses. Entrepreneurs should explore every support option through small business initiatives offered by municipalities and the federal government. During the first lockdown, the Government of Canada introduced small business supports such as the Canada Emergency Rent Subsidy (CERS) in response. As the COVID-19 pandemic changes daily, new opportunities to be supported can arise quickly. After all, if the determined nature of small business has taught us anything, it is about the value and strength in adaptability.
