The Government of Canada recently announced the extension of targeted COVID-19 business-recovery supports until May 2022, but some hard-hit businesses won’t qualify.

Two of these targeted supports, the Hardest-Hit Business Recovery Program, and the Tourism and Hospitality Recovery Program, offer subsidized rates for wages and rent to businesses struggling in the wake of the pandemic.

According to a press release from the Canadian Federation of Independent Business (CFIB), the announcement of these supports has caused “confusion and concern among small business owners.” In the press release published Oct. 23, CFIB states that only one in five businesses still in need of financial support will be eligible to receive it.

Dan Kelly, president of CFIB, says the bar for eligibility set by the federal government is unrealistically high.

“A restaurant or hotel with a one-third current loss in revenue will receive zero support,” says Kelly. “Even worse, a gym or bowling alley with a 45 per cent loss in revenue will receive no help.”

Canada’s Department of Finance outlines the eligibility criteria for businesses wishing to apply for support. Under the Tourism and Hospitality Recovery Program, qualifying businesses must have lost at least 40 per cent of their revenue over a 12 month period, and must be suffering revenue losses at the time of application. The criteria for the Hardest-Hit Business Recovery Program are similar, but eligible businesses must have suffered at least a 50 per cent revenue loss over 12 months to qualify.

Luc Thermonvil, chief executive director of the Ottawa Black Business Alliance (OBBA) and the BIA Chamber of Commerce, regularly communicates with Black business-owners in the Ottawa area. He says these supports will disproportionately exclude Black entrepreneurs.

“A lot of mom and pop shops, they probably have a secondary business,” says Thermonvil. “It's not like their main [source of income]. Probably still working, doing their nine to five and they have a business [on the side], so a lot of them will not qualify because the operation is not considered a real business.”

The Canadian Black Chamber of Commerce (CBCC) published a survey in Feb. 2021 which indicates 75 per cent of Black-owned businesses are less than four years old. Overall, most new businesses do not yield a profit for the first four years of operation. In 2019, 77 per cent of Black-owned businesses report they generated revenue of less than one-hundred-thousand dollars that year.

Thermonvil believes that, given the existing barriers for Black entrepreneurs, the government’s eligibility requirements for pandemic supports are not equitable for the Black community.

“The first three years is the struggle,” Thermonvil explains. “If they’re a mom and pop who just started a business in the last two years, and you're asking them for a notice of assessment or how much they’ve been making, when it takes three years before they can say they're making money...I think the bureaucratic paperwork has to be less. When asking those questions, they should be more easy on the Black community.”

The survey from CBCC also indicates a reluctance among Black entrepreneurs to access government funding. Only 18 per cent of those surveyed said they felt comfortable discussing funding options with their financial institutions.

Thermonvil says part of this reluctance is due to persistent stigmas, and the treatment Black Canadians typically receive when dealing with traditional financial institutions.

“If I go to the bank with a jogging suit, I already have a ticket on me,” says Thermonvil. “So when I go to the teller, it's just like, ‘how can I help you?’ I don't get the ‘Welcome.’ So this is a barrier we're getting as Black businesses compared to the [other non-Black] organizations.”

Thermonvil believes there are many ways to address systemic barriers in entrepreneurship, such as creating subsidies specifically targeting the businesses owned by the Black community.

Currently, the only government-funded subsidy directly targeting Black-owned businesses is the Black Entrepreneurship Program, accessed through the Federation of African-Canadian Economics (FACE).

In response to the announcement regarding new pandemic business subsidies, CFIB is calling for the federal government to lower the threshold for all wage and rent supports. They are also demanding that more funding be made available through the Canada Emergency Business Account loan.

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