TORONTO, June 29, 2020 /CNW/ - GST/HST payments that had been deferred to June 30th are coming due tomorrow and many small businesses are worried that costly penalties and interest will start accumulating on amounts they can't yet afford to pay, warns the Canadian Federation of Independent Business (CFIB). Adding to the high anxiety around cash flow, rent is due on Wednesday with many still not able to access any rent relief and the existing relief program not covering rent beyond June.
"We need to understand that although half of Canadian businesses are now fully open, things are still very far from normal in terms of revenues for the vast majority of businesses. Programs that have been extended like the wage subsidy are helping businesses bridge back to normal. We need to do that with other big costs like GST/HST and rent. Canada's economic recovery depends on it", said CFIB president Dan Kelly.
According to new survey data, 30 per cent of small businesses cannot afford their July rent without help. On June 19, CFIB sent an open letter to finance minister Bill Morneau outlining the urgent need to fix the CECRA rent relief program by extending it and creating a path for tenants to access the help directly, which could include an expansion of the forgivable portion of the Canada Emergency Business Account (CEBA) loans.
"I don't have strong enough words in my vocabulary to convey how important it is for rent relief to be fixed. In good conscience how do we shut down people's livelihoods for months for the public good and then stick them with the whole bill? Established businesses are going down over rent and it affects the owners, their families, their employees and more broadly our neighbourhoods and Canada's ability to recover," said Laura Jones, CFIB executive vice-president.
CFIB has five key recommendations to help businesses with looming bills:
- Allow deferred GST/HST payments to be repayable without penalty between now and the end of the year (this is supported by three quarters of small businesses in a recent survey). Small firms also need flexibility in cases where they are expected to remit GST/HST on payments they have not yet received from clients who aren't able to pay their bills.
- Extend the Canada Emergency Commercial Rent Assistance (CECRA) program to September and significantly lower the revenue reduction requirement.
- Allow tenants to access CECRA funds directly if their landlords do not apply.
- Expand the CEBA loan to $60,000 and increase the forgivable portion to 50 per cent, while providing promised access to new firms and those without business bank accounts.
- Release the revised eligibility rules for the Canada Emergency Wage Subsidy for July and August. Provide access to more firms through a lower and graduated revenue reduction test.
"With so many small businesses in a tight spot financially, government must provide some breathing room or risk suffocating them further." Kelly concluded.
Read CFIB's letter on GST/HST to the federal government for more details.
The Canadian Federation of Independent Business (CFIB) is Canada's largest association of small and medium-sized businesses with 110,000 members across every industry and region. CFIB is dedicated to increasing business owners' chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
SOURCE Canadian Federation of Independent Business
For further information: For media enquiries or interviews, please contact: Milena Stanoeva, CFIB, 647-464-2814, [email protected]