Mark MacDonald of Communication Ink Media & Public Relations Ltd
Governments siphon off close to 50 per cent of Canadian incomes and they are mandating office and public meeting closures to thwart the COVID-19 crisis.
They are trying to protect the public in unprecedented times. In recognition of that, they’ve offered various wage subsidy/replacement programs for employees, effective immediately. But what the various levels of government have offered up for businesses so far has fallen far short of what needs to be done.
There are some cases where workers have received benefits within 24 hours. The benefits are generous – so much so that they have created an environment where employees won’t return to work because they are receiving more money from the government than they were while working. Businesses that want to re-open cannot, because their employees won’t come back. And who can blame them: Why , as strictly go to work for less than they are receiving for sitting home and doing nothing?
Meanwhile, business owners need to either crawl over broken glass, or hire their own forensic accounting team to determine if the paltry percentage of relief the federal government has stated companies might be eligible for.
Ottawa’s priorities are most evident through the programs it lays out, and it is clear they recognize the value of looking after the mass block of employees/voters, rather than the few votes representative of the few entrepreneurs and owners who run the companies that create jobs.
The initial announcements were also a statement about what the governments and policy-constructing bureaucrats think about business. It mirrors most of society – that all business owners are rich, sitting on fat wallets and burgeoning bank accounts, all the while taking advantage of “write-offs”.
That’s the biggest laugh: “You have all those write-offs”, non-business people note, having no idea what they are spouting. A “write-off” is money that is spent on business-related activities and purchases paid for while conducting business, i.e. pre-tax dollars. It isn’t a gift to business – it’s taking less tax away, in recognition of spending money to, hopefully, make more money. “Write-offs” are certainly not free – it’s still money spent.
Government needs to move swiftly to give back some of the money it takes from businesses, because their isolation insistence has removed what the business community counts on them to do – create an environment in which they can conduct commerce. The same government that demands quarantining its citizens needs to reimburse those who have made significant investments in order to make a living, and have had those opportunities squashed, if even temporarily.
Governments should do something serious – like paying rent for companies shut down by government policies, for example. Or cutting property taxes. And more.
If governments don’t take care of small business, many will close their doors, and there won’t be jobs to go back to. 50 per cent of businesses fail, and with these hardships, that number may increase. I’ve already heard from a landlord who has lost several tenants in their commercial properties, and won’t re-start their enterprises. That means a loss of revenue for the building owner, not to mention the jobs that will disappear.
As far as government is concerned, business is the front line of tax collection. Every business owner is well aware of how much tax is taken off in payroll deductions, fees, and the GST and PST collected and remitted. That needs to be recognized and appreciated.
Kudos to business organizations across the country that have taken initiative to inform and lobby governments about the dire situations facing companies during COVID-19 panic. They’ve aggressively solicited memberships to obtain boots-on-the-ground anecdotes and numbers they can share with government, demonstrating the difficulties they are encountering – and what might likely happen if the government doesn’t intervene properly.
In business, cash flow – not cash. If there’s not enough of either, any business is going to be in serious trouble. Deferring taxes or giving a one or two month reprieve on sending in GST or other taxes doesn’t help the situation at all. In fact it quickens the inevitable, and that means bankruptcy or shutting the doors.
Loans aren’t helpful if a business owner looks down the road at long-term struggles, knowing they’ll have to pay back even more just to keep going. It’s just added overhead.
Providing direct financial support for businesses in a straightforward fashion in cash is an expensive solution, but in the long run, it may be the most inexpensive. If governments come up with effective methods to allow small businesses to survive, then those companies will be able to re-open their doors, meaning employees will go back to work, which will get them off income, or more accurately, taxpayer assistance.
The bottom line is this: Governments, which take all sorts of money from businesses in so many different ways, MUST support those companies during times like this – especially because the government themselves are the ones that have instilled prohibition-style tactics in an effort to stop the pandemic.
From a business owners’ point of view, governments are adept at getting in the way, instilling endless regulations and rules in a game of fiscal steeplechase that make it hard for companies to continue to jump over roadblocks to success and survive, let alone thrive.
Right now, governments need to give business owners back some of what they have already taken from them, and give them an opportunity to stay on their feet and continue to fight and move forward.
Mark MacDonald is President of Communication Ink Media & Public Relations Ltd. and can be reached at mark@communicationInk.ca