B4| REPORTONBUSINESS OTHEGLOBEANDMAIL | WEDNESDAY,APRIL8,2020
DILBERTS
ole proprietors and other self-employed
entrepreneurs are joining the growing list
of Canadians who feel left behind by Otta-
wa’s COVID-19 relief programs, worried that
taking on even the smallest sale or project will
prevent them from accessing benefits.
Some, such as chiropractor Brent Helm-
staedt, who works in and around Kingston,
have seen client work and billable hours drop
lower than a tenth of their usual workload –
enough to destroy their income, but not
enough to make them fit the current qualifica-
tions of the $2,000-a-month Canada Emergen-
cy Response Benefit (CERB).
Yet the trickle of work coming in for these
entrepreneurs is crucial: They’re keeping mon-
ey flowing through the economy, and in the
case of some sole proprietors such as Dr. Helm-
staedt, diverting patients from overcrowding
hospitals.
Dr. Helmstaedt has only been able to work
one or two hours a week, but focuses on clients
with acute pain so bad it prevents them from
basic tasks such as buying groceries, who
might otherwise visit the emergency room. “I
don’t think front-line health care or the emer-
gency room wants to see migraine or back-pain
patients,” he says. Because of this, he wasn’t
able to apply for the CERB this week, even as he
worries about drawing on credit to survive.
“I’m slowly circling the drain.”
Ottawa began announcing novel coronavi-
rus economic response measures last month.
Entrepreneurs have since raised frequent con-
cerns that the response lacks the nuance to
save their small and medium businesses. A
common cry has been that entrepreneurs who
find ways to bring in revenue, however little it
is, are being indirectly punished for taking on
work – while those whose incomes have dis-
appeared entirely are more likely to qualify for
the 75-per-cent wage subsidy or the CERB.
While Prime Minister Justin Trudeau said
Monday thatthe government will soon an-
nounce how Canadians now working 10 hours
a week or less can benefit from the CERB, en-
trepreneurs remain confused and worried
about being left behind. Qualifications for the
wage subsidy are under review, but currentlyonly allow applications from businesses whose
revenue has fallen 30 per cent from a year earli-
er; it is not clear whether small-business own-
ers themselves can get the wage subsidy.
Jamie Bowen, a Calgary-based artisan whose
company Splat and Co. makes wool dryer balls
and other wool products, has lost most, but
not all, of her sales as retailers and trade shows
shut down because of the pandemic. The sole
proprietor is anxiously awaiting Mr. Trudeau’s
new CERB details, because she otherwise fears
having to shut down and build a new business.
Even if Ms. Bowen qualifies for the CERB,
“My income is the only income for my family,”
she says. “I’m barely going to cover rent and
food for $2,000 to start with.”
She’s hardly alone in confusion. Joel Robert
of Robert Graphic Services in Brampton, Ont.,
applied for the CERB this week after client
work disappeared in the second half of March –
but he worries about being eligible for the sub-
sequent month because he took on a couple of
client orders this week.
“If you were to tell me that the only way I
can benefit in the next four months is to not
have any income at all, should I just shut my
doors and collect government money?” Mr.
Robert asks. “I don’t think that’s the right thing
to do. The right thing is to do whatever you
can.”
About 4.4 per cent of working Canadians are
incorporated self-employed workers, accord-
ing to 2016 census data, while 7.5 per cent are
unincorporated sole proprietors.
Kingston lawyer Wendy Griesdorf is a spe-
cialist in estate mediation. Her work has dried
up, but she’s taken on occasional work during
the crisis in helping clients unlock money from
estates to flow to charities in vulnerable sec-
tors.
She’s frustrated that Ottawa has asked all
Canadians to collectively slow the economy for
the sake of public health, yet hasn’t provided
all parts of the economy with relief. “I don’t
think their fiscal policy has matched their pub-
lic-health policy,” Ms. Griesdorf says.
Toronto accountant Andrew Zakharia says
he’s seen a constant stream of self-employed
clients asking how to apply for relief. He’s had a
hard time getting them answers. He wants fed-
eral officials to compile a list of frequently
asked questions and answers. In many cases,
“there’s a lot of interpretation by a variety of
people, but nobody knows what the actual an-
swer is.”
With Mr. Trudeau’s announcement Monday,
some self-employed Canadians might become
more eligible for relief. “I’m optimistic that
that will be remedied. But at this point, that’s
on faith,” Dr. Helmstaedt says.RobertGraphicServicesownerJoelRobert,seenoutsideofhisBrampton,Ont.,homeonTuesday,
appliedforCanadaEmergencyResponseBenefitthisweek,butworriesabouthiseligibilityforMay
becauseofrecentclientorders.J.P.MOCZULSKI/THEGLOBEANDMAILEntrepreneærsfear
losinoætonQenefits
Self-employedbusinessowners
worrytheywon’tbeableto
qualifyforbenefitprogram
iftheycarryonwithprojectsJOSHO’KANE
SMALLBUSINESSREPORTERTOKYOJapanese Prime Minister Shinzo Abe on
Tuesday declared a state of emergency to fight
coronavirus infections in major population
centres and rolled out a nearly US$1-trillion
stimulus package to soften the economic blow.
The state of emergency, giving authorities
more power to press people to stay at home
and businesses to close, will last a month and
be imposed in the capital, Tokyo, and six other
prefectures, accounting for about 44 per cent
of Japan’s population.
“It is no exaggeration to say that Japan’s
economy, and the world economy, is facing the
biggest crisis since postwar right now. We will
protect the employment and life at all costs,”
Mr. Abe told a news conference.
Major department stores such as Isetan
Mitsukoshi announced store closings, while
restaurants and bars around Tokyo – many of
which were still operating earlier this week –prepared to close.
Mr. Abe said that by reducing contact be-
tween people by 70 per cent to 80 per cent, the
government hoped infections would peak in
two weeks.
The government approved the stimulus
package, worth 108 trillion yen (US$990-
billion). That is equal to 20 per cent of Japan’s
economic output.
Japan has been spared big outbreaks of the
coronavirus, but a recent, steady rise in in-
fections in Tokyo, Osaka and other areas led to
growing calls for Mr. Abe to announce a state
of emergency.
Coronavirus infections in Tokyo doubled to
about 1,200 in the past five days, with more
than 80 new cases reported on Tuesday, ac-
counting for more than a quarter of cases in
the country.
REUTERS A-ANDECLARESSTATEOEMERGENCYb
A--RO9ESLARGEECONOMICSTIM4L4S-ROGRAMA number of companies, includ-
ing many in the retail industry,
have been deemed “non-essen-
tial” services and forced to shut
their doors.
Retailers have coped with store
closings in many cases by tempo-
rarily laying off workers. But fast-
food chains, including Tim Hor-
tons, have remained open. RBI
has told staff it will not use layoffs
or pay cuts to cope with any de-
clines as a result of COVID-19.
RBI would not confirm how
much revenue has declined. But
even though fast-food chains are
still serving customers, traffic has
slowed as more people shelter at
home.
McDonald’s Canada and Star-
bucks Canada both declined to
confirm their plans regarding the
wage subsidy on Tuesday. Both
chains closed most of their res-
taurants in Canada more than
two weeks ago, offering drive-
through or delivery services only.
Toronto-based Canadian Tire
Corp. Ltd. declined to outline its
plans. In an e-mail, Montreal-
based convenience-store chain
Alimentation Couche-Tard Inc.
said it is “evaluating thegovern-
ment support available” in all ju-
risdictions where it operates, and
will decide whether or not to ap-
ply.
RBI employs roughly 350 peo-
ple at its head office in Toronto,
and more than 1,000 people in its
supply chain, such as distribu-
tion-centre workers and truck
drivers. More than 450 people
work at the head office in the U.S.,
managing Burger King and Pop-
eyes. RBI also has employees at its
corporate-owned restaurants, of
which there are roughly 25 in Can-
ada and more than 100 in the
United States.
Even as revenue dips, the com-
pany has cash to sustain the pay-
roll at the corporate level. In 2019,
RBI had $1.4-billion in free cash
flow. In a letter last week, chief ex-
ecutive Jose Cil confirmed that
the company has also drawn
down a $1-billion revolving credit
facility, and last week the compa-
ny launched a $500-million bond
offering.
While Mr. Fulton said that op-
tics were not a consideration in its
decision to forgo government
wage assistance for corporate sal-
aries, its cash on hand, combined
with the fact that the company
earned $1.1-billion in net income
last year, could expose RBI to crit-
icism if it did decide to apply.
But some businesses say that
the wage subsidy is a lifeline. Van-
couver-based Aritzia Inc., which
employs 2,106 people across Can-
ada, has closed all of its stores, but
has not laid off any of its staff or
introduced pay cuts, and is con-
tinuing to pay store staff based on
their typical hourly wages. Reve-
nues are down significantly and
the retailer plans to apply for the
subsidy. “I wish I could tell you
that we didn’t qualify, but we do
qualify,” CEO Brian Hill said. “The
purpose and intent of what [the
government] did worked perfect-
ly with our aspirations of finan-
cial continuation for our people.
It’s certainly a meaningful contri-
bution.”
The company is hoping busi-
nesses may be able to begin
ramping up operations again
around July, but is planning for
the financial effects of COVID-19
to last through the rest of the year.
Aritzia has been communicating
to customers that all proceeds
from e-commerce sales go toward
that continued financial support
for its staff. “Unfortunately, it has
not come close to making up for
shuttering 100 stores, but it has
had a meaningful effect,” Mr. Hill
said. “Without [customer] sup-
port – evenwith thegovernment
support – we would not be able to
do this.”WithareportfromNicolasVanPraetRBI:Somefastfoodchainsstill
openbQæteïperiencinlesstraffic
FROMB1Mr. Kenney’s remarks underscore
just how keenly the energy sector
awaits federal financial aid to ac-
celerate the clean-up of thou-
sands of old oil and gas wells lit-
tered across the province. Such a
plan would benefit the province
by combining environmental
clean-up with job creation.
It would also help alleviate oil
and gas companies’ financial
struggles by removing the well
liabilities from their bottom line,
although critics have said compa-
nies should remain on the hook
for cleaning up their messes.
Mr. Kenney said development
of a well clean-up package is “well
advanced,” and signals from Otta-
wa indicate it will be released by
the end of this week. He expects it
to be “orders of magnitude”
larger than the $100-million loan
his government recently made to
the Orphan Well Association.
On Tuesday, Finance Minister
Bill Morneau’s office had little to
say about Mr. Kenney’s pronoun-
cement. “We’re continuing to
work with provinces and stake-
holders from the energy sector to
ensure that we can provide ap-
propriate credit measures for the
industry, especially the small-
and medium-size firms in that
sector, and support its workers,”
Maéva Proteau, press secretary
for Mr. Morneau, said Tuesday.
“Also, the Canada emergency
wage subsidy and the Canada
emergency response benefit will
help people and businesses
across the country, including in
the people in the energy sector.”
Calgary economist Trevor
Tombe was not surprised by Mr.
Kenney’s unemployment fore-
cast, and reckons it could be even
higher. Mr. Tombe pointed to the
virtual evaporation of the retail,
accommodation and food sec-
tors, which combined employ
around 400,000 people. “To a
large extent, this unemployment
rate is a policy choice that the
government has made to prevent
a health catastrophe in the fu-
ture,” he said.
According to Statistics Canada,
Alberta’s highest unemployment
rate in the last four decades was
12.4 per cent, in September, 1984.
TD Economics projected late
last month Canada’s unemploy-
ment would temporarily soar to
an average quarterly level of 11.7
per cent in the second quarter,
before dropping to around 6 per
cent by year end. It predicted Al-
berta’s unemployment rate
would hit 9.5 per cent – second
only to Newfoundland and Labra-
dor at 12 per cent. It projected the
lowest level of unemployment – 5
per cent – in both B.C. and Que-
bec.
Although Mr. Kenney has re-
peatedly warned that Alberta’s
current economic reality harks
back to the Great Depression, Mr.
Tombe said that situation was
more of a structural problem
than the contagion’s current hit
to the economy. “This is a deliber-
ate choice to put economic activ-
ity into a medically induced coma
in order to heal and get through
it,” Mr. Tombe said.
Along with a well clean-up
package, Alberta continues to
push Ottawa for a credit backstop
that would allow financial insti-
tutions to keep extending credit
to distressed oil and gas compa-
nies. Mr. Kenney estimates a liq-
uidity package will need to be be-
tween $20-billion and $30-bil-
lion.
Canada’s financial system can-
not afford “massive and perma-
nent” destruction of value in the
Canadian energy sector, he said
Tuesday, as the two are so closely
intertwined. “This is not simply
Alberta engaging in special plead-
ing. This affects other provinces,
especially Newfoundland and La-
brador and Saskatchewan,” he
said.
Natural Resources Minister
Seamus O’Regan is preparing to
hold a conference call Thursday
with his U.S. and Mexico counter-
parts in advance of the G20 ener-
gy ministers meeting on Friday.
“Canada will participate, and has
been actively consulting with
provinces, Canadian companies,
and workers, ahead of this meet-
ing,” Mr. O’Regan’s communica-
tions director Carlene Variyan
said in a statement.
North American energy minis-
ters are meeting to work out a
game plan for the Group of 20
talks in response to demands
from Saudi Arabia and Russia for
the United States and Canada to
cut production to help prop up oil
prices. The trilateral discussions
will take place at the same time
that Alberta will be joining Orga-
nization of Petroleum Exporting
Countries (OPEC) talks on Thurs-
day that are also being held in ad-
vance of the G20. A seniorgovern-
ment official, who was not autho-
rized to speak publicly about the
discussions, played down any
suggestion that Canada would go
along with further production
cuts.
Alberta crude production has
already been curtailed for more
than a year, after the former NDP
government mandated cuts to try
to shrink a crippling Canada-U.S.
price differential.Alberta:4nemploðmentcoæld
Qehiherbeconomistsaðs
FROMB1