2020 has been an exceptionally challenging time for businesses in Thunder Bay and across the globe. 2021 is starting with further restrictions imposed on Ontario’s businesses and citizens.
The Thunder Bay Chamber of Commerce in partnership with the Northern Policy Institute, the Thunder Bay CEDC, and the North Superior Workforce Planning Board has been collecting survey data from local businesses to gauge the impacts of COVID-19 on their operations. The most recent survey data was collected prior to the expansion of Orange/Restrict limitations in early December and the shutdown that began on December 26th.
The numbers confirm over one-third of businesses surveyed have suffered over $100,000 in lost revenue up to the end of November. In the same survey, 16 percent of business said their businesses won’t survive and a further 33 percent said the health crisis is having a significant impact on their operations. We know that 2021 is starting with more dismal revenue projections.
Business owners are making tough choices to stay solvent including staffing and operating hour reductions while also facing increasing costs to address new health and safety guidelines in their operations.
I know statistics can be hard to fully absorb, and don’t really tell us how are our neighbours and friends being impacted personally – so consider these examples which may be similar to concerns you’ve heard from your own contacts:
- A food service business that lost over $400K in revenues from the cancellation of lunch programs when local schools closed in the spring
- A restaurant owner who has laid off over 50 staff and is showing revenue declines of more than $1 million dollars across their operations
- A travel agent who had to cancel and refund all client travel bookings and commissions in March and has had no income since
- Retailers with thousands of dollars in inventory that is considered “non-essential” and cannot be sold in-store
- A business owner who is facing foreclosure on his family home
- Larger businesses are also impacted especially in the tourism and hospitality sector – the Hotel Association indicates that their 15 member properties have lost between $20 and $25 million dollars in revenues in 2020 and have laid off hundreds of staff
Unfortunately, the recent Orange level restrictions and current lockdown has forced hundreds of businesses to close their doors to customers once again and will put the future of many more businesses at risk – losing their hard-earned savings and putting themselves and their employees out of work.
These are the very real anxieties that business owners and citizens face every day across our community.
The Federal and Provincial Governments have introduced numerous programs with direct financial support for businesses, including a reduction of the Business Education Tax to be applied to 2021 business property taxes. These programs are vital but they cannot compensate for lengthy revenue reductions of this magnitude in our local businesses.
The City of Thunder Bay has also stepped up to help struggling businesses and residents in many ways including through free 2-hour meter parking, deferral of tax and water payments and extended payment terms, reduced late fees and interest charges, rent relief for city tenants, and an expedited patio approval process for restaurants this summer.
We recognize that there is not a lot that the municipal government has control over in the fight against COVID-19. Our federal and provincial health experts are leading with science and public health policies to stop the spread and save lives.
Where you DO have control is in the increase in property taxes and fees that are levied upon our community.
We believe that during these exceedingly difficult and uncertain times, the 2021 budget process is an opportunity for City Council to provide an economic shot-in-the-arm to taxpayers by taking every possible step to reduce its spending and the subsequent tax levy increase on our properties. Every cost reduction you make right now to both tax funded and COVID expenditures acknowledges the hard reality confronting many of our citizens, demonstrates empathy with their struggles, and leaves a little more money in their pockets for daily purchases.
The recovery of our economy will be dependent on the recovery of small businesses. Council can choose to increase the discretionary income of local consumers by holding the line on taxes. Dollars that aren’t spent by our citizens on city taxes and fees, can be spent at a local business to buy groceries, a take-out meal, a curbside purchase from a favourite retailer or to support a local charity.
The business community simply cannot afford more taxes and user fees, and we do not recommend depleting reserves that may be needed to deal with other future costly surprises.
We are looking for our city leadership to make the tough but necessary choices that will reduce operating costs for 2021 and the years ahead so that those savings can be passed along to property owners.
2020 was very difficult…2021 will be as well, and 2022 will likely be the first full year of business recovery. We hope Council will find internal savings that do not require increases from a vulnerable business sector over the next two years.