'Bombshell': Small Business BC abruptly declares bankruptcy

A decades-old non-profit with a mandate of supporting B.C.'s small businesses abruptly declared bankruptcy – resulting in dozens of employees losing their jobs weeks before Christmas.

The president of the board of directors for Small Business BC gave a letter to employees last week, saying an insolvency trustee had been appointed to "begin the bankruptcy process" and that the organization would immediately cease operations.

Small Business BC offered a range of services to owners and entrepreneurs, including guidance on how to establish a business and ensure its success. It also received federal and provincial funding.

Mark Eversfield worked for the organization for 32 years, making him the longest-tenured employee. He said he and his colleagues were informed about the bankruptcy in a Zoom meeting and described the news as a "bombshell."

Workers, according to Eversfield, will not be collecting a final pay cheque, were not given any severance or outstanding holiday pay, and were told to apply for Employment Insurance.

"It's a terrible situation," he said.

The staff at Small Business BC are seen in this photo.

Eversfield says employees were aware there were issues, but that he thought recent moves had been enough to stave off the organization's ruin.

"Small Business BC was in a state of financial mismanagement, and the directors had taken over. They had suspended the CEO and the auditor and the COO had resigned," he said.

The letter to employees offers next-to-no details about the issues facing the organization.

"This decision was not made lightly and reflects the culmination of significant financial challenges that have recently come to light," it said.

"These challenges stem from financial issues on several levels that resulted in damage the board was unable to remedy, despite swift action to stabilize the organization and reduce costs."

The same day the letter was sent, the organization made its final social media post which links to a now defunct website that consists of a blank page with a single sentence about the bankruptcy.  

Premier David Eby was asked about the development Monday and said his government's focus will be on making sure provincial taxpayer dollars allocated to funding the non-profit are recovered and that employees are "looked after."

Minister of Jobs, Economic Development and Innovation Diana Gibson said the province chose not to bail out Small Business BC because of the concerns about financial mismanagement.

“British Columbians asked us to show fiscal responsibility, and we are showing fiscal responsibility with the decision we have made here. And we will continue to support small businesses in those programs with other partners,” Gibson said.

But Gavin Dew, the B.C. Conservative critic for the ministry, doesn’t buy it.

“I think the reality is, if government was going to make an orderly transition as to the way it funds and operates support for small business, you would have seen an announcement of transition. You would not have seen a bankruptcy that was revealed to the public on social media,” Dew said.

Eversfield and other former employees are also skeptical there won’t be a huge hole left by the demise of Small Business BC.

“The idea that you want to increase the survivability of a business, that was our mandate,” said Eversfield. “And now it's not there.”