Calls for further tax deferrals, payment forgiveness as deadline approaches for B.C. businesses
VANCOUVER -- Opening during a pandemic posed some challenges for United Strangers corner store in North Vancouver.
Owner Christine Reid told CTV News they had just started renovating their new space, and then three weeks later, everything was shut down.
“It extended our renovations by two months, because all of the trades that would usually be in our space couldn’t all be here at the same time,” Reid said. “So that made our date to open two months later, which was challenging. But it also made our opening very welcomed in the community.”
It’s support Reid has been grateful for, especially since her brand new business was not eligible for any of the federal aid programs, something she found frustrating and discouraging.
However, one measure she said did help was the deferral of provincial taxes to Sept. 30.
“It allowed us to free up some cash, and cash flow,” she said. “But that’s also because we’re a small business, and a new business, so we’re on a monthly pay period, where there’s a lot of other businesses that are bigger, and they pay this quarterly or annually, and have definitely been affected much more differently than we have.”
Now a group representing small businesses in B.C. is asking the province to consider further deferrals for taxes that will become due at the end of the month, and possibly partial payment forgiveness, following a survey of members which found one in ten will not be able to pay by then.
Senior policy analyst for The Canadian Federation of Independent Business (CFIB) Muriel Protzer said while their survey found 52 per cent have already paid what they owe, at least 40 per cent have not yet paid, and some have indicated that will not change by the end of the month.
“That is not only extremely stressful, but puts them in a very difficult financial position,” Protzer said, and added other data from their organization has already shown some owners have had to dip into their personal savings, retirement funds, or use credit cards to survive the financial hit of the pandemic. “They have an option to perhaps go further into debt, or incur the interest that comes along with not being able to meet these tax deadlines.”
The controlled-access web survey conducted by the federation, which received responses from 425 B.C. business owners in late August, found just over half felt further extending the deadline for provincial taxes that were initially deferred in March, and forgiving taxes were important for the economic recovery of the province.
Seventy-nine per cent also wanted to see a planned carbon tax increase, which was originally scheduled for April 1 and then postponed, delayed further.
“Our economy really isn’t in a healthy position to take this financial hit,” Protzer said. “We just need to put our foot on the brake right here.”
In March, the province announced businesses with a payroll of over $500,000 could defer their employer health tax payments until Sept. 30. Businesses with a payroll under that threshold are exempt from the tax.
Payment deadlines for the provincial sales tax, municipal and regional district tax on short-term accommodation, motor fuel tax, tobacco tax, and carbon tax were also delayed to Sept. 30.
The province has allocated $1.5 billion for economy recovery, and has been collecting feedback on where the money should go.
President and CEO of the Greater Vancouver Board of Trade Bridgitte Anderson said they also support measures that would help businesses in the short term, such as continued tax deferrals, but also want to see a long term plan for the funds to help strengthen the economy moving forward.
“We’ve got some statistics from our own surveys with our members...that showed about two-thirds of businesses have been relying on some kind of government support,” Anderson said, and added the pandemic has been particularly hard on small businesses . “So as that government support wanes off, it becomes even more important for businesses to have the opportunity to reinvent and to reinvest in their businesses as well.”
The board’s economic recovery plan, which was submitted to the province in the summer, calls for a working capital grant for small businesses, as well as a grant to help with increased staff training costs due to COVID-19, among other wide-ranging measures.
“My understanding is that the B.C. government is getting ready to release its $1.5 billion dollar plan sometime in early September,” Anderson said. “So I would think that we’ll probably hear something in the next week, maybe two weeks at most.”
Finance Minister Carole James was not available for an interview. In an email to CTV News, the ministry said they are reviewing all initial support measures “to see what is necessary for economic recovery," adding if more needs to be done, support will be there.
“Over the next several weeks the province will release its recovery plan for people and businesses,” the email said.
Reid’s store opened its doors in July. She said she’d like to see more government support specifically for new, small businesses, including accessing some of the help made available for other businesses.
“I just don’t think that new small businesses are being heard. Nor do we have time to be knocking on the door of the federal and provincial government to be saying, hey listen to us, because we’re hustling just to keep our doors open and our communities happy,” she said.
Reid added shopping local really means a lot to small business owners right now.
“Seeing your smiling faces come through the door means a lot day to day,” she said. “I’m just really excited for what this will look like post-pandemic world.”
The CFIB is also encouraging local shopping through a campaign called #SmallBusinessEveryDay, which features challenges for consumers such as giving someone a gift card from a local store and buying online from a small business.