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JORDI MORGAN: Step up or tourism, hospitality sectors will be decimated

Tourism is more than just getting people to visit. With the demographic shift and the aging population, Nova Scotia and Canada need new people to live, work and attend university here. Tourism is an obvious gateway.
"If nothing is done, businesses will die in the months ahead, significant aid investments will be lost and the Nova Scotia tourism, hospitality and restaurant sector will be left a shadow of itself," writes Jordi Morgan. - 123RF Stock Photo

“The time for polite conversation has ended.” 

Those were the words of a restaurateur watching his business and the businesses of his colleagues across the province wither away to nothing due to inaction on rent by government.

If nothing is done, businesses will die in the months ahead, significant aid investments will be lost and the Nova Scotia tourism, hospitality and restaurant sector will be left a shadow of itself.

 Since the inception of the Canada Emergency Commercial Rent Agreement, small-business owners have been left hanging by the federal and provincial governments who designed and deployed a program without the teeth necessary to get the job done.

 To work, it requires the agreement of landlords and tenants to each take on 25 per cent of monthly rent, and the federal government would provide the landlord with the other 50 per cent. It is administratively complex and ignores business realities of both parties. It does not work. A better solution is to simply put the money directly into the tenant’s hands to pay the landlord.

 While Nova Scotia led the country in restricting evictions, this has not stopped bad actors from locking doors and using other intimidation tactics on businesses that are already stressed to the max trying to reopen. These small businesses need action from government now, leadership from politicians of all stripes and a plan that is well articulated to eliminate uncertainty.

 The Nova Scotia government communication strategy has evolved from its daily epidemiological updates and funding announcements to little more than an epidemiological update and some loosely defined aspirational goals. This is not the time for ambiguity and nuance. Now is the time for clarity.

 Since the beginning of this pandemic, the provincial government has stepped up in a variety of ways: disallowing evictions during the health order, provincial loans programs and grants, and other initiatives. These have been helpful, but it is the months ahead that will be the toughest, and the provincial government needs to step up on several fronts and articulate a plan.

 Here are a few suggestions from our members.

 Help with rent: This issue is going to be a killer. While the ministerial directive on prohibiting eviction was reasonably effective in setting the tone, Nova Scotia may have to enact specific legislation, as they are in Alberta, Quebec and Ontario, to drive the point home on protecting commercial tenants and facilitating participation in the commercial rent agreement by landlords. A provincial program would also help.

 Buy local: Politicians visiting small businesses is a good start, and I commend the premier for tweeting about getting pizza. However, the rest of cabinet, the opposition, public servants, all of us for that matter, need to set an example. We are seeing it’s easier to scare people into staying home than it is to un-scare them to go out.

 Expand to a regional bubble:  Safely, thoughtfully, but set a date. There are lots of smart people trying to figure out the balance of opening our borders, but ambiguous timelines will accelerate the demise of seasonal business. They need to prepare. If the epidemiology dictates a stop-go-stop, so be it. The dithering is not just frustrating, it is amplifying the uncertainty.

New funding programs:  So far, to save small business, the province has put up around $65 million in direct funding. To give that some context, it’s about the cost of a hospital parking garage and one new elementary school. Yes, there’s also a quarter billion earmarked as “stimulus spending” on infrastructure that will percolate through the economy, but the front end is exclusively in the construction sector.

All the other sectors will need much more help. The province will need to step in with additional supports for tourism, hospitality, non-urgent health care and others who are shouldering additional costs while struggling to generate any revenue. This means actual money to bridge through not only the current lack of business but a potential second wave.

We can do more for those businesses teetering on the abyss. It is certainly a better strategy to keep these businesses alive than letting them die and hoping they come back. Small-business owners power our economy, and while economists pore over the inevitable COVID-19 business casualty figures, our premier should be focused on keeping the acceptable level of business deaths at zero. 

Jordi Morgan is Atlantic vice-president for the Canadian Federation of Independent Business.







 

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