THUNDER BAY -- Seventy-four per cent of businesses in Thunder Bay have annual revenue of less than $99,000 a year.
Martin Wyant of Thunder Bay Ventures says he's "very concerned" about prospects for the survival of some of these businesses because of the COVID-19 pandemic.
Many of them are shut down and not earning any income, while at the same time they must continue to pay operating expenses such as utilities, insurance and rent.
After salaries, rent is their biggest cost.
Wyant is the executive director of Thunder Bay Ventures, the federally-funded local Community Futures Development Corporation.
He says he's aware that some landlords have offered relief to their tenants, but he's heard from a number of business people whose landlords are unwilling or unable to do that.
"The message they've been getting is that they need to keep paying their rent, because the landlord has expenses too. But there are opportunities for landlords in these circumstances," Wyant said in an interview Tuesday.
He suggested they can take advantage of the various government business support programs, or reach out to their own banks to take advantage of skip payment provisions that are being offered.
Wyant is advising landlords to be creative in finding ways to support their struggling tenants.
As an example, he said, rent could be deferred for two months by suspending the lease for that period and adding two months to the term.
"They're still going to get the money that's owing over the course of the lease...if they can reach into the toolbox the government has provided here and use it, many of the tenants would really appreciate that support."
Larger businesses, Wyant said, have greater capacity to be resilient, and are more likely to be eligible for government support such as wage subsidies.
He said revenue figures provided by Statistics Canada show how important smaller enterprises are to Thunder Bay's economy.
Twenty-two percent of local businesses have annual revenue between $100,000 and $500,000 a year.
Combined with those that earn less than $100,000, 96 per cent of all city businesses meet Wyant's criteria for designation as a micro-enterprise.
"The vast majority of businesses in Thunder Bay don't even meet the definition of small businesses. When we think of the need to support the community, that has to come to mind," he said.
Local salon owner calls on the government to step up
Tony Muia is one entrepreneur who hopes the government takes that to heart.
Muia owns Serenity Salon & Wellness on Oliver Road. He had to close his doors on March 13, laying off 12 employees.
He's earning no income but must continue to pay almost $4,000 a month in rent, plus utilities.
Muia reached out to his landlord to make some temporary arrangements, and was told he'll be charged 24 per cent interest on any missed payments during the mandatory shutdown.
He feels the government could help smaller businesses by giving incentives to property-owners.
"We rent our location from a big corporation, and there has been nothing put in place by the feds or the provincial government as far as our leases are concerned. Why have they not offered commercial landlords some type of rebate, such as a rebate on the HST on the rent that they would forgive for us, or some type of tax break where they get 100 per cent of whatever, say, my rent is on their income tax?", he asked.
Muia predicts numerous operators will be forced into bankruptcy unless something is done about commercial rents.
He's been frustrated, he said, in efforts to contact federal and provincial politicians about the issue.
"I''ve sent numerous emails. I've got nothing in response. I am disgusted," Muia said.
He said government programs that might be available to him don't fit his needs.
"What they've launched as of last week was a $40,000 loan, $10,000 of which will be excused. Okay, so I use the $30,000 to pay my $4,000 monthly rent, but I have no income coming in. How does that make sense? It does not."
Muia said he has to find some way to pay his rent, because if he doesn't, he'll "lose everything," potentially including all the equipment in his salon.
"I've spoken to other tenants whose landlords feel terrible collecting money from their tenants...I'm not upset with my landlord. I'm upset with the government not taking care of him. If the government took care of him, he would take care of me."
Thunder Bay is facing a huge crisis, Muia said, because of the plight the small business sector finds itself in with respect to rent.
"Nobody's taking care of us. Nobody."
