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Small business owners in the Northwest Territories strained by collapsing demand amid a global pandemic may see some relief from Ottawa soon.

The federal government has committed to raising its crisis wage subsidy from 10 per cent to 75 per cent, offering up to $40,000 in loans that will be interest free for one year, and deferring GST/HST and import/export fees until June, Prime Minister Justin Trudeau announced Friday.

Renee Comeau, executive director of the NWT Chamber of Commerce, called it a “great step.” 

The chamber recently co-signed a letter with other business associations asking for federal support to stave off layoffs. She saw Ottawa’s response as answering those calls, but added there was more work to be done to keep businesses afloat. 

It will come as a relief to stressed businesses worried over payroll expenses and costs like rent – which also should be addressed, she said.

Meanwhile, the interest-free loan would be essential as businesses look to cover incoming payments, she said. 

“It’s a quick and easy way for businesses to get cash flow injected back in so that they’re able to catch up with their supply chain,” she said. 

While some NWT business owners shared relief with News/North, others were still buckling under the economic crunch.

“A huge boost,” Fort Smith business owner says

Laurie Young, owner of Fort Smith’s The Rusty Raven, said the assistance could save some staff positions at her business.

“The 75 per cent of the wage that I pay my staff is better than the 60 per cent they’d get from unemployment,” she said.

Friday’s news came after Young decided to close shop last Saturday. Ottawa’s originally proposed 10 per cent was little more than a token, she said, and wouldn’t have made much difference. The update pleased her.

“That’s going to be a huge boost to us. Having absolutely no income coming in, it makes it pretty rough,” she said.

She was less concerned with federal loan programs, saying she would work with NWT’s Business Development and Investment Corporation (BDIC) first.

At the territorial level, Minister of Finance Caroline Wawzonek on March 20 said the corporation would also offer low interest loans and was deferring payments for up to three months between April 1 and Sept. 30.

Infrastructure Minister Katrina Nokleby, left, looks on as Finance Minister Caroline Wawzonek speaks to reporters on March 20 at the legislative assembly.
Nick Pearce/NNSL photo

For Young, however, it’s always a fight for staff in a small town. If some residents choose to stay in Fort Smith, or opt to return because there’s work, it will make a difference.

“Hanging on by your teeth”

John Doody, who co-owns The Dancing Moose Cafe with his wife in Yellowknife, didn’t see the benefit for his business.

“For restaurants in town, it’s essentially useless,” he said.

There simply isn’t enough demand. When the crisis began, he felt the business may be able to continue; the crowds remained strong.

But within days the cafe was down to one or two tables. Considering the loan aspect, Dooby said he would rather draw on savings, but that it could help retailers.

“A wage subsidy now would just mean we’re paying people to stand around,” he said. “For us, it’s useless.”

Wherever possible, small business owners need some slack, according to Mary Beckett, a longtime consultant and business owner in Inuvik who ran as NWT’s federal NDP candidate last fall.

“I feel heartbroken for everybody who runs businesses,” she said. “But I know from running a business for many, many, many years, there’s always cycles.

“It’s always a case of hanging on by your teeth until things come around again.”

She said new businesses or those already close to the wire, particularly in small communities, may not be able to bounce back. But those with strong business models prior to the crisis should be able weather the coming weeks or months until demand recovers, she said.

Cash flow a pressing concern

For others, the economic impact setting in as residents stay home has been devastating.

Terry Rowe, general manager of the Ptarmigan Inn in Hay River, felt the pandemic’s economic strain last week, when he personally laid off about 50 staff. It’s a temporary measure, he told News/North, but a hard one.

Much of it stems steps responding to the public health crisis that led the business to shutter non-essential services, including its restaurant and gym.

It continues to offer take-out, but that’s slowed alongside overnight stays at the hotel. That means there’s little demand left to support staff as catering and events cancel as borders close.

The staff were understanding of the circumstances, but it’s been “stressful,” he said.

He hoped to apply to government support soon. However, in the future, he said, he may be “pulling (his) hair out” as a result of the damage to the business’ cash flow, he said.

Utilities, taxes, and other costs waited just ahead, with little revenue to balance them.

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Nick Pearce

Nick Pearce is a writer and reporter in Yellowknife, looking for unique stories on the environment and people that make up the North. He's a graduate of Queen's University, where he studied Global Development...

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