Here’s why Ottawa’s pandemic aid isn’t finding its way to Black-owned businesses

Posted on June 29, 2020 in Equality Delivery System

Source: — Authors: – Politics/Opinion

As the pandemic lockdown took hold of the country’s economy this spring, Nadine Spencer and the Black Business and Professional Association that she heads quickly decided to open up their helpline for 24 hours a day.

Spencer took the calls herself during off-hours, with distraught business owners sometimes reaching out in the middle of the night just to talk things through with someone.

The hotline offers tips to help navigate the many government programs, loans and lines of credit on offer during the pandemic. More than that, though, it offers a sympathetic ear to small-business owners who are on the brink.

“It’s just despair,” Spencer says.

And that’s not just from seeing business evaporate overnight due to the lockdown, she says. It’s despair compounded by systemic racism that steadily undermined economic growth and access to capital during the before times, and is now exacerbated by the pandemic.

After some research to see if Spencer’s suspicions were true, the association found that, yes indeed, Black businesses are not getting the kind of financial support that the rest of the country’s private sector is getting from governments these days — despite the commitments from federal politicians to extend a hand to everyone who needs it, and repeated vows to act quickly on systemic racism.

The association surveyed 120 members across Ontario at the end of March and beginning of April, mirroring a series of questions asked to the broader small-business sector by the Canadian Federation of Independent Business. And while Spencer warns that her association’s findings aren’t scientific, they’re alarming enough to warrant attention. “Glaring,” she calls the results, “which is regretful.”

The association found that 80 per cent of its respondents said they couldn’t be helped by the federal government’s wage subsidy, compared to 37 per cent in the broader private sector at the time. The wage subsidy is Ottawa’s marquee instrument of aid for companies struggling to stay afloat, and covers 75 per cent of the payroll of firms that have seen their revenues drop by 30 per cent.

The association also found that four out of five Black businesses in its survey didn’t believe they would qualify for emergency business loans, compared to just one in five in the broader private sector. The emergency loans are the primary tool Ottawa uses for small business support.

And the association found that 80 per cent of its respondents didn’t have enough cash on hand to pay their April bills, 85 per cent said they wouldn’t be able to survive another month, and 98 per cent said they didn’t have the capacity to take on more debt. Those numbers are twice as high as the broader private sector.

So what’s happening here? Obviously, the government didn’t insert a clause into its pandemic support telling lenders and officials to withhold the funding from Black-run businesses. But Spencer says many small homegrown businesses run by Black entrepreneurs don’t have payroll documentation that fits the bill. Or they operate in an informal way, often using cash until they can get well-established. Or they know they need to go through local bankers to have access to the government loans, and the bankers are suspicious from the get-go.

To their credit, federal leaders realize that the panic of the pandemic and the myriad of government programs mean many businesses are stymied by the labyrinth. Ottawa has set up a hotline of its own (1-866-989-1080) staffed by chartered accountants. Not 24 hours a day with the personal touch like Spencer’s, but still.

Plus, the government has tweaked and expanded and revised its programs fairly quickly in response to feedback from the private sector.

And when the Parliamentary Black Caucus produced a to-do list for the prime minister last week, in the wake of outcry over the killing of George Floyd, Justin Trudeau committed to acting right away, starting with the economy.

“The success of Black-owned businesses, Black entrepreneurs and young Black professionals has been something I’ve had many discussions on over the past couple of years with members of the Black community in Canada,” Trudeau said. “We will be moving forward on a number of those recommendations.”

That list included requests to target economic development aid directly to Black business, and to allot a proportion of procurement contract for Black suppliers.

It’s been done for Indigenous business, but the Liberals want to consult more with community leaders before they commit to concrete measures. The talks, they say, are moving at an accelerated pace.

The problem is, the damage from the pandemic is moving far faster than bureaucracy, and for Black communities, it’s devastating.

Already, they’ve been feeling the brunt of the virus as it spread through crowded neighbourhoods in Toronto and Montreal, and through front-line occupations such as personal support work. Now, their entrepreneurial attempts to innovate their way through an economic crisis face barriers, too — barriers that we know how to tear down.

Tags: , , ,

This entry was posted on Monday, June 29th, 2020 at 4:49 pm and is filed under Equality Delivery System. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Leave a Reply