Small businesses are the fabric of our communities -- be a part of their recovery. Live local, buy local.

MyCityLife.ca
March 18, 2021
Cece M. Scott

Small businesses are like the 16 Community Chests in the popular game of Monopoly, a board game where players are in a constant battle to keep passing GO as a means to procuring ever-increasing valuable assets as they travel around the board. Most of the cards in the Community Chests, however, are stingy in their monetary payments, a decided difference from drawing a card from Monopoly’s Chance pile, which often lands the player in a more favourable spot.

In these challenging times of COVID-19, ones which have had small businesses “going directly to jail” (lockdown), have Ontario’s governmental subsidies, which in Monopoly parlay into the bank of the government acting as a temporary “mint” to print more notes, been a strategy that strains the assets of Vaughan, Ont.’s small businesses’ Community Chests, or instead, one that proffers the breadth and wealth of Chance?

Well, remember those lazy Saturday afternoons strolling down the main streets of Vaughan, browsing the diverse options of stores and delighting in the fanciful treasures and must-have outfits?

Or how about the after-work shopping sprees to get the hors d’oeuvres for the party and a gift for the host, or the person whose birthday or celebration the party is for?

With lockdown restrictions easing as the rates of COVID-19 infections decrease, which Vaughan small business stores and services, ones which represent approximately 81 per cent of the businesses in Vaughan, are the ones at the top of your list to patronize as winter turns into spring?

Most importantly, do you know which businesses in your community have stayed afloat during the pandemic, or which services have been hardest hit?

The good news is that the greater portion of businesses in Vaughan, those in the retail sector at least, are making it through the pandemic, albeit with some major challenges attached.

“There is no question that Vaughan’s small business community has felt the impact of COVID-19,” says Vaughan’s Mayor Maurizio Bevilacqua. “However, I have been extremely impressed by their ability to adapt. They are the backbone of our economy and have shown great capacity to be resourceful, ready and resilient. Working together to get support from the community and all levels of government has been key in our fight against COVID-19.”

And while Brian Shifman, president and CEO of the Vaughan Chamber of Commerce, states “that in general, insolvencies are at historical lows because of support, including subsidies, from all levels of government,” the impact and challenges to the hospitality and services sectors is highly concerning.

Why have some industry sectors been hit so much harder than others?

Ultimately, it comes down to the definition of who and what are essential services, which, for many businesses, smacks of inequality. And within the deemed “non-essential” industry categories, was the importance of amenities such as skin care, work-out facilities, clothing stores and venues that honour special family events even considered, relative to their importance to the well-being and mental health of us all?

“Skin-care treatments generate approximately 80 per cent of our total revenue,” says Ashley Perri, owner of Skinprovement Medi Spa & Laser Clinic. “When the initial shutdown occurred, we pivoted our business and pushed forward with an e-commerce website to continue generating revenue through product sales. But the government’s staged approach disproportionately affected our business, as we had to wait until July before being able to off er treatments without face coverings. It is even more frustrating given the fact that skin-care clinics are known for adhering to very strict protocols in sanitation, even prior to the pandemic.”

Daniela Hofmann, owner of the medical spa Freedom Medi-Spa, concurs. “It’s frustrating and tough being a business owner and having these shutdowns. Everything comes to a grinding halt,” she says. “I think it’s unfair. I would want them (premier and mayor) to look at industries as a whole and deem them depending on risk. Low risk should stay open, if you have a 10 per cent or less chance. If you’re deemed low to no-risk, like I would say we are [we should be able to stay open]. Believe me, I wouldn’t want to be here [if I didn’t feel safe to work]. I have people in my life who we do need to worry about. And I wouldn’t want to be working if I felt like it was dangerous. And my team feels the same way. We feel completely safe being here with the protocols we have in place. I think they blanketed the lockdown just because they don’t know what to do. And that was forgivable last year. But a year later, that’s not forgivable anymore.”

The fitness sector has also been extremely hard hit by the stop-and-start, stop-and-start, and stop-again government lockdowns.

Dimitri Giankoulas, owner of Pure Motivation Fitness, shares how the closure of his business affected his overall well-being.

“I was going to my gym, and the lights were off, and nobody was there,” Giankoulas says. “Beyond reasonable doubt, we make impact and we do so in three powerful words, which are: ‘We change lives.’ People go to the gym, some for esthetic reasons, some to lose weight, gain weight, but the mental capacity, the mental fortitude that people gain by being able to lead their club, go to a community, feel like they’re part of something. Premier Doug Ford talks about being all about small businesses, but when you’re crushing businesses and you’re telling them to buy PPE, we’re spending $2,000 a month on hand sanitizers, paper towels, in order to be open and then force them to shut down.”

Northern Karate Schools Rutherford location is owned by Cos Vona, who has been a small business owner since 1972.

“All of our staff are students, and when we were closed, we had to lay them all off. It is a hard thing to do, as a lot of them have been with us for a long time,” Vona says.

“This shutdown is something that affects everybody in different ways, of course, but on the same token, you know, there’s a famous Buddhist saying that says, ‘Never to the extremes, always to the middle path,’ and extremes are never good for anything, and we have to have a balance of living our lives healthy, and being cooped up a home is unhealthy in most cases, and so you have to allow something so that people can live their lives, because, not only the economical cost, but also the mental problems and illness are going to cost us more than the pandemic will cost small business,” says Vona.

“It’s crazy, a chaotic situation,” he says. “We work with people in terms of their physical and mental well-being. Th at’s what martial arts is all about. We also help kids who have anxieties and different disorders, and we’ve done phenomenal things with them. We know how our business benefits our students, but our hands are tied. We’re in a pandemic, and there’s nothing more important than physical and mental well-being.”

When discussing which businesses should be included within the essential services categories, frustration, disappointment and scathing opinions resonate.

“Why should the LCBO, Dollarama and Walmart be deemed essential, and we’re not? It’s almost an insult to our profession,” says Giankoulas.

“We feed our families, We pay our rent, we Pay our workers -- it Doesn’t matter what We sell. It doesn’t Matter if we’re selling Food or care bears. It Doesn’t matter what We’re selling -- we Are all essential”Derrick Noble of NobleToyz in Bolton, Ont., is hopping mad about the hows and the whos of who has been deemed essential. In fact, after the initial waves of lockdowns in early 2020, Noble has opened his store in defiance of governmental lockdown orders.

“Anyone who owns a business is essential,” Noble says. “We feed our families, we pay our rent, we pay our workers -- it doesn’t matter what we sell. It doesn’t matter if we’re selling food or Care Bears. It doesn’t matter what we’re selling -- we are all essential.”

Manny Molina, manager of Fiorio’s Hair Salon’s Vaughan location says, “We have rules and regulations that the government has implemented, and our salon, and I’m sure every salon in the city and in the country, is taking proper screening procedures. We check our clients temperature when they walk in, we make them sign a form that we keep on file for a month. From my knowledge, since the lockdown, there hasn’t been outbreaks in hair salons. That makes it harder to understand why we’re the first ones to shut down. Meanwhile, you’re allowing huge big-box stores to remain open with hundreds of people in there who are not practising social distancing, the stores are overcrowded and they’re not taking proper measures. I don’t know about you, but whenever I go to a big-box store, no ones there taking my temperature. Nobody’s asking me [screening] questions or asking if I’ve been around people with COVID-19, or if I have symptoms. We take all these strict measurements and we’re the first ones to be locked down. I don’t think it’s fair.”

Retail businesses, ones that sell hard goods and fashion wear, are also suffering deep financial challenges.

Doriano Di Carlo, co-founder of Grafic, a designer clothing store, says the forced shutdowns have affected his business in many ways, some good and some bad.

“The forced shutdown has affected us in many ways, some good, some bad. Yes, the shutdown has affected our brick-and-mortar stores, but we have chosen to use the time in a positive way and adapt our business to satisfying our clients needs. It allowed us to grow the connection with our clients’ in a new ways through virtual personal shopping experiences.”

Our message to the mayor and the premier: “Do everything possible to help support local business and keep restrictive measures fair for everyone,” he says.

Two other pre-eminent longstanding fashion clothing stores in Vaughan that have experienced significant drops in sales are Zero 20 and Per Lui.

“My accountant came into the store recently and did our year-end,” says Zero 20 owner, Santina Mariani. “He told me my sales were down by 40 per cent. Because churches cancelled a lot of the sacraments, and because people couldn’t gather for celebrations like birthdays or weddings, the need for dress-up clothing totally vanished. Dress-up clothing accounts for 60 per cent of our business, with casual clothing accounting for 40 per cent. So, with no formal occasions like communions and baptisms, that part of our business has dried up. We have laid off 10 people. And at this point, I don’t know if that’s going to be permanent. If celebratory gatherings are not allowed for a long time, what are we going to do?”

Per Lui, an upscale men’s shop in Woodbridge, Ont., found that the second lockdown in December significantly affected its Christmas business. “You can only do so much business online,” says owner, Sandy Mirotti. “Our wedding business is down by 75 per cent. Th ere’s certainly a lot of anxiety, you know, because it’s unknown what’s going to happen tomorrow. Hopefully by September, with the new vaccines, we can get back to what it used to be, and everybody can start travelling and enjoy vacations and get-togethers and staying with family.”

While opinions may vary on which sectors have been the absolute hardest hit during this year-long pandemic, everyone is in agreement that the hospitality sector, a big part of the Vaughan community, has been crippled.

“We need sector-specific funding for certain sectors, such as hospitality, which has been closed holistically the entire time, since the beginning of the pandemic,” Shifman says.

Carlo Parentela, owner of Chateau Le Jardin, couldn’t agree more.

“We have 200 people out of work, we’re on corporate welfare -- it’s terrible,” Parentela says. “And the bills, which total close to $400,000 a month, are still coming in, even though we’re not open. We’re having a hard time. It’s not fair that 20 per cent of businesses are closed down, and the other 80 per cent are making so much money. Th e government needs to help us survive, but they’re not doing so.”

While Parentela doesn’t think that his business is an essential service, per se, he does think that the opportunity for people to get together and share happy times is important to the general wellbeing and mental health of everyone.

Given that the hospitality industry’s raison d’etre is dependent on social gatherings, limited numbers and social distancing seem to negate its very purpose.

“All the programs released to help small businesses have completely missed our sector,” states Ramy Sallal, owner of the event venue The Arlington Estate. “Most of our payroll expenses exceed $1.5 million, which does not qualify us to get the $40,000 loan. Our rent/mortgages are in excess of $100,000 per month, which doesn’t allow us to ask our landlords/banks for relief. They cannot apply for the rent subsidy due to the $50,000 gross rent limit set by the government. There should have been an ‘up-to’ strategy, which would have helped us considerably. We cannot take advantage of the 75 per cent wage subsidy because we are unable to open and rehire any staff , and so we have lost 100 per cent of our business since March 2020. The BDC and EDC loans are very difficult to qualify for since they are not 100 per cent government-backed and come with high interest rates and difficult qualifications. We hoped for some relief over these past 11 months while burning through our cash reserves, but nothing has been offered to help the hospitality sector. I feel that the government is only interested in us as a sector when they need us.”

With the hundreds of thousands of vaccines coming into Canada on a regular basis, the hopes for an economic rebound are front and centre.

What will the recovery look like as we move through the series of gradual re-openings?

After speaking with several economists, Shifman says signs point to a K-recovery curve.

“After a major economic recession, economists forecast what the new economy will look like going forward,” Shifman says. “Letters such as V, U, Z, W, L and K are used. What I am hearing from my conversations with the experts is that the recovery from the COVID-19 pandemic will look most like a K-shape, which basically states that certain sectors such as ICT (information, communications, technology) and financial services will recover at a faster rate than small businesses and sectors directly affected by COVID-19. We are going to see a strong recovery in some sectors, with many sectors taking a lot longer to recover.”

This is a situation that harks back to the old adage “The rich get richer, and the poor get poorer.”

MarketWatch states that different parts of the economy move in opposite directions during a K recovery and is centred on three key factors: industry sectors, effective treatment of the vaccine and government stimulus.

“The time for austerity measures is not anytime soon,” Shifman says.