Can Ontario Small Business Survive COVID-19?
>> Steve: A RECENT SURVEY BY THE CANADIAN FEDERATION OF INDEPENDENT BUSINESS WARNED IT WAS LIKELY THAT MORE THAN 180,000 SMALL BUSINESSES ACROSS THE COUNTRY WOULD NOT MAKE IT THROUGH THIS PANDEMIC. AND FOR ONTARIO, THEY SAID, THAT COULD MEAN SOMEWHERE ON THE ORDER OF 20 PERCENT OF SUCH ENTERPRISES. WITH US NOW FOR MORE: IN KINGSTON, ONTARIO: BECKY REUBER, PROFESSOR OF STRATEGIC MANAGEMENT AT THE UNIVERSITY OF TORONTO'S ROTMAN SCHOOL OF MANAGEMENT; IN THE JUNCTION OF THE CAPITAL CITY: LANGTON WILLMS, THE OWNER OF GERHARD, A MEN'S CLOTHING SHOP THAT SPECIALIZES IN MADE-IN-CANADA ONLY MENSWEAR; AND JOHN KIRU IS HERE, HE'S EXECUTIVE DIRECTOR OF THE TORONTO ASSOCIATION OF BUSINESS IMPROVEMENT AREAS. WE'RE GLAD TO HAVE ALL THREE OF YOU ON THIS PROGRAM TONIGHT FOR, WELL, LET'S FACE IT, THIS IS A DIRE CONVERSATION ABOUT A VERY SERIOUS SET OF CIRCUMSTANCES. LET'S PUT UP SOME OF THESE NUMBERS FROM THE CFIB AND JUST SHARE WITH OUR VIEWERS AND LISTENERS THE NATURE OF WHAT YOU FOLKS ARE LOOKING AT RIGHT NOW.
THIS WAS RELEASED LAST WEEK, THE 21ST OF JANUARY, AND HERE ARE THE RESULTS: 37%, MORE THAN A THIRD OF SMALL BUSINESSES ARE FULLY OPENED IN THE PROVINCE OF ONTARIO, BUT COMPARE THAT TO BRITISH COLUMBIA WHERE 64% OF BUSINESSES ARE FULLY OPEN. 75,000 BUSINESSES, 75,000, ARE AT RISK OF SHUTTERING FOR GOOD IN THE PROVINCE OF ONTARIO. 2.4 MILLION JOBS ARE AT RISK IN
CANADA, WHICH TRANSLATES TO ABOUT 20% OF PRIVATE SECTOR JOBS THAT ARE AT RISK IN THIS COUNTRY. I JUST NEED TO START WITH SOME GENERAL REACTION TO ALL OF THAT. LANGTON, COME ON IN HERE. YOU HEAR THOSE NUMBERS. WHAT DO YOU THINK? >> Langton Willms: I MEAN, IT SOUNDS RIGHT. THE JUNCTION IS COMPLETELY PAPERED UP RIGHT NOW.
A LOT OF THE BUSINESSES HAVE GONE UNDER. I CAN SEE THAT COMMERCIAL RENTAL RATES HAVE REALLY PLUMMETED, WHICH I GUESS IS A GOOD THING IN AND OF ITSELF. BUT HONESTLY THE STREET, ESPECIALLY DURING THE LOCKDOWNS, THE STREET IS JUST DEAD. THE STREETSCAPE LOOKS HOLLOWED OUT. YEAH, NO, THE NUMBERS MAKE SENSE TO ME. >> Steve: JOHN, HOW ABOUT YOU? YOU HEAR THOSE NUMBERS AND YOU THINK WHAT? >> John Kiru: THEY'RE ONLY GOING TO GET AMPLIFIED AS WE GO DEEPER INTO THIS THING.
THEY ARE REFLECTIVE OF WHAT I AM HEARING OUT THERE AS WELL, AND TO HAVE BEEN SHUT DOWN THROUGH THE MOST PROSPEROUS, IF YOU WILL, OR MAKE HAY WHILE THE WEATHER IS GOOD, THE PRE-CHRISTMAS SEASON, IS GOING TO PUT MORE OF THOSE BUSINESSES IN PERIL. JANUARY, FEBRUARY, MARCH ARE TRADITIONALLY THE CHALLENGING TIMES FOR BUSINESS, AND THAT'S WHEN WE SEE SOME CLOSURES. BUT THIS HAS ONLY AMPLIFIED THAT. SO THOSE NUMBERS ARE QUITE REFLECTIVE OF WHAT I'M HEARING. >> Steve: BECKY REUBER, YOUR INITIAL REACTION? >> Becky Reuber: YEAH, I AGREE TOO. I THINK THE NUMBERS ARE HEARTBREAKING FOR BUSINESS OWNERS, AND I THINK IT'S GOOD, THOUGH, TO HAVE OUT THERE TO DRAW ATTENTION TO PEOPLE SO THAT IF THEY WANT -- YOU KNOW, EVERYBODY WANTS THEIR SMALL BUSINESS SECTOR, THE RETAIL SECTOR IN THEIR NEIGHBOURHOOD TO SUCCEED, AND SO DRAWING ATTENTION TO THAT, BECAUSE THERE ARE WAYS THAT PEOPLE CAN HELP THAT.
BUT THE NUMBERS ARE DEVASTATING. >> Steve: LANGTON, JUST CHECKING. YOU'RE IN YOUR PLACE RIGHT NOW, RIGHT? YOU'RE IN YOUR STORE? >> Langton Willms: YEAH, YEAH.
YOU CAN SEE WE'RE CLOSED. IT'S TOO EARLY ANYWAY. BUT THE GATE STAYS CLOSED ALL DAY.
>> Steve: I WAS GOING TO SAY, YOU'RE SHUT AS TIGHT AS A DRUM RIGHT NOW, RIGHT? >> THAT'S RIGHT. NOBODY IS ALLOWED IN. >> Steve: HOW ARE YOU MANAGING TO STAY AFLOAT? >> INITIALLY I FELT BAD SAYING THIS. WE'RE DOING GREAT. LIKE, THE YEAR -- THE YEAR HAS ACTUALLY -- LIKE, 2020 WAS GOOD FOR US.
WE QUICKLY PIVOTED TO ONLINE. WE WERE ALREADY ABOUT 40% ONLINE BEFORE THE PANDEMIC STRUCK. NOW WE'RE 100%.
IT WAS A LITTLE BIT OF A SCRAMBLE GETTING SET UP RIGHT AT FIRST BUT WE'VE SETTLED INTO IT QUITE COMFORTABLY. I WAS DISCUSSING WITH LIANE EARLIER, THOUGH, THE MAIN CHALLENGES RIGHT NOW WITH -- I MEAN, IT'S GREAT. I FEEL VERY FORTUNATE TO HAVE BEEN ABLE TO PIVOT SO QUICKLY TO A DIGITAL BUSINESS MODEL -- >> Steve: LET ME FOLLOW UP ON THAT, IF I CAN, LANGTON.
THE LEANN IS OUR PRODUCER, YOU HAD A PREINTERVIEW WITH HER. THAT'S WHO YOU'RE REFERRING TO, I PRESUME. THIS IS ONE THING I DON'T GET.
YOU'RE IN THE CLOTHING BUSINESS. PEOPLE NEED, I WOULD HAVE THOUGHT, PEOPLE NEED TO TRY THIS STUFF ON, THEY NEED TO LOOK AT THEMSELVES IN A MIRROR, THEY NEED TO SEE IF IT WORKS FOR THEM. HOW DO YOU DO ALL OF THAT ONLINE? >> YES.
ONE OF THE CHALLENGES IS, WHEN YOU PIVOT TO AN ONLINE BUSINESS MODEL, YOU NO LONGER COMPETE -- OKAY, SO WE SELL MADE-IN-CANADA CLOTHING. THAT'S VERY IMPORTANT TO ME, IT'S VERY IMPORTANT TO MY CLIENTELE. MY CLIENTS APPRECIATE THAT AND THEY APPRECIATE THE SORT OF NEIGHBOURHOOD/COMMUNITY FEEL THAT THE SHOP OFFERS.
WHEN YOU GO ONLINE, THOUGH, IT'S A COMPLETELY DIFFERENT CLIENTELE. SO PEOPLE IN THE NEIGHBOURHOOD VALUE WHAT WE'RE TRYING TO DO FROM A SORT OF SOCIAL, ENVIRONMENTAL, ECONOMIC PERSPECTIVE. ONLINE, I'M NOT SAYING I DON'T HAVE ONLINE CUSTOMERS WHO DON'T DO IT, BUT OUR INTERNATIONAL CLIENTELE IS MORE INTERESTED IN THE BRANDS THAT WE HAVE BECAUSE OF THEIR -- THEY'RE COOL, FOR LACK OF A BETTER WORD. SO THEY DON'T REALLY CARE THAT THE PRODUCT IS MADE IN CANADA. SOME DO.
MOST DON'T. BUT, YOU KNOW, FOR EXAMPLE, THEY'LL BUY THE BRAND BECAUSE IT HAS SOME INTERNATIONAL CACHET. WE SELECTED OUR BRANDS WITH THAT CRITERIA IN MIND. MADE IN CANADA. I'M SERVING A DIFFERENT AUDIENCE NOW.
WE CAN GET INTO THIS LATER IF YOUR TIME PERMITS BUT AT A SERIOUS LOSS TO MY MARGINS. >> Steve: OKAY. JOHN, THAT'S AN EXAMPLE OF ONE PARTICULAR BUSINESS. MAYBE YOU COULD GIVE US THE BROADER PICTURE RIGHT NOW. HOW EASILY OR WITH HOW MUCH DIFFICULTY HAVE THE BUSINESSES THAT YOU REPRESENT -- THIS IS THE WORD OF 2021 -- PIVOTED TO TRY TO STAY AFLOAT? >> John Kiru: YEAH. AND GOING DIGITAL HAS BEEN THE WAY TO GO.
EVEN PRO-COVID WE REALIZED THE AMAZONS AND OTHERS OUT THERE, WE HAVE DEVELOPED DIGITAL MAIN STREET, WHICH IS A TOOL WITH THE ASSISTANCE OF THE CITY OF TORONTO AND BOTH THE FEDERAL AND PROVINCIAL GOVERNMENT, WE'VE BEEN ABLE TO IMPLEMENT THIS OUT ACROSS THE BUSINESS COMMUNITY, THE SMALL BUSINESS COMMUNITY, FOR AN OPPORTUNITY FOR THEM TO START UP A STORE, WHEN THEY MIGHT NOT HAVE THOUGHT OF IT, PROVIDING THEM WITH THE TOOLS AND THE ASSISTANCE TO PIVOT TO THAT. AND MANY HAVE. WE'VE HAD THOUSANDS OF BUSINESSES DO THAT. SOME DO IT BETTER THAN OTHERS, BUT THERE IS THAT OPPORTUNITY, AND THAT SEEMS TO BE THE AREA OF THOSE BUSINESSES THAT ARE SURVIVING THAT HAVE PIVOTED BECAUSE, DEPENDING ON JUST PHONE CALLS OR, YOU KNOW, PEOPLE KNOCKING ON THE DOOR AND TRYING TO PICK UP SOMETHING IS NOT ENOUGH TO KEEP PEOPLE IN BUSINESS. SO PIVOTING TO ONLINE HAS BY FAR BEEN THE MOST EFFECTIVE WAY OF TRYING TO HELP BUSINESSES STAY IN BUSINESS. AND DIGITAL MAIN STREET, QUITE FRANKLY, IS THE TOOL THAT WE'VE PUT OUT THERE, AND WE HAVE HELPED A SIGNIFICANT NUMBER OF BUSINESSES ACROSS THE PROVINCE.
>> Steve: OKAY. TO THAT END, PROFESSOR REUBER, CLEARLY NOT EVERYBODY IS DOING BADLY DURING THIS PANDEMIC. THERE ARE SOME BUSINESSES THAT ARE FIGURING IT OUT, AND THERE ARE SOME BUSINESSES THAT ARE DOING PRETTY WELL. MAYBE YOU COULD LET US IN ON SOME OF THAT.
WHICH WOULD BE THE SUCCESS STORIES IN AN ECONOMY THE LIKES OF WHICH WE'RE LIVING THROUGH RIGHT NOW? >> Becky Reuber: WELL, I THINK JUST THE ONES THAT SUCCEED ARE THE ONES THAT ARE INVENTIVE AND THE ONES THAT CAN THINK OF WAYS TO TAKE WHAT THEY HAVE AND BE ABLE TO PIVOT TO SOMETHING ELSE. FOR EXAMPLE, YOU KNOW, ANOTHER EXAMPLE OF A SERVICE BUSINESS IS ESCAPE ROOM. I DON'T KNOW IF YOU'VE EVER PLAYED IN ESCAPE ROOM, BUT IT'S -- YOU GO INTO -- IT'S A COMMERCIAL BUSINESS. YOU GO INTO A ROOM, YOU SOLVE SOME PUZZLES, AND YOU TRY TO ESCAPE IN AN HOUR. WELL, THERE COULDN'T BE A WORSE BUSINESS UNDER COVID BECAUSE A WHOLE BUNCH OF UNRELATED PEOPLE ARE TRAPPED IN A ROOM TOGETHER. BUT THERE ARE ESCAPE ROOMS IN TORONTO THAT NOW HAVE PIVOTED ONLINE, AND SO THEY PUT AN EMPLOYEE IN THE ROOM WITH A CAMERA AND FRIENDS AND FAMILY THAT ARE PLAYING THE ESCAPE ROOM ARE ON ZOOM WATCHING THIS.
SO IT'S ESSENTIALLY THE SAME GAME, BUT YOU'RE DOING IT REMOTELY. YOU KNOW, LIKE THE CLOTHING RETAILER, THEY ARE ABLE NOW TO SELL TO FOREIGN MARKETS. IT'S INTERESTING BECAUSE IN THEIR PIVOT THEY'VE ALSO BEEN ABLE TO EXPAND THEIR BUSINESS BEYOND CANADA, BECAUSE NOTHING IS MORE PHYSICAL, OF COURSE, THAN AN ESCAPE ROOM. I KNEW SOMEONE IN BOSTON THAT WAS PLAYING IT.
>> Steve: THAT CAN'T BE AS MUCH FUN AS THE REAL THING, BUT AT LEAST IT'S SOMETHING, I GUESS, EH? >> SOMETHING, YEAH, OF COURSE, YEAH. >> Langton Willms: NOT NEARLY AS PROFITABLE. >> Steve: NOT NEARLY AS PROFITABLE? >> WELL, IT'S LIKE WITH RESTAURANTS, LIKE? LIKE SWITCHING TO A TAKEOUT MODEL AND EVERYONE WAS CONGRATULATING THE GOVERNMENT ON ALLOWING RESTAURANTS TO CONTINUE SERVING ALCOHOL WITH TAKE-OUT, GOING INTO THE FUTURE. BUT, YOU KNOW, IT'S A SORRY EXCUSE -- IT'S A SORRY SUBSTITUTION FOR WHAT THEY'VE LOST.
IT'S BEEN THE SAME WAY WITH OUR BUSINESS. YOU KNOW, IT'S WONDERFUL THAT WE'VE BEEN ABLE TO KEEP OUR REVENUES ACTUALLY UP ON 2019 THROUGHOUT 2020, BUT REVENUE AND PROFIT ARE TOO VERY DIFFERENT THINGS. SO e-COMMERCE IS AN INTERESTING MODEL. THE ONLY PEOPLE WHO WIN AT E-COMMERCE ARE PEOPLE WHO CAN DO IT AT SCALE.
MY SHIPPING COSTS ARE OUTRAGEOUS. THE RATES THAT I PAY CREDIT CARD PROCESSING COMPANIES GO UP WHEN I DO THINGS ONLINE REMOTELY BECAUSE THEN A FRAUD SURCHARGE IS ADDED TO IT. MY COSTS ARE THROUGH THE ROOF.
LIKE, MY REVENUE -- SURE, IT WAS UP ON 2019. BUT 2020 WASN'T PROFITABLE. >> Steve: LANGTON, WHILE YOU'VE GOT THE FLOOR, LET ME ASK YOU ABOUT ANOTHER ASPECT OF YOUR BUSINESS. BECAUSE I GATHER ONE OF YOUR BIG CALLING CARDS IS THAT ALL OF YOUR STUFF IS MADE IN CANADA.
WHERE IS THAT AT RIGHT NOW IN TERMS OF THAT BEING A BIG SELLING POINT? >> IN TERMS OF IT BEING A BIG SELLING POINT? WELL, I MEAN, IN ADDITION TO IT BEING A BIG SELLING POINT, I JUST THINK IT'S GOOD FOR SOCIETY, IT'S GOOD FOR PEOPLE, IT'S GOOD FOR THE ENVIRONMENT. I STARTED WITH THAT 8 YEARS AGO WHEN I STARTED THIS BUSINESS, AND I'VE STUCK FIRM TO IT. EIGHT YEARS AGO IT WAS A LOT EASIER THAN IT IS NOW, EIGHT YEARS INTO THE FUTURE. MADE IN CANADA. MAKING THINGS IN CANADA HAS KIND OF -- IT'S BEEN ON THE DECLINE FOR A LONG TIME AND I HAVE ENTICED IT VERY SHARPLY. MANY OF THE FACTORIES WE DEAL WITH OVER THE PAST EIGHT YEARS HAVE HAD CONSTRAINTS, PROBLEMS, OR GONE OUT OF BUSINESS.
MANY HAVE GONE OUT OF BUSINESS. NOW, THE LOCKDOWNS HAVE ACCELERATED A PROCESS THAT WAS ALREADY HAPPENING, SO EVERYTHING -- EVERYTHING -- MANUFACTURING IS ALL MOVING TO SORT OF DEVELOPING ECONOMIES, WHICH IS FINE. LIKE, YOU KNOW, IT'S FINE. YOU CAN MAKE A GREAT JACKET IN CHINA. BUT IT IS KIND OF HOLLOWING OUT OUR OWN LOCAL ECONOMY. I'LL USE AN EXAMPLE OF ONE JACKET MAKER WE ORDERED FROM.
SO WE PREBOOKED EIGHT STYLES FROM A CANADIAN JACKET MAKER WHO MAKES THE MAJORITY OF THEIR PRODUCT IN CHINA BUT WE ALWAYS SELECT THE CANADIAN JACKETS. SO MID-SEASON, AS A RESULT OF THE LOCKDOWNS, THE PRODUCTION THAT WAS SLOTTED TO TAKE PLACE IN CANADA ACTUALLY MOVED TO CHINA MID-PRODUCTION, AND -- AND I DON'T SEE IT COMING BACK NEXT YEAR EITHER. LIKE I'VE JUST SEEN THE FORECASTS FOR NEXT YEAR.
THEY'RE NOT MAKING NEARLY AS MUCH IN CANADA, AND -- AND THAT'S BECAUSE CHINA DIDN'T HAVE TO GO INTO LOCKDOWN. IT DID, BUT IT WAS VERY QUICK AND NOW -- >> Steve: LET ME PICK UP ON THAT. >> OF COURSE. >> Steve: JOHN, I WANT TO PICK UP ON THAT ISSUE OF LOCKDOWN BECAUSE IN THE STATS WE GAVE OFF THE TOP, IT LOOKS LIKE BRITISH COLUMBIA HAS ALMOST, AND THIS IS UNDER AN NDP GOVERNMENT, THEY HAVE ALMOST TWICE AS MANY SMALL BUSINESSES FULLY OPEN RIGHT NOW, AS DOES THE PROVINCE OF ONTARIO.
SO LET ME GET YOUR JUDGMENT ON HOW FAIR YOU THINK IN ONTARIO THE CURRENT LOCKDOWN PROTOCOLS ARE RIGHT NOW. >> John Kiru: YEAH. YOU KNOW, IT'S DIFFICULT TO GO AGAINST PUBLIC HEALTH AND THOSE INTERESTS, SO PEOPLE ARE DYING OUT THERE AND WE'RE IN SUPPORT OF, YOU KNOW, WHAT NEEDS TO BE DONE NEEDS TO BE DONE. BUT WE'RE NOT UNDERSTANDING THE SCIENCE BEHIND SOME OF THE DECISIONS, WHICH LEADS TO ONLY 37% OF THE BUSINESSES BEING OPEN. WE TRULY BELIEVE THAT SMALL BUSINESS IS AS CAPABLE IF NOT MORE CAPABLE IN CONTROLLING THEIR OWN ENVIRONMENT AND DOING -- YOU KNOW, MODIFYING THE LOCKDOWN WHILE MAINTAINING PROTOCOLS AND APPOINTMENTS.
YOU KNOW, WE CAN TAKE ONE OR TWO PEOPLE INTO OUR STORES, MAKE SURE THAT THINGS ARE CLEANED, ET CETERA. SO THE LACK OF SCIENCE, LACK OF CLARITY ON HOW THESE DECISIONS WERE MADE IS ONLY COMPOUNDED BY THE FACT THAT AS, YOU KNOW, WE'RE HEARING MORE AND MORE CHARGES BEING LAID OUT INTO THE BIG PLACES THAT ARE OUT THERE. THE POWER CENTRES, ET CETERA.
SO CLEARLY THEY HAVEN'T GOT THE GRASP OF IT. SO IT'S THAT LACK OF UNDERSTANDING OF WHAT THE RATIONALE BEHIND THAT IS. NOBODY HAS EVER COME OUT AND SAID, "LOOK, YOU GUYS ARE MORE SUSCEPTIBLE TO THIS" OR PEOPLE GOING FROM STORE TO STORE MAY CAUSE THIS, ET CETERA.
WE HAVEN'T HEARD THAT SCIENCE. IT'S VERY DIFFICULT FOR A SMALL BUSINESS PERSON TO SEE SOMEBODY WALKING OUT OF A WAL-MART WITH A 90-INCH TV AND A BAG OF NON-ESSENTIAL GOODS AND TO JUSTIFY WHY THEY CAN'T AT LEAST SELL A SWEATER OR A TOY THAT IS READILY AVAILABLE IN THESE PLACES. SO THAT'S THE ONE QUESTION THAT I CONTINUE TO HEAR: WHY? I CAN DO BETTER.
I CAN CONTROL WHO COMES IN. WHERE IS THE SCIENCE? PLEASE EXPLAIN THE SCIENCE TO US, IS THE CONTINUOUS OUTCRY THAT I HEAR OUT THERE. >> Steve: YEAH, PROFESSOR REUBER, WE'VE HEARD NUMEROUS, AND I GUESS GIVING VOICE TO NUMEROUS COMPLAINTS ON THIS PROGRAM OVER THE LAST MANY MONTHS OF PEOPLE WHO DO NOT SEE THE LOGIC IN ALLOWING CONSUMERS TO ABSOLUTELY PACK WAL-MARTS AND BUY WHATEVER THEY WANT AT WAL-MART STORES WHILE ON THE OTHER HAND SHUTTING DOWN ALL SMALL BUSINESSES WHO REALLY CAN CONTROL THE FLOW OF PEOPLE INTO THEIR PLACES. YOU KNOW, BEFORE THE STATE OF EMERGENCY, YOU'D SEE PEOPLE LINED UP OUTDOORS AND JUST WAITING UNTIL THERE WERE FEWER PEOPLE INSIDE TO COME IN.
WHY DO YOU SUPPOSE THE GOVERNMENT IS TAKING THE POSITION IT IS, WHICH IS IT'S OKAY FOR THE BIG BOXES TO BE OPEN, BUT THE SMALL RETAILERS HAVE TO BE CLOSED. THIS IS, AFTER ALL, A PROGRESSIVE CONSERVATIVE GOVERNMENT. THE PREMIER IS HIMSELF A SMALL BUSINESS OPERATOR.
WHY DO YOU THINK THEY'VE GONE THIS WAY? >> Becky Reuber: I DON'T KNOW. I DON'T KNOW. BUT I DO THINK THAT THEY NEED TO EXPLAIN IT BECAUSE I THINK THAT A LOT OF PEOPLE ARE UPSET ABOUT IT, AND IT'S NOT JUST THE BUSINESS OWNERS, IT'S ALSO THEIR CUSTOMERS WHO WANT TO SEE THEM SUCCEED. SO THERE'S THAT ANOMALY. THERE'S THE ANOMALY OF THE BIG BOX STORES BEING OPEN AND THE SMALL RETAILERS ON MAIN STREET NOT BEING OPEN. IT'S ALSO THE BAKERY -- THE FLORIST NEXT TO THE BAKERY IS CLOSED WHEN THE BAKERY IS OPEN.
THEY'RE BOTH THE SAME SIZE. THEY BOTH PROBABLY HAVE SIMILAR VENTILATION SYSTEMS. THEY BOTH -- YOU KNOW, THERE'S JUST -- IT WOULD BE NICE TO HEAR SOME LOGIC BEHIND, YOU KNOW, WHY SOME OF THESE DECISIONS WERE MADE. >> Steve: LANGTON, HOW DO YOU THINK IT COULD BE MADE FAIRER? >> Langton Willms: OH, MY GOODNESS.
>> Steve: I MEAN, I ASK THE QUESTION BECAUSE I PRESUME AS A SMALL BUSINESS PERSON YOU THINK YOU COULD BE OPEN AND OPERATING SAFELY? >> YES, YES, 100 PERCENT. YOU KNOW WHAT WAS REALLY CRAZY WAS WHEN THEY DID THE FIRST LOCKDOWN AND THEY GAVE ME PAGES AND PAGES AND PAGES OF LEGALESE TO SIFT THROUGH AND FIGURE OUT WHAT I NEEDED TO DO WITH MY BUSINESS NOW TO AVOID FINES AND IMPRISONMENT AND SOME OF THE RULES JUST SEEMED -- THEY SEEMED DESIGNED BY SOMEONE WHO HAD ACTUALLY NEVER SET FOOT IN A SMALL BUSINESS. ONE OF THE THINGS THAT I FOUND -- THE CRAZIEST RULE OF ALL OF THEM WAS IT SAID, IT SAID, TAKE THE AMOUNT OF SQUARE METRES THAT YOU HAVE ON YOUR FLOOR SPACE AND DIVIDE THAT BY FOUR.
IN THEORY, THAT SHOULD ALLOW EVERYONE TO STAND 2 METRES APART. SO I DID THE CALCULATION AND I WAS JUST LIKE, WAIT, YOU MEAN I'M ALLOWED TO LET 16 PEOPLE INTO MY STORE? I'VE NEVER HAD 16 PEOPLE IN MY STORE. SO ALL SORTS OF -- YOU KNOW, I USUALLY HAVE PEOPLE IN ONE OR TWO AT A TIME.
AND ALL OF THESE SORT OF THINGS WERE JUST, REALLY, SO I NEED TO CLOSE BUT YOU'RE COMFORTABLE WITH A LARGER STORE OPERATING WITH PEOPLE SO LONG AS THEY'RE ABLE TO STAND? YOU KNOW, YOU CAN PUT A LOT OF PEOPLE IN A ROOM AND HAVE THEM STAND 2 METRES AWAY FROM EACH OTHER. >> Steve: I'M JUST -- I MEAN, THAT'S SOME GREAT MATH THERE. DO YOU KNOW WHO YOUR MEMBER OF THE LEGISLATURE IS AND HAVE YOU MADE CONTACT WITH THAT MPP TO TALK ABOUT THE ANOMALIES YOU'VE JUST POINTED OUT? >> NO, I WAS SLAMMED. HONESTLY, WHEN ALL OF THESE RULES CAME OUT, I SKIMMED THEM, DID MY BEST TO UNDERSTAND SOME OF THE THINGS. A LOT OF THE WORDING WAS CONTRADICTORY.
I COULDN'T TELL WHAT WERE LAWS AND WHAT WERE RECOMMENDATIONS. I CAN'T AFFORD A LAWYER TO GO THROUGH THIS STUFF FOR ME. IT WAS THE SAME WITH -- MAYBE I'M GOING OFF-TOPIC.
BUT IT WAS THE SAME WITH STIMULUS AS WELL. I DIDN'T GET ANY STIMULUS. MAYBE I QUALIFIED FOR SOME OF IT BUT IT WAS JUST LIKE, I COULDN'T UNDERSTAND. I DIDN'T HAVE TIME TO SIFT THROUGH ALL OF THIS PAPERWORK. >> Steve: WELL, SURELY YOU WOULD HAVE BEEN ELIGIBLE FOR A RENT SUBSIDY, AND IF YOU HAVE ANY EMPLOYEES, THEY WOULD HAVE BEEN ELIGIBLE FOR CERB.
>> NO, CRA I COULDN'T GET BECAUSE, LIKE I SAID, MY REVENUE DIDN'T DECLINE. MY REVENUE WAS UP BUT MY PROFITS ARE DOWN, AGAIN, BECAUSE WE'VE SWITCHED TO AN AMAZON MODEL INSTEAD OF A SMALL NEIGHBOURHOOD BUSINESS MODEL. SO ALL OF MY PROFIT IS GETTING EATEN UP BY FIN TECH CORPORATIONS AND DELIVERY SERVICES. YEAH.
SO I GOT CEBA, WHICH WAS NICE. BUT I HAVEN'T BEEN ABLE TO QUALIFY FOR THE ONTARIO GRANT. I DIDN'T QUALIFY FOR CECRA, I DIDN'T QUALIFY FOR CBERS BECAUSE THEY'RE RELATED TO REVENUE, NOT TO PROFIT, WHICH IS HARD TO PROVE. >> Steve: JOHN, DON'T MISUNDERSTAND THIS QUESTION. I'M NOT SUGGESTING A JANUARY 6TH STORMING OF QUEEN'S PARK APROPOS OF CAPITOL HILL IN THE UNITED STATES, BUT I DO WONDER AT SOME POINT IF YOU HAVE HAD IT PASS THROUGH YOUR MIND YOU NEED TO TAKE SMALL BUSINESS OWNERS DOWN TO THE LAWNS OF THE LEGISLATURE AND MAKE A FUSS. WHAT ABOUT IT? >> John Kiru: WELL, YOU KNOW, WE DID THAT AROUND TAXES IN 1998 WHEN CURRENT VALUE ASSESSMENT CAME IN AND BUSINESSES IN SMALL COMMUNITIES IN TORONTO WERE FACING 700% TAX INCREASES.
THIS ONE -- THIS ONE IS A LITTLE MORE DIFFICULT THAN THAT. LOOK, DOING A PROTEST OUT THERE, IT JUST BECOMES CLEAR THAT -- FIRST OF ALL, YOU MIGHT JUST GET CHARGED BECAUSE YOU'RE GETTING MORE THAN FIVE PEOPLE TOGETHER OUT THERE AND WE CAN'T AFFORD TO PAY OUT ANY MORE THAN WE ALREADY HAVE BEEN, BUT THERE HAS BEEN TALK, STEVE. I'D BE LYING TO YOU IF I DIDN'T TELL YOU THAT SOME BUSINESSES SIMPLY CIRCUMVENTING WHAT'S OUT THERE RIGHT NOW BECAUSE CUSTOMER SALES, COME ON DOWN AT 6:00 OR 7:00 AT NIGHT, THEY WELCOME THEM INTO THE STORE.
PEOPLE ARE FED UP. THEIR LIVELIHOODS, THEIR LIFE INVESTMENTS, THEIR FAMILIES ARE AT STAKE HERE, AND THEY WILL DO WHAT IT TAKES, WHETHER IT'S A MARCH ON QUEEN'S PARK OR ELSEWHERE, IT'S NOT IN THE CARDS RIGHT AT THE MOMENT, THAT'S FOR SURE. ALL WE'RE TRYING TO DO IS THROUGH OPPORTUNITIES LIKE THIS TO HAVE OUR VOICE HEARD OUT THERE, AND TO JUSTIFY TO US WHY THE BIGGEST EMPLOYERS IN THIS COUNTRY, SMALL BUSINESS EMPLOYS OVER 90% OF PEOPLE OUT THERE, WHY WE WOULD BE THE ONES THAT WOULD BE SHUT DOWN.
FOR EVERY DOLLAR SPENT ON MAIN STREET, 67 CENTS OF THAT STAYS LOCAL. YOU KNOW? THAT'S CERTAINLY NOT THE CASE FROM THE BIG POWER CENTRES WHERE UP TO AND OVER 43 CENTS ON EVERY DOLLAR SPENT IN WAL-MART ENDS UP IN ARKANSAS. SO IF WE'RE TALKING ABOUT BUILDING THE ONTARIO ECONOMY AND SUPPORTING CANADIAN AND DOING ALL THAT SORT OF STUFF, WE'VE GOT TO, YOU KNOW, NOT TALK THE TALK BUT ALSO WALK THE WALK, AND CERTAINLY NOT ALLOWING PEOPLE TO WALK INTO A SMALL BUSINESS IS TO HAVE AN IMPACT ON THOSE AND THOSE NUMBERS WILL SHOW. WE WILL CONTINUE TO LOSE SMALL BUSINESSES. AND WITH THAT OUR COMMUNITIES.
BECAUSE IT'S A KNOWN FACT HOW MAIN STREET GOES, HOW OUR COMMERCIAL STREETS GO, SO GOES THE REST OF THE NEIGHBOURHOOD. AND THAT SPILLOVER IS HAPPENING OUT THERE, YOU KNOW? RONCESVALLES SHOWS WHAT IT COULD LOOK LIKE WITH THE BOARDED-UP WINDOWS AND PUSHING THIS SORT OF THING OUT THERE. RIGHT NOW IT LOOKS LIKE THE NUMBERS ARE GOING DOWN. WE'D LOVE SOME PREDICTABILITY OF WHAT WE CAN LOOK FORWARD TO IN TERMS OF, IF WE HAVE LESS THAN A THOUSAND CASES IN ONTARIO FOR FIVE CONSECUTIVE DAYS, THAT THERE MIGHT BE A MODIFICATION, ET CETERA. WE'RE JUST SIMPLY SITTING HERE AND NOT ABLE TO FULFIL WHAT MANY ENTREPRENEURS HAVE INVESTED THEIR LIFE SAVINGS INTO.
AND WITHOUT PREDICTABILITY, WITHOUT UNDERSTANDING AND THE RATIONALE, YEAH, MAYBE THAT MARCH MIGHT HAPPEN. >> Steve: WELL, BECKY REUBER, MAYBE YOU COULD HELP US UNDERSTAND, BUILDING ON WHAT JOHN JUST SAID, IF HALF THE RESTAURANTS IN, LET'S SAY, MAIN STREET ONTARIO GO UNDER, IF ONE OUT OF EVERY THREE RETAILERS IS NOT GOING TO BE HERE BY THE END OF THE YEAR, CAN YOU PAINT US A PICTURE OF WHAT YOU IMAGINE THIS PROVINCE AND THE MAIN STREETS OF THIS PROVINCE ARE GOING TO LOOK LIKE BY THE TIME THIS IS ALL SAID AND DONE? >> Becky Reuber: WELL, I THINK IT'S GOING TO BE VERY DIFFERENT. PEOPLE SAY IT NOW, I THINK IT WILL BE TRAGIC AND PEOPLE WILL HESITATE TO -- MAY HESITATE TO START A BUSINESS. I THINK -- WHEN YOU LOOK AT THOSE NUMBERS, WE LOOK AT THE ONES THAT ARE STILL IN BUSINESS AND WE SORT OF FEEL SORRY FOR THE TWO-THIRDS THAT AREN'T, WHICH IS FAIR, BUT AS LANGTON HAS SAID, THE ONE-THIRD THAT ARE STILL IN BUSINESS REALLY AREN'T DOING THAT WELL.
THERE'S FINANCIAL ISSUES, THERE'S JUST THE WORKLOAD OF RUNNING THE BUSINESS, OF PIVOTING AND TRYING TO FIGURE OUT WHAT TO DO, AND I THINK, YOU KNOW, JOHN TALKED ABOUT PREDICTABILITY AND THAT'S JUST NOT GOING TO COME. I WAS TALKING TO SOMEONE WHEN I WAS SHOPPING BEFORE CHRISTMAS, AND SHE HAD TO PUT HER CHRISTMAS ORDER IN LAST MARCH, WHEN WE JUST GOT INTO OUR FIRST LOCKDOWN. SO YOU CAN IMAGINE THE UNCERTAINTY OF HER KNOWING WHAT PEOPLE WOULD BE BUYING IN HER STORE NINE MONTHS LATER DURING A PANDEMIC.
BUSINESS OWNERS ARE MAKING DECISIONS NOW, INVESTMENT DECISIONS, MERCHANDISING DECISIONS FOR THINGS THAT WILL HAPPEN NINE MONTHS FROM NOW, AND NOBODY CAN TELL THEM WHAT THE ENVIRONMENT IS GOING TO LOOK LIKE. AND SO IT'S JUST A VERY DIFFICULT SITUATION FOR THEM AND I THINK, YOU KNOW, I DON'T THINK THERE WILL BE PREDICTABILITY IN THE SHORT TERM ANYWAY. >> Steve: BECKY, AS YOU ANALYZE WHAT'S GOING ON RIGHT NOW, CAN YOU THINK OF A MORE EXISTENTIAL THREAT TO BUSINESS GENERALLY SPEAKING, SMALL BUSINESS IN PARTICULAR, I DON'T KNOW, IN THE LAST HUNDRED YEARS? DO YOU HAVE TO GO BACK TO THE GREAT DEPRESSION TO FIND ANYTHING THIS EXISTENTIAL TO THEIR SURVIVAL? >> NOTHING IN MY CAREER FOR SURE.
I MEAN, THERE WAS THE DOT-COM BOOM AND THE DOT-COM BUST, BUT THAT WAS JUST ONE SECTOR AND IT RECOVERED. BUT REALLY NOTHING LIKE THIS. >> Steve: HMM. LANGTON, WHAT DO WE NEED TO SEE TO GIVE YOU GUYS A SHOT? >> Langton Willms: I MEAN, I'D JUST LIKE TO KNOW WHEN THE LOCKDOWN IS GOING TO BE OVER.
I DON'T KNOW IF IT'S A SELFISH ASK, BUT MAYBE SOME STIMULUS PROGRAMS THAT ARE LINKED TO A LOSS OF PROFIT RATHER THAN A LOSS OF REVENUE. AND I THINK A LOT OF THE THINGS THAT WE NEED TO SEE THE FUTURE OF SMALL BUSINESS SUCCESS. IT ALREADY EXISTS.
THE OUTPOURING OF SUPPORT THAT I GOT FROM THE COMMUNITY DURING THE FIRST LOCKDOWN WAS -- IT WAS AN EMOTIONAL EXPERIENCE. LIKE, I HAD PEOPLE -- I NEVER ONCE PROMPTED PEOPLE TO DO THIS OR ASKED FOR IT BY EMAIL OR SOCIAL OR ANYTHING LIKE THAT, BUT PEOPLE WERE JUST POURING IN, BUYING GIFT CARDS. THEY DIDN'T WANT ANYTHING NOW BUT THEY WANTED TO MAKE SURE THAT MY CASH FLOW WAS PROTECTED SO THEY COULD BUY THINGS NEXT YEAR, WHICH THEY KNEW THEY WOULD. >> Steve: THAT'S WONDERFUL. YOU DON'T HAVE TO ANSWER THIS QUESTION BUT I'M GOING TO ASK IT ANYWAY.
WE HEARD JOHN SAY EARLIER THAT SOME RETAILERS ARE JUST WINK-WINK, NUDGE-NUDGE, COME DOWN AT 8:00 AT NIGHT I'LL OPEN UP THE STORE AND YOU CAN GET SOMETHING. HAVE YOU HAD TO DO THAT? >> NO COMMENT. [LAUGHTER] >> Steve: A WORD TO THE WISE IS SUFFICIENT. I GOT IT.
>> YEAH. >> Steve: JOHN, IN YOUR JUDGMENT, WHAT'S IT GOING TO TAKE TO GET THIS SECTOR BACK ON ITS FEET? >> John Kiru: ENTREPRENEURS ARE CREATIVE, ENERGETIC INDIVIDUALS, AND WE WILL BOUNCE BACK FROM THIS. MAIN STREET MIGHT NOT BE THE WAY YOU'LL REMEMBER IT.
THERE WILL DEFINITELY BE SHIFTS. I THINK THAT CRISIS SPENDING IS OVER. YOU KNOW, CONTINUE THE PROGRAMS TILL WE'RE OUT OF IT. BUT I SURE AS HECK HOPE THAT THE GOVERNMENTS HAVE KEPT SOME POWDER DRY FOR THE RECOVERY SPENDING THAT'S GOING TO BE NEEDED TO SAVE OUR SMALL BUSINESSES THAT ARE IN BUSINESS, TO ASSIST THOSE THAT ARE GOING TO COME INTO BUSINESS IN THIS ENVIRONMENT, AND TO HELP REBUILD THE COMMUNITIES BECAUSE WE'RE AN ECOSYSTEM.
YOU KNOW, TORONTO MIGHT BE A LARGE BUT IT'S MADE UP OF NEIGHBOURHOODS AND COMMUNITIES THAT ARE SERVED BY THEIR SMALL BUSINESSES. SO THERE NEEDS TO BE A FOCUS ON RECOVERY SPENDING. HOW CAN WE STIMULATE SMALL BUSINESSES TO REINVEST, TO BUY LOCAL, TO ESSENTIALLY ORDER GOODS TO BE READY FOR THAT OPENING. AS I'VE SAID, CRISIS SPENDING IS OVER. WE DON'T WANT TO SEE IT FINISH BUT CONTINUE CERTAINLY TO THE POINT WHERE WE START OPENING UP AND PEOPLE -- TO GIVE THEM THAT FOUNDATION BUT REALLY IT IS RECOVERY FUNDING AND WHAT ARE WE GOING TO DO TO HELP THESE PEOPLE RECOVER? >> Steve: BECKY, I HAVE A MINUTE TO GO HERE AND I NEED TO ASK YOU ABOUT THIS.
JUST THE OTHER DAY THE CANADIAN CENTRE FOR POLICY ALTERNATIVES BROUGHT OUT QUITE AN EXHAUSTIVE STUDY IN WHICH THEY SAID PROVINCES ACROSS THIS COUNTRY ARE LITERALLY SITTING UPON BILLIONS UPON BILLIONS OF DOLLARS IN THEIR BANK ACCOUNTS. I DON'T KNOW WHAT THEY'RE WAITING FOR. THEY'RE WAITING FOR SOMETHING TO SPEND IT ON. WHAT DO YOU THINK OF THE FACT THAT MONEY IS SITTING THERE WHILE SMALL BUSINESS IS SUFFERING SO BADLY? >> Becky Reuber: I'M NOT GOING TO WADE INTO -- I DON'T KNOW ABOUT THAT NUMBER, SORRY, I JUST -- IT SEEMS A SHAME. IT SEEMS THAT THERE IS SOMETHING THEY COULD DO. I THINK IN DEFENCE OF THE POLICYMAKERS, THEY'RE FIGHTING A LOT OF FIRES RIGHT NOW ON A LOT OF DIFFERENT FRONTS.
THAT CERTAINLY MAKES SENSE BUT I GUESS TO WEIGH IN ON IT, I'D HAVE TO KNOW A LITTLE BIT MORE. SORRY. >> Steve: THAT'S ACTUALLY ALLOWED. WE ALLOW PEOPLE ON THIS PROGRAM TO SAY, IF THEY DON'T KNOW. I LIKE THAT.
THAT'S BECKY REUBER AT THE ROTMAN SCHOOL OF MANAGEMENT AT THE UNIVERSITY OF TORONTO, JOHN KIRU WHO IS WITH THE TORONTO ASSOCIATION OF BUSINESS IMPROVEMENT AREAS, LANGTON WILLMS, GERHARD, IF YOU'RE IN THE WEST END OF TORONTO AT THE JUNCTION, KNOCK ON HIS DOOR AT 8:00 AT NIGHT, HE MIGHT LET YOU IN AND BUY A JACKET. I DIDN'T SAY THAT, LANGTON. THANKS TO THE THREE OF YOU FOR COMING ONTO TVO TONIGHT. WE REALLY APPRECIATE HEARING YOUR VIEWS. >> THANKS.
2021-02-01 10:43
