This month’s BEC Executive Interview is with Dan Kelly. Kelly is the President, CEO, and Chair of the Board of Governors of the Canadian Federation of Independent Business (CFIB), and the lead spokesperson and advocate for the views of the Federation’s 95,000 small and medium-sized member businesses.
Following the onset of the pandemic, Canada experienced a drastic drop in its real gross domestic product (GDP), with the economy contracting 18.2% between March and April 2020. We spoke to Kelly about the role of independent businesses to the Canadian economy, and how the CFIB has supported Canadian independent businesses for 50 years.
Q: Please give an overview of Independent Businesses in Canada. What do they contribute to the country’s economy? How many Canadians are employed by independent businesses?
A: Canada is a nation of small, independent businesses. There are over 1.1 million small firms with paid staff and if you include the self-employed, there are over 3 million Canadians who work for themselves. Many Canadians don’t realize that half of the country’s GDP and 60 per cent of private sector employment is created by small businesses.
Q: What impact has the COVID 19 Pandemic had on Canada’s Independent Businesses?
A: The pandemic has had a massive impact on Canada’s small business community. This is especially true in certain sectors that typically deliver services face-to-face with their customers, such as retail, hospitality, personal services and arts and recreation. Lockdowns and other COVID-related restrictions caused many businesses to be entirely closed for months on end. Several businesses, like gyms, bowling alleys, and indoor restaurant dining were closed in the City of Toronto for over 400 days. Ontario holds the record for the world’s longest lockdowns. The impact of these restrictions has left many businesses hanging on by a thread. The average small business across Canada has been left with $160,000 in new COVID-related debt. CFIB is projecting that 180,000 businesses will permanently close as a result of the pandemic.
Q: How was CFIB able to offer support during the last 18 months?
A: I’m immensely proud of what the CFIB team was able to do to support Canada’s small businesses through the pandemic. Even though my association is nearly entirely funded by membership fees from small business owners, we made an early decision to provide our full services to all Canadian small businesses, regardless of whether or not they could afford to pay our annual fee. We’ve served thousands of small businesses who have never been paying members as well.
We helped in several important ways. One, CFIB surveyed our members regularly throughout the pandemic and used this data to push governments to create or improve several of the key small business support programs. I can report that the wage subsidy, rent subsidy, CEBA loan program, and provincial small business grant programs would either not have existed or not functioned nearly as well had CFIB not conducted detailed surveys and lobbied the heck out of politicians.
Two, we took over 100,000 calls directly from small business owners to provide one-on-one counselling and support since COVID began. Many of these calls were for help in accessing one or more of the key government support programs as there were so many rules to consider. Other calls were related to the need for a reopening plan or for HR support in dealing with staffing issues, like layoffs or rehiring.
Three, CFIB did thousands and thousands of media interviews to ensure the public understood the impact of the pandemic on small businesses. We’ve used this platform to reinforce the need for consumers to support small business, such as our #SmallBusinessEveryDay campaign. As many Canadians used big box stores and online giants during the lockdown phase, it will be critical to get the public reunited with the smaller independents they love.
Q: What will the CFIB continue to do going forward to alleviate some of the negative impacts?
A: Our pandemic related work is far from over. As I mentioned earlier, the average small business had inherited $160,000 in fresh COVID debt and we are calling on Ottawa and the provinces to help remove some of this burden. And as only 35% of our members report they are back to normal levels of revenues, we are also calling on Ottawa to postpone the phasing out of the rent and wage subsidies. These are to end in September but CFIB believes it is just way too soon to end these programs until subsidies can be replaced by sales. We will be using the pressure of the upcoming federal election to get all parties to commit to ways to support small businesses in the months ahead.
Q: This is the CFIB’s 50th anniversary. What does this milestone mean to you?
A: Our 50th is a big deal. Before our founder John Bulloch created CFIB, most policies were decided by big government, big business and big labour unions. Today, small business owners have a seat at the table. While small firms continue to face high taxes and many unfair rules and regulations, there are thousands of policies that have been changed for the better. As an example, just a few weeks ago, CFIB won a major long-term battle for tax fairness for business owners who wish to sell their business to their children. We are thrilled to report that Bill C-208 was passed and proclaimed into law, reversing a terrible policy that made it less expensive to sell your business to a stranger than to your kids. We have worked with the Liberals, NDP and Tories on three separate private member’s bills over the years and I’m pleased to report that the third time was a charm. It is a good example of the power of our informal motto: “we never give up and we never go away”.
Q: What are the long and short-term goals of the CFIB right now? What are your objectives as President?
A: In the short-term, we will be working to get our members through the difficult months ahead as they and the economy begin to recover from COVID. We will also be working hard to highlight many key small business issues in the expected Federal election campaign. Longer term, we have many policies we want to improve, including making Employment Insurance less expensive for small business owners, reducing credit card processing fees – particularly for e-commerce transactions and addressing the growing shortage of qualified labour.
Q: COVID aside, what is the biggest advocacy challenge for the CFIB?
A: Our biggest challenge continues to be our work in protecting the victories we’ve worked hard to achieve. Back in 2017, the new Federal government proposes sweeping changes to small business policies that would have wiped out many of the major benefits that balance out the incredible risks entrepreneurs take on every day. Many civil servants profoundly misunderstand small businesses and think of them as little big businesses. They convinced the previous Finance Minister that small business owners were a bunch of tax cheats and we had to take on a massive year long battle to push back against the government’s proposed changes. We were mostly successful, but it reminded me that we need to be vigilant to protect the ground we’ve gained over the past 50 years.
Q: Do you have an anecdote that illustrates the good work the CFIB has done this year?
A: I can’t tell you how many veteran entrepreneurs have called us this year in tears, reporting that their businesses were crumbling before their eyes as a result of COVID restrictions. In about 10 cases, these calls actually turned into suicide prevention calls, something our team was just not adequately prepared for. When I think about some of the messages that have been most powerful in responding to panicked entrepreneurs, they’ve been to tell them that they are not alone and that they’ve done nothing wrong. Many otherwise successful business owners feel like they have failed when their business began to really struggle during lockdowns. They felt somehow that they had let their employees or their family members down. In reminding them that they are not alone and that no one was adequately prepared for the pandemic, it seemed to really help. The other message I continue to give to business owners is to say thank you. I thank them for their perseverance in the face of this incredible once in a 100-year challenge. I thank them for everything they’ve done to protect or create jobs, to give back to their communities and to make Canada a better place. I think all Canadians should thank the local business owners who add so much to the fabric of our country.