The Northern Business Relief Fund (NBRF) offering help with fixed costs is welcomed by many Yellowknife business owners affected by Covid-19 pandemic disruptions, but some small, home-based business owners feel the fund leaves them out in the cold.
The $15 million-fund was announced by the Canadian Northern Economic Development Agency (CanNor) on April 20 and is targeted at small and medium-sized businesses in the three territories.
RELATED REPORTING: Yk businesses relieved at CanNor fixed costs assistance offer
Though home-based businesses are eligible for the fund, some business costs are deemed ineligible, according to the . Those costs includes rent or mortgage for home-based businesses and SA国际影视传媒渙ther home-based business costs where the costs are not 100 per cent attributable to the business.
Blair McBride/NNSL photo
SA国际影视传媒淔or example, while a home-based business can request reimbursement for business insurance, it cannot request reimbursement of 20 per cent of its electricity bill on the basis that the business occupies 20 per cent of the floor space of the primary residence.SA国际影视传媒�
For Cathy Allooloo, owner of her home-based company Narwhal Northern Adventures in Yellowknife, the rules are confusing and sheSA国际影视传媒檚 unsure she will qualify.
photo courtesy of Narwhal Northern Adventures
Under normal Canada Revenue Agency (CRA) taxation procedures, owners of home-based businesses can claim SA国际影视传媒渂usiness-use-of-home-expensesSA国际影视传媒� and can SA国际影视传媒渁pportion utility costs based on the square footage of their home,SA国际影视传媒� she explained.
SA国际影视传媒淚f a business uses 20 per cent of a personal residence to conduct the business, the home owner can claim 20 per cent of utilities, property tax, mortgage interest etc as legitimate offsetting expenses.SA国际影视传媒�
SA国际影视传媒淚f Revenue Canada recognizes these as legitimate expenses, why not the NBRF, which is a federal program? To date, the reason given is it is too difficult to track, but I do not buy this. Why not just require the same documentation that Revenue Canada requires? Why is it good enough for one arm of the federal government and not another, especially in this time of crisis when many small businesses are at risk of closing?SA国际影视传媒�
Margaret Peterson, owner of My Backyard Tours, feels the NBRF doesnSA国际影视传媒檛 work for her if she canSA国际影视传媒檛 claim her rent as a home-based business.
SA国际影视传媒淚t decreases our eligibility. There are so many home-based businesses in town and there are the AirBnBs and B&Bs and lots of little tour companies like ours,SA国际影视传媒� she said.
Raemee Kwong, owner of Aurora Dream Tours, said she would like get some assistance for her home-based tour company but she doesnSA国际影视传媒檛 believe it qualifies, so she wonSA国际影视传媒檛 apply for the NBRF.
SA国际影视传媒淚 was thinking of talking to the MLA or somebody to maybe get a tax reduction or something,SA国际影视传媒� she said.
In response to concerns about rent ineligibility for home-based businesses under the NBRF, CanNor said the fund was designed to complement other federal, territorial and municipal initiatives aimed at helping businesses affected by the pandemic.
SA国际影视传媒淥n the issue of business-use-of-home expenses, CRA treats a percentage of these as a deduction from business income,SA国际影视传媒� said CanNor spokesperson Rebecca Grace. SA国际影视传媒淔or reasons of expediency in implementing payments for the NBRF, the decision was made to exclude this type of expense from eligibility under the NBRF. The eligible costs under NBRF focus on fixed business costs.SA国际影视传媒�
Though Allooloo has applied to the NBRF for assistance, she said she has also raised concerns about the program indirectly through her MLA, Rylund Johnson, and with the NWT Tourism Association.
"I think it would be more fair to level the playing field and treat home-based businesses the same as any other business when it comes to claimable expenses," she said.
