Small businesses in Yellowknife might soon receive the help they need with fixed costs to last through the Covid-19 pandemic.

The Canadian Northern Economic Development Agency (CanNor) on Monday announced that the $15 million it received from the federal government for Northern assistance during Covid would go into the (NBRF).

The fund aims to provide small and medium-sized enterprises (SMEs) with financial help on fixed expenditures like rent, mortgage, utilities and insurance.

The $15 million is divided across the three territories and about $5 million will be accessible for NWT businesses, said Cheryl Keats, regional director of operations with CanNor NWT. 

The program is targeted at businesses that have been operating at a loss since the pandemic and that expect to continue being in the red, and that employ fewer than 20 employees, though CanNor might consider applications from businesses employing up to 50 people. Companies can qualify for funding under two scenarios.

In the first, the business has hit bottom and has no revenue coming in but still has to pay rent and other expenditures, with its debts piling up. The NBRF would pay 100 per cent of those costs, retroactive to April 1, for up to four months.

"(The point) is so that they're not re-opening with a whole bunch of debts related to costs," said Keats.

In the second scenario, the business has some incoming revenue despite Covid-related losses but is collecting deficits because it can't cover all of its fixed costs. The fund would help cover the deficit up to 100 per cent, depending on the specifics of costs and revenue streams.

"(Let's say) you have $2,000 in fixed expenditures, but are making $1,000 in revenue, then we'd cover 100 per cent of that so that you're making something." 

Coverage ranges from $2,500 up to $100,000.

Reaction from businesses

Rami Kassem, owner of Javaroma cafe, said the fund is one of the best options he has heard of to help out businesses during the economic downturn.

His cafe has lost about 90 per cent of its revenue since customer numbers dwindled in March, he said in an interview.

Kassem's reaction to the federal government's Canada Emergency Wage Subsidy (CEWS) has been lukewarm, because although he appreciates that the government is trying to help, he has lost so much business that he would struggle to afford paying his staff the 25 per cent that businesses must cover under the program.

RELATED REPORTING: Mixed responses from YK businesses to federal wage subsidy scheme

The NBRF gives him some breathing space and his cafe would qualify under the fund's second scenario.

"This way weSA国际影视传媒檒l get grants and weSA国际影视传媒檒l be able to pay our expenses and rent. So we can survive until things go back to normal. ItSA国际影视传媒檚 great news," he said. 

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But the fund doesn't cover salaries and wages, so Kassem isn't in a position to hire back the 10 workers he laid off, out of his total staff of 15. Even if he could rehire them, there are too few sales.

"If I bring everyone back the government would have to pay them to do nothing because there's hardly any business or customers. Everybody is looking for more than the 75 per cent subsidy. The grant paying our fixed expenses is good for sure.

"I really appreciate what the GNWT and federal government is doing for us. When I call my family back in Lebanon, the government doesn't give them support and my family can't leave their homes because of self-isolation. We are fortunate. We are here." 

Down in Old Town, Bullock's Bistro has laid off its entire staff of 13 people and is bringing in no revenue. But owner Jo-ann Martin is relieved about the NBRF.

"It's fantastic. I think itSA国际影视传媒檒l be a huge help," she said

"It depends on how much people need access to it but itSA国际影视传媒檚 definitely something that the Yellowknife Chamber of Commerce has requested. And it's good that it's not a loan but a grant because when we get started again itSA国际影视传媒檒l be a slow hill up and people won't have money to pay back loans.

"The beauty of being it the North and in Yellowknife in particular is we have huge support systems like CanNor and the Department of Industry, Tourism and Investment and our banks. Between yesterday and today, I think I received six notifications from people and groups saying that this funding was available. It makes me feel great because I know everyone is trying to help everyone else out." 

The NBRF is also interest-free, Martin said, unlike other assistance programs for small businesses such as the loans offered through the NWT Business Development and Investment Corporation that come with interest rates of 1.75 per cent.

Martin is unsure that the fund, even in combination with CEWS would allow her to resume business at this point. She hasn't taken the route of some local eateries that have managed to keep going to some degree by offering take out and online ordering, as she prefers to focus on freshly made, on-site meals.

But CanNor's fund will at least help her pay her rent and utilities until she can open her doors again.

"It depends on how long this continues. WeSA国际影视传媒檒l re-evaluate at the end of April," she said. 

Chamber questions capacity

The NBRF's coverage of fixed costs addresses one of the chief concerns that the Yellowknife Chamber of Commerce has had with Covid-related assistance programs, namely that there should be rent relief, said Chamber president Tim Syer.

He's also impressed that the CanNor program targets SMEs, which he said numerically represent most businesses in the NWT.

But Syer wonders if the $15 million will be enough for the three territories.

"It will dry up pretty quickly," he said.

"(Applications) are on a first-come first-serve basis. It'll be interesting to see if that distribution model favours one territory or one business sector over another. I'm not sure how businesses are going to be able to react to this and take it up. We have varying levels of capacity across the three territories. Will there be more (funding)? We don't have an answer to that yet."