HomeMy WebLinkAboutDSD-21-020 - Continued Supports for Businesses Impacted by Provincial RestrictionsREPORT TO:Community andInfrastructureServices Committee
DATE OF MEETING:February 8, 2021
SUBMITTED BY:Cory Bluhm, Executive Director, Economic Development,
519-741-2200 ext. 7065
PREPARED BY:Cory Bluhm, Executive Director, Economic Development,
519-741-2200 ext. 7065
Saleh Saleh, Director of Revenue, 519-741-2200 ext. 7346
Rosa Bustamante, Director of Planning, 519-741-2200ext.7319
WARD(S) INVOLVED:All
DATE OF REPORT:January 28, 2021
REPORT NO.:DSD-21-020
SUBJECT:Continued Supports for Businesses Impacted by Provincial
Restrictions
RECOMMENDATION:
1) That, as part of the City’s ongoing effortsto support businesses impacted by
Provincial restrictions due to the COVID-19 pandemic, the City undertake the
following:
a)Continue to provide necessary resource supports in theWaterloo Region Small
Business Centreto continue to provide needed services where Provincial
funding is unavailable;
b)Utilize allrelevant andapplicable City of Kitchener communicationchannels to
ensure local businesses are aware of all funding supports, including Federal
and Provincial programs;
c)Continue to provide support to the KW Chamber of Commerce, Business
Improvement Areas and Waterloo Region Tourism Marketing Corporationfor
their recovery initiatives, such as the Live: Ask an Expert webinar series;
d)Extend the waiving offees forportable signs until June 30, 2021, authorizing
staff to further extend the waiving of these fees until the end of the pandemic
if deemed necessary;
e)Extending 2021 Business Licensing due dates and deferring late feesuntil
June 30, 2021;
f)Continue to provide free parking in Downtown surface parking lots after 5pm
and on weekends until June 30, 2021, authorizing staff to further extend said
free parking until the end of the pandemic if deemed necessary;
g)Ensure an expeditious patio approval program remains in place in advance of
warmer weather, including the waiving of municipal patio fees;and,
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h)Continue to support tenants of City of Kitchener facilities, such as the
Kitchener Market, with accessing applicable Federal and Provincial support
programs, such as rent relief subsidies.
2. That City staff continue with a phased and agile approach to industry consultation
and business recovery as outlined in Report DSD-21-020.
REPORT HIGHLIGHTS:
The purpose of this report is to provide an overview of the City’s proposed approach to
Business Recovery, including immediate supports for consideration.
The key findingsof this report arethat many local businesses continue to be impacted
by the pandemiconly further perpetuated by the recent Provincial orders. Unlike the
initial lockdown, a significant and diverse array of funding programs are currently
available to support businesses. The City can play an effective role by complimenting
and leveragingthese relief programs with focused initiatives and by ensuring efficient
municipal services.
Community engagement (in particular local businesses and business associations) has
been ongoing throughout the pandemic. Full business recovery will take months and
even years for certain industries, depending on the degree of impact. This report
identifies a framework for a phased approach to ongoing industry consultation and
anticipated timing of future recommendations (additional business recovery efforts) for
Council to consider.
The financial impacts are as follows - including economic supports previously approved
by Council, the City will be providing an estimated total of $2.3million in unbudgeted
economic and financial supports to residents and businesses in the community. The
report recommendation includes consideration for the City to waive various fees and
charges.Future recovery efforts can be supported by the Make It Kitchener 2.0
Reserve.
This report supports a vibrant economy.
BACKGROUND:
Since the beginning of the pandemic, the City has provided a broad range of services and
supports to assist local businesses in responding to the challenges of the pandemic.
Initially, financial supports (such as the deferral of tax payments) were intended to give
businesses grace periods as the Federal and Provincial governments developed direct
financial support programs. Today, more than a dozen programs exist, most notably:
Employment Insurance Programs for displaced workers, such as the Canadian
Emergency Response Benefit (CERP) program;
Ontario Small Business Support Grant – grants of up to $20,000 to support
businesses impacted by the second shutdown;
Ontario Property Tax and Energy Bill Rebates – grants to cover taxes and energy
costs during periods of ‘Control’, ‘Lockdown’ or ‘Provincewide Shutdown’;
Recovery of costs for personal protective equipment (PPE) through one-time
grants of up to $1,000;
COVID-19 Energy Assistance Program for Small Business and charitable
organizations, providing up to$1,500 towards utility bills;
Business Education Tax Reduction – rates were decreased from 1.25% to 0.88%;
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Canada Emergency Wage Subsidy – a subsidy of 75% of employee wages to
prevent job loss;
Highly Affected Sectors Credit Availability Program, providing loans to businesses
of up to $1 million;
Canada Emergency Business Account – credit for small businesses to pay for
immediate operating costs; and,
Canada Emergency Rent Subsidy – rent and mortgage supports to impacted
businesses.
It is clear that theFederal and Provincial governments have the financial capacity to
provide substantial supports to businesses. Municipalities simply do not have the financial
means to provide supports at a scale that will make or break a company’s ability to remain
in business. Rather, the City can play an effective support role ensuring businesses are
aware of available funding and are supported in accessing theseprograms. Likewise, the
City can leverage these programs by continuingto compliment funding programs with
agile and effective services/programs that allow local businesses to respond to the various
stages of the pandemic.
Similarly, local partners, such as the Waterloo Region Small Business Centre, KW
Chamber of Commerce, Communitech, Waterloo Region Tourism Marketing Corporation
and BIAs are providing a series of support programs (training, grants, etc.) to local
businesses. The City can continue to play an important role in supporting local partners.
As part of the approval of Make It Kitchener 2.0, City Council earmarked up to $5 million to
support wide-spread business recovery. Given the extensive Federal and Provincial
programs available, this funding will be most effectively utilized to offer supports where gaps
exist and where localized opportunities exist.
For municipal supports provided during the pandemic, refer to reports DSD-20-064 and
DSD-20-067.
REPORT:
Many businesses have been significantly impacted by the physical distancing and
shutdown measures needed to combat the spread of COVID-19. The industries impacted
the most include non-essential service most reliant on in-person transaction, such as
entertainmentand tourism-based businesses (restaurant, retail, accommodation),
personal services and commercial landlords. For these businesses, there are at least 3
predominant phases of business recovery:
1- Immediate & Direct Supports during Restricted Phases
During this phase (Control,Lockdown & Shutdown), businesses are significantly restricted
from accessing their customers. They require direct financial support to cover immediate
expenses, payroll, rent, taxes, etc. The majority of Federal and Provincial programs are
established to support companies in weatheringthe impacts of revenue loss. During this
phase, there is limited financial supports the City can provide. In Spring 2020, the City
provided a series ofpropertytax and rent deferrals.Additionally, the City provided interest
and penalty charge waivers on utility, property tax and miscellaneous bills for up to 90
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days. Although this was effective during the initial phases of the economic relief supports
provided by the City,with existing relief programs now in place by the Federal and
Provincialgovernments, it is not expected that similar measures are needed at this time.
2- Adaptation Supports during Less-Restrictive Phases
During this phase (Prevent, Protect, Restrict), businesses can operate in a more normal
manner, but are often limited in the capacity of customers they can accommodate and are
required to implement physical distancing measures. They require assistance adhering to
public health requirements (ex: acquiring personal protective equipment), adapting their
businesses (ex: e-commerce, curbside delivery, expanded patios, etc.) and attracting
customers who are less comfortable with in-person patronization.Throughout the
pandemic, the City has provided a variety of supports to businesses(ex: patio expansion
program, Digital Service Squad). Staff anticipate many of these services will need to
continue as the Province emerges from the current lockdown.
3- Post-Pandemic Recovery
During this phase (post-widely available vaccine), the lifting of public health measures will
enable businesses to return to a new normal form of operations. It is unknown how
quicklyany given businesswill see theircustomer base fullyreturn. Many businesses
maybe challenged to re-attract previous customers and attract new customers.
Input from Businesses Thus Far
Staff have engaged with businesses in a variety of ways, both formally and informally, at
various points throughout the pandemic.For example, during the summer, the City (via
the Small Business Centre) provided a business outreach program, providing one-on-one
supports to businesses. During the Fall, the Small Business Centre’s Digital Service
Squad engaged with more than 1,500 businesses across the region. Many of the City’s
partner organizations (ex: BIAs, Waterloo Region Tourism and Market Corporation) have
engaged their membership and shared feedback with staff. The common themes to date
include:
a)The need for direct and easy-to-access financial supports from the Provincial and
Federal governments to assist with key obligations, such as payroll and rent.
These programs are particularly necessary during restricted phases;
b)The need for clear and easy to understand operating guidelines within each phase
(ex: capacity limits, health and safety practices). It should be noted that certain
restricted phases require modifications to businesses which many proprietors feel
make operating their business unsustainable;
c) A desire for all levelsof government to make re-opening and recovery phases as
easy to achieve as possible, through elimination of red tape or any restrictions that
might further impede customer access;
d)Support, when appropriate, with re-engagement of customers. To date, the focus
has been on providing digital supports to enable businesses to transition to e-
commerce and curbside service models. In the future, this could include mass
marketing efforts or programming that drives residents to support local businesses.
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While the Provincial and Federal government have the means and mandate to deliver on
(a), the City can play an important role, either directly or in support, of themes (b), (c) and
(d). As staff continue to engage businesses throughout the pandemic, these themes may
change and new needs and priorities may emerge.
Proposed Approach to Supporting Business Recovery
As part of the approval of Make It Kitchener 2.0, City Council earmarked up to $5 million to
support wide-spread business recovery,includingthe following:
1.Support to impacted businesses looking to pivot and adapt;
2.Support to displaced workers looking to transition to new industries;
3.Support to new entrepreneurs, small businesses, startups and scaling companies;
4.Ensuring our commercial, main street and downtown areas remain vibrant; and,
5.Supporting businesses and development through efficient services.
It is clear that full economic recovery will take years, with supports required on a variety of
fronts. It is also clear that the solutions needed are not all currently known or as easy to
predict as they may have been in a pre-pandemic era. As such, rather than attempting to
create a singular, one-time plan, the community will be better served by utilizing a ‘living-
document’ approach that is agile, adaptive and responsive. Staff willcontinuously engage
the business community andprovide Council with options for supporting recovery
throughout the coming 12+ months, as follows:
Area of FocusIndustry Focus Anticipated Anticipated
Consultation Recommendations
Timingto Council
1.Support to Suburban CommercialUnderway & This report +
impacted through the additional
businesses Springrecommendations in
looking to early Spring 2021
Downtown CommercialUnderway
pivot and (with subsequent
Personal ServicesUnderway &
adapt.reports as needed)
through the
Spring
Tourism / HotelWinter –Spring
Cultural Organizations & Winter -Spring
Creative Industry
Professionals
Festival & Event Winter-Spring
Organizations
2.Support to Consultation will initially Spring-Fall 2021
displaced include organizations which Summer
workers support a broad spectrum of
looking to labour force development /
transitionto employment services as well
new as educational partners.
industries.
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3.Support to Organizations which support Underway & Spring 2021 +
entrepreneurs, business development in the through the additional
small areas identified.Springrecommendations
businesses, as needed
Office companiesUnderway &
startups and
through the
scaling
Spring/Summer
companies.
Manufacturing Underway &
through the
Spring/Summer
4.Ensuring Business Improvement OngoingInitially in Spring
commercial, Areas & Industry 2021, with future
main street Associations recommendations
and downtown as needed
areas remain
Major commercial and office Underway
vibrant.
property owners/landlords through the
Spring
5.Support AllOngoingThis report + future
business and work through the
development Development
through Services Review
efficient
services.
Note – dates are subject to change based on the changing nature of the pandemic.
Initially, staff anticipated widespread business engagement throughout December,
January and February, providing valuable insights to inform recommendations on recovery
efforts. However, at the time, it was not known that the Province would return to
lockdown. As such, business engagement has been delayed as many business operators
are focused on immediate challenges, and less focused on recovery efforts (Phases 2 and
3 noted above). Staff’s current focus is ensuring businesses are fully aware of the current
supports available during lockdown.
Immediate Supports
The following identifies a comprehensive list of services and supports staff recommend
initiating or continuing to support businesses impacted by the second lockdown. The
proposed supports align with feedback heard to date. Additional recommendations for
support will come forward in the future.
A. Small Business Centre Supports
Throughout the pandemic, the Small Business Centre has played a lead role in providing
supports and services to business owners across the region. This includes 1-on-1
support, expert training sessions, peer-2-peer networks, information sharing, etc. Most
notably, the Centre has led the regional effort for the provision of the Digital Main Street
programming, offering training supports and grants to support businesses as they adopt
digital and e-commerce platforms. In addition, the Centre provides significant support,
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mentoring and guidance to startups. For example, the Digital Main Street Squad made
contact with 1,500 businesses during the Fall of 2020.
The efforts of the Small Business Centre have been aided by provincial funding which is
set to expire in March of 2021. Should this funding not continue, staff recommend
authorization of additional staff supports, including up to $50,000 from the Make It
Kitchener 2.0 reserve to ensure any necessary services can continue.
B.Communications Supports
Given the importance of the Federal and Provincial funding programs, the City can play a
significant role in ensuring businesses are aware of any opportunities. To date, the City
has supported communications through the following:
Social media and e-newsletter promotions through all applicable channels (ex:
Small Business Centre, Downtown social media, etc.)
Encouraging partner organizations to promote (ex: Business Improvement Areas,
Waterloo Region Tourism, etc.)
Direct emails to Kitchener businesses (ex: as part of Licensing renewal notices,
emails from the Mayor, etc.)
Direct reach outs by staff members to businesses
Assisting tenants of City facilities (ex: Kitchener Market, 44 Gaukel) with accessing
programs.
City staffwill continue to explore newopportunities to ensure all businesses are aware of
the funding opportunities and can access the necessary guidance to understand the
opportunities, benefits and implications of each program.
C. Support for the Effortsof Key Partners
Throughout the pandemic, the KW Chamber of Commerce has played a leadership role in
ensuring a coordinated response to the challenges of businesses. For example, they
established a new program called ‘Chamber Check’ – an online training platform to assist
businesses with adapting to new COVID-19 protocols and public health requirements.
Recently, the KW Chamber of Commerce created a free online advice series where, twice
a week, any business in the region can gain advice from, and ask questions of,expertson
the various funding programs.
The Downtown Kitchener BIA and Belmont BIA each facilitated the provision of supports,
such as business grants and digital training. Communitech is providing a component of the
Digital Main Street service delivery. Recently, the Waterloo Region Tourism Marketing
Corporation launched a new grant program to support tourism-based businesses as they
continue to adapt to changing operations.The City will continue to support these
organizationsas needed.
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D.Waiving of Portable Sign Permit Fees
In Spring 2020, application fees for temporary/portable signs were waived in order to support
business recovery during the pandemic. Although the fees were waived, Planning staff
continued to receive and process temporary/portable sign permit applications throughout
2020. There is value in continuing to review and process these applications, even with fees
temporarily waived, in order to ensure that temporary signs are located in appropriate
locations (e.g. not interfering with sight lines at intersections) and with permission from
property owners (e.g. on properties with multiple commercial tenants).
Based on the volume of portable sign permit applications that were received throughout
2020, the waiving of fees for portable signs results in moderate revenue loss for the Planning
Division. Staff recommend waiving the collection of fees for portable sign permits, City-
wide, until at least June 30, 2021, with discretion to extend furtherbased on the state of the
pandemic.
E. Deferral of 2021 Business Licensing Fees
While staff still deem it important to collect the necessary renewal fees, staff are delaying
sending out renewal notices and are extending the due date from March 31 to June 30.
During this time, staff will defer adding any late fees to business licenses. In previous years,
late fees were collected beginning April 1 but with the extended due-date and deferral, there
may be an impact on the overall revenues. For reasons of public health and safety,
nuisance control,and consumer protection, businesses may still be required to provide
documentation confirming their establishment is maintained in accordance with applicable
codes and bylaws.
F. Free Parking in Downtown Lots on Evenings and Weekends
Prior to the pandemic, the City offered free parking in City surface parking lots after 5pm
and on Sundays. In response to the pandemic, this has been extended to include free
parking on Saturdays.This willallow downtown businesses to promote ease of access to
their customers. Parking Enterprise staff will continue to extendfree parking until at least
June 30, 2021, with discretion to extend furtherbased on the state of the pandemic.As a
result of the pandemic,limiteduse of the City’s downtown parking lots was observed
during the Summer of 2020. As such, the proposed extension shouldresult in minimal
revenue lossbeyond what was experienced in 2020.
G. Patio Approvals for Spring 2021
The Province has confirmed that relaxed requirements for licensed patios will continue in
2021. Like 2020, staff will ensure an efficient process to expedite approvals.
H. Continue to Support City Tenants
The City has variety of tenants in various facilities who are eligible for Federal and Provincial
funding programs. City staff will continue to support tenants in accessing these programs.
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STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services and the Corporate Strategic Plan goal of
building a vibrant economy.
FINANCIAL IMPLICATIONS:
Details of the potential financial impacts included in this report include:
Sign Permit Fees – Waiving of fees could result in a loss of $100,000 in revenue until
th
June 30, and up to $200,000 if continued for the balance of 2021.
Business Licensing Fees – the deferral of late fees could result in a loss of revenue
of up to $28,000.
Free Parking on Saturdays – based on 2020 activity, offering free parking in 2021 will
result in minimal lost revenue. Economic Development has provided the Parking
Enterprise with a subsidy valued at $35,000 for free parking between 5pm and 6pm,
which was introduced during the construction of ION, based on pre-pandemic
customer volume.
Small Business Centre Support – additional staffing resources of up to $50,000 would
be funded either through the Small Business Centre’s reserve or the Economic
Development 2.0 Reserve.
Patio Fees - waiving of municipal permit fees for patios on municipal right-of-ways
will result in a loss of approximately $4,500 in revenue.
The consolidated cost to the City of the economic relief measures approved by
Council previously (DSD-20-064 and DSD-20-067)and the economic relief measures
recommended in this report, is estimated to total $2.3M.The table below shows a
detailed breakdown of the estimatedeconomic supports:
ABA+B
Dollar Impact of Dollar Impact of
Economic Relief Economic
Measures Relief Measures
Previously Proposed as Total Relief
Approved By part of the Provided/Proposed
Council (DSD-Initial Phase of
20-064 and DSD-2021Support
20-067)
Waiver of Penalty and Interest$1,050,000To be $1,050,000
determined
Adjustments to Lease related
obligations$10,000N/A$10,000
Business Licensing Fees$40,000$28,000$68,000
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Parking$250,000$35,000$285,000
Property Tax Deferral Program$250,000N/A$250,000
Investment Income$250,000N/A$250,000
Rent Deferral & Relief*UnknownN/AUnknown
Small Business Centre SupportN/A$50,000$50,000
Temporary Sign Permit Fees$150,000$200,000$350,000
Patio Fees$4,500$4,500$9,000
Total Estimated Relief
Provided$2,004,500$317,500$2,322,000
Where the economic support measures proposed in this reportcannot be offset by Divisional
savings, any outstanding deficits will be funded from the Make it Kitchener 2.0 Reserve fund
unless other financial supports are provided by other levels of government to offset these
impacts. It is also expectedthat the Federal and Provincial governments will continue to
provide financial support to residents and businesses in 2021 as part of the pandemic
recovery efforts.
As part of the approval of Make It Kitchener 2.0, Council earmarked up to $5.0 million ofthe
Make It Kitchener 2.0 Reserve fund be allocated to support broad business recovery. Staff
will continue to engagebusinesses and consider any additional relief, for Council approval,
to be provided in the future as we work together to help to supportbusiness.
COMMUNITY ENGAGEMENT:
INFORM – This report has been posted to the City’s website with the agenda in advance of
the council / committee meeting.
CO
NSULT – City staff have been consulting with businesses, business associations and
the City’s Economic Development Advisory Committee throughout the pandemic, both
formally and informally. Additional formal consultation is anticipated in the coming months,
as noted in this report.
P
REVIOUS REPORTS/AUTHORITIES:
For municipal supports provided during the pandemic, refer to reports DSD-20-064 and DSD-20-067
APPROVEDBY: Justin Readman, General Manager, Development Services Division
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