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Feds roll out government aid for hardest-hit businesses

Applicants for federal relief package must show revenue decline of at least 50%
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Glowbal Group owner Emad Yacoub: “my restaurant at the Pan Pacific Hotel, the Five Sails, is at about 5% capacity” | Chung Chow

Businesses in B.C. and elsewhere across Canada can start applying for the federal government’s Highly Affected Sectors Credit Availability Program (HASCAP) as of February 1.

HASCAP provides up to $1 million in low-interest loans to single businesses and up to $6.5 million for hotel chains and other hard-hit larger businesses with multiple locations.

“We are launching [HASCAP] to help those businesses hit hardest by the pandemic with low-interest, government-backed loans,” said Mary Ng, Minister of Small Business, Export Promotion and International Trade, in making the announcement on January 26.

Through HASCAP, the Business Development Bank of Canada will work with participating Canadian financial institutions to offer the government-guaranteed, low-interest loans, Ng said. According to a government statement, HASCAP is aimed at helping businesses with their day-to-day operating costs during the COVID-19 crisis and enabling them to invest in their longer-term prosperity.

HASCAP is available to businesses in all sectors that have been hit especially hard by the pandemic. This includes restaurants, businesses in the tourism and hospitality sectors and those that rely on in-person service.

To be eligible for HASCAP, businesses must show a year over year revenue decline of at least 50% in three months, within the eight months prior to their application.

This should not pose an obstacle for most, based on reports from the hospitality industry.

Earlier this month, Ingrid Jarrett, president and CEO of the BC Hotel Association, said her $3.2 billion industry has been ravaged, with occupancy of less than 30% at the end of 2020.

“That is a 60% drop from 2019,” she said. “We have 46% of properties reporting that if they don’t receive access to government-supported financing, they will not stay in business.”

“About 82% of all [hotel] properties in B.C. are small and medium-sized, independently owned and operated businesses,” Jarrett noted. “They are barely hanging on.”

The Fairmont Hotel Vancouver and other large hotels enjoyed new business in mid-2020 from British Columbians. But general manager Adam Laker said that business dried up when the government instituted travel restrictions on November 7.

He estimated that current occupancy is “in the 10% to 20% range.” 

Ian Tostenson, CEO of the BC Restaurant and Foodservices Association, estimated that about 20% of the province’s restaurants have closed as a result of the pandemic. That number, he added, could rise to more than 30% by the time restrictions ease. 

Glowbal Group restaurant owner Emad Yacoub estimated his losses on New Year’s Eve – when the province restricted service for the evening – at around $100,000.

“My restaurant at the Pan Pacific Hotel, the Five Sails, is at about 5% capacity,” Yacoub said.

HASCAP applicants must be able to show their financial institutions that they have previously applied for either the Canada Emergency Wage Subsidy or the Canada Emergency Rent Subsidy. 

Eligible businesses can start applying February 1 at principal financial institutions and more widely by February 15. More information is available at www.bdc.ca/hascap. •