New Hamilton business losing ‘tens of thousands of dollars per month’ is struggling to stay afloat

The first fitness studio they opened in Ancaster in March 2019 was prospering, so Julie Jarvie and her husband decided to expand.

In February 2020, they signed with F45 Training, the global fitness brand, to start a new location on the Stoney Creek Mountain that would open one month later.

You can guess how that worked out.

We probably had an 80 or 90 per cent drop in revenue once the pandemic hit," Jarvie said. When our locations were allowed 10 people at a time, we were losing around $5,000 per month. Now we're losing more like tens of thousands of dollars per month at each studio."

Like so many other shops across Hamilton, the pandemic has been a disaster for Jarvie's new-found business, a passion project she started with her husband after quitting their corporate jobs in Toronto in 2019. The goal was to create a safe, inclusive fitness environment accessible to everyone," she said. But now it's accessible only through recorded workout videos that, increasingly, would-be customers have found free alternatives to on YouTube.

There's another challenge facing Jarvie and every other business that opened shortly after the first lockdown measures: they are largely ineligible for government relief programs.

Some of the programs, like the Canadian Emergency Wage Subsidy (CEWS), require a 2019 tax return. The rent and wage subsidy programs allow businesses to compare their current monthly revenues to their revenues in January or February 2020 to demonstrate a drop in income, but that doesn't include businesses that opened in March 2020 or later.

The Canada Emergency Business Account, similarly, asks for a business registration number that existed prior to March 2020. Some require sales figures from the year prior.

The lack of subsidies leaves new businesses struggling to stay afloat amid an economic downturn that has crushed businesses that were open well before the first COVID-19 case was recorded. Dropping a new, prospective business isn't easy either, as many of those who opened in March or later had taken preliminary steps to opening months advance - bank loans, down payments on a lease, or hiring employees.

Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), said there are thousands and thousands" of business owners who opened during the pandemic.

We've been pushing and advocating strongly ... that excluding new businesses is really foolish government policy," he told the Star, noting that new businesses will be an important source of jobs that will help Canada's economic recovery from the pandemic.

In December, the Ontario government announced the Ontario Small Business Support Grant, a one-time grant of $10,000 to $20,000 for small businesses affected by the lockdown. The grant requires businesses to prove their decreased revenue by comparing their earnings from April 2019 to April 2020, which in theory would exclude newer businesses, though eligibility criteria for the grant has not yet been announced, according to the province.

Ministry of Finance spokesperson Emily Hogeveen has said small businesses that opened after March 2020 will not be excluded from the program and will be able to receive the grant if they meet the criteria.

In a statement, Katherine Cuplinskas, press secretary for Deputy Prime Minister Chrystia Freeland, said the government has introduced targeted support" to help hard-hit businesses, including an up to 75 per cent wage subsidy, rent subsidy, lockdown support, and an expanded Emergency Business Account loan.

Though the programs are not currently open to businesses that opened after the pandemic, Cuplinskas said the government is open to suggestions."

In recent months, Jarvie and her husband have been borrowing money from friends and family - once unthinkable," she says - to keep their dream alive.

For Jarvie, it's especially difficult to abandon something she'd planned for so long. And the uncertainty of the pandemic and when it will end leaves her calculating the risk of closing entirely when vaccinations could be around the corner.

Our family, for one thing, believes in us so much and what we were going to create," she said. They don't want us to walk away from it when it could be just months before we're operating again."

Jacob Lorinc is a Hamilton-based reporter covering business for The Spectator. The funding allows him to report on stories about education.