CFIB And Why You Should Join With Ryan Mallough | E017
The voice of small business in Canada.
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Ryan Mallough, Director of Provincial Affairs for Ontario at the Canadian Federation of Independent Business. CFIB is the largest advocacy group for small business owners in Canada. Ryan Mallough talks about what CFIB does and why small business owners should consider becoming members.
Episode Highlights:
● 01:13 – Ryan Mallough explains what CFIB does.
● 04:33 – What have been some of CFIB’s big wins in the past?
● 11:09 – Aside from COVID-19, what are some of CFIB’s other big advocacy issues currently?
● 13:21 – They talk about how construction can infringe on businesses.
● 17:30 – How have they lobbied for businesses affected by COVID-19?
● 21:28 – What has been the feedback on commercial real estate subsidies?
● 26:44 – What else does CFIB offer it’s members?
● 29:16 – What does it cost to join CFIB?
3 Key Points
1. CFIB is informed by their 110,000 members’ opinions through regular surveys and mandate questions.
2. Right now in Canada, it is easier and more lucrative from a tax perspective to sell to a third party than it is to sell to a family member.
3. CFIB has been pushing for all Canadian governments across the country to start building in construction mitigation programs, including financial compensation for businesses that are disrupted by huge construction projects.
Tweetable Quotes:
● “The Canadian Federation of Independent Business has been around for 49 years now and we represent the big voice for small businesses. We operate across the country. We have offices in all 10 provinces.” – Ryan Mallough
● “We advocate for things that small businesses are looking for. So, things like reduced small business or corporate tax rates, changes to employment standards law, cutting red tape and regulations, permit signage, that sort of thing.” – Ryan Mallough
● “How can we help the business owners succeed? How can we make their lives easier when it comes to dealing with the government, while at the same time ensuring that the government understands the realities of running a small business?” – Ryan Mallough
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Ryan Mallough’s Linkedin
● CFIB.ca – Website for Canadian Federation of Independent Business
Full Transcript:
Announcer: Welcome to the Financial Planning For Canadian Business Owners podcast. You will hear about industry insights with award-winning financial planner and entrepreneur Jason Pereira. Through the interviews with different experts with their stories and advice, you will learn how you can navigate the challenges of being an entrepreneur, plan for success, and make the most of your business and life. And now, your host, Jason Pereira.
Jason Pereira: Hello. Welcome to Financial Planning For Canadian Business Owners. Just a reminder [inaudible 00:00:38] my newsletter at jasonpereira.ca where you get notification of all my podcasts, blog posts, and other goings on. Now, on today's show. Today on the show, I have Ryan Mallough, director of provincial affairs for Ontario for the Canadian Federation of Independent Business. CFIB is the largest advocacy group for small business owners in Canada. I brought him on to discuss what it is they do and why small business owners should consider becoming members. With that, here's my interview with Ryan. Hello, Ryan.
Ryan Mallough: Hello.
Jason Pereira: Thanks for taking the time today.
Ryan Mallough: Hey, thanks for having me.
Jason Pereira: My pleasure. Ryan Mallough of the Canadian Federation of Independent Business owners. Tell us about the CFIB and what it is you do.
Ryan Mallough: The Canadian Federation of Independent Business has been around for 49 years now, and we represent-
Jason Pereira: [crosstalk 00:01:19].
Ryan Mallough: ... the big boys for small businesses. We operate across the country. We've got offices in all 10 provinces as well as the initial one at Ottawa. We advocate for things that small businesses are looking for, so things like reduce small business or corporate tax rates, changes to employment standards law, cutting red tape and regulations, permit, signage, that sort of thing. We advocate for things like that across all three levels of government, and we're informed by our members' opinions, As much as I have my own opinions and I would love to share them with politicians, we make sure that the views we are representing are our members', and we do that through regular surveys and mandate questions. We do our best to take our members' calls. During COVID, we're doing it weekly. We put out a survey on a Friday afternoon, and by Monday, we're briefing officials with the data. We advocate really on that principle, and whatever it is that small business owners are looking for, that's what we'll push for with governments.
Ryan Mallough: The second thing that we do, because we have 110,000 members, we do have a fair bit of purchasing power when it comes to operating as a collective, so we do operate a number of saving programs for businesses on things like payroll software or payment credit card processing, payment modules, that sort of thing, insurance programs as well, and we pass on 100% of the savings onto our members because we're a not-for-profit.
Ryan Mallough: Then the final one, which is I think sort of our, not necessarily a secret, but certainly one of the best things that we do is we offer what we call a business resources service, and what this is, is a hotline that business owners can call into and ask any question under the sun, be it, "I have an employee who's going on mat leave. How do I go through the EI process," to, "The CRA is auditing me. What do I need to do?" to, "Hey, the government just changed that labor law. What is it?"
Ryan Mallough: Then you can call them with those questions. An expert will pick up the line, and they will answer the question for them, or if they can't on the spot, they will dig to the answer for them. So instead of the business owner having to spend 40 minutes on hold with CRA, we'll do that on your behalf because we know that business owners have to get back to running their business. They really don't have the time to do it [crosstalk 00:03:13]-
Jason Pereira: [crosstalk 00:03:13] CRA to get the wrong answer in most cases, unfortunately.
Ryan Mallough: That's-
Jason Pereira: [crosstalk 00:03:18].
Ryan Mallough: ... exactly it, which we do a biannual report card. We know, we know CRA's failings quite well.
Jason Pereira: Despite their contrary opinions, but yes.
Ryan Mallough: That hotline during COVID has been really significant for us to the point where normally this is a service that we only offer members. We've opened it up to every business owner in the country in recognition that they do have issues and they are looking for answers, and information is changing quickly. I'll say a normal day for us across the country is maybe 80 to a hundred calls. During COVID, we're up to 800 to a thousand calls a day-
Jason Pereira: Oh, my gosh.
Ryan Mallough: ... so we've expanded the staff, taking them from 30 to 90, but it is a huge service and one where we provide, we hope not only the information business owners are looking for, but also some peace of mind that you're getting a consistent answer from someone and someone can walk you through what it is you should be doing on the ground.
Jason Pereira: Excellent. Really, what you are is you're collective of a bunch of independent businesses who do not have the lobbying clout or the buying power that a major Fortune 500 would, and you get to basically get to go to Ottawa and say, "Hey, this is number of our memberships, so therefore, you should be listening to us." Before we talk about some of the logistics of this, let's talk about what it is you guys have done in the past and some of the big wins, and I mean that, big wins you've made on behalf of Canadian business owner.
Ryan Mallough: Sure. The one that people may be most familiar with recently is in the summer of 2017, the federal government announced that they were going to make some pretty significant tax changes and changes to the way that business owners are to structure their business, how you can pay family members. I mean, the line that everyone will remember is the prime minister during the campaign indicated that a lot of people use the small business corporate tax structure to cheat their taxes and imply that all business owners were tax cheats. Of course, our 110,000 members did not take that sitting down.
Jason Pereira: Yeah, says the man who never owned a business in his life. Yes, listen to [inaudible 00:05:05].
Ryan Mallough: They were rightfully offended and pretty irate at the statement, but also, this was a direct attack on their livelihoods. I mean, they structure their business, and oftentimes, a spouse as an integral part of the business but may not be a officially payrolled employee, but they do find a way to pay them under the way the structure was, and the government was looking to change that. We pushed back extremely hard on that, gave the finance minister a heck of a time on the summer barbecue circuit, I think, and were able to get them to not fully walk it back, but able to abandon a couple of their changes, walk back if you do the other ones. That's still a bit of an ongoing one for us, but that was one of our recent major fights.
Ryan Mallough: For those in Ontario, they'd be familiar with in the last year of the WINN government, they made some substantial changes to employment standards and labor laws, including the promise of a $15 minimum wage, paid sick days, as well as some pretty significant paperwork requirements when it came to scheduling. We back hard against those and were able to secure the Ford government's commitment to walk back a lot of those rules, and in particular, the scheduling rules, which would have required a business owner to indicate down to the minute the time that they changed or canceled the shift of the threat of a fine for not having that paperwork for five years, sort of one of those silly-
Jason Pereira: [crosstalk 00:06:15].
Ryan Mallough: ... government rules that I'm sure... Yeah. It's one of those things that I think a bureaucrat in a closed room thinks, "This makes a lot of sense," and then when you apply it to the real world, you can find out pretty quickly that it really doesn't work in practice.
Jason Pereira: It seems like they've got a very, very poor understanding of what it is to actually run a business and that they seem to think that it's all this logistically planned out stuff. Meanwhile, the vast majority of small businesses are nothing but putting out fires most of the days for the owners, even a well-organized business, just a matter of making sure it doesn't fall off the track. It's putting these kinds of burdens on the average Canadian business owner. It's just delusional, quite honestly.
Ryan Mallough: Yeah, and with the exceptions of perhaps an HR business or an accountant, no one really starts up a business to navigate the CRA or to-
Jason Pereira: No.
Ryan Mallough: ... figure out how to be an HR specialist. You start a business because you want to be your own boss, you've got something that you want to do or that you love to do, and you go and pursue it. That's really where we see our role is how can we help the business owners succeed, how can we make their life easier when it comes to dealing with government while at the same time ensuring that government understands the realities of running a small business.
Jason Pereira: Which they clearly don't. Let's be honest. I mean, the reality is, is that some of the tax policy, which you named, some of it is just... You look at what they were trying to accomplish with that, and it's clear that they didn't really have an understanding for how this was being used in the real world or what it really meant to run a business. You look at some of this stuff that they put in terms of red tape and barriers that... When you hear certain organizations or certain politicians talk about burden reduction and loosening red tape, people think, "I'll just go have businesses run all over people," but I think people have to get step back and remember that these are your neighbors.
Jason Pereira: These are somebody, maybe your family members. They're not going out there trying to basically screw the government for taxes or abuse their employees, but there's unfortunately a lowest common denominator approach to governance that basically says that, "We just have to assume that I'm just try the worst thing because this one guy got away with it. This one guy got away with it; therefore, we have to make sure no one could ever do that again," whereas the 99% of us are sloughed saying like, "Come on. Now you just increase my cost because of this one case?" It's a tough one. I mean, you guys also can claim... You've been around for a long time, as you said earlier, and you can claim a lot of other advocacy wins. I mean, my understanding is we have you guys to thank for the capital gains exemption on small business sales. Is that correct?
Ryan Mallough: Yep. That's something that we fought very hard for, and we like it where it is, but we're trying to extend it as well. I think for the average business owner now, it's in the $800,000-plus range, and for farmers and fisheries, it's at the million. We would like to see it get up to the million for business owners as well, and that largely comes out of the fact that, as an employee, I pay into CPP, my employer pays him to CPP. As a business owner, you tend not to get that or you're doubling up on your own if you aren't paying into it, but oftentimes, your retirement fund is the years that you put into the business-
Jason Pereira: Correct.
Ryan Mallough: ... so having that capital gains exemption is crucial for that. Now, there are still a lot of... I mean, succession is obviously a big issue for our members, especially as the boomer cohort who gets close to retiring, so there are still some things in the system to work out there. The one that we are hoping to see movement on as soon as possible, and obviously COVID's thrown a bit of a wrench in the timing, but right now in Canada, it is easier and more lucrative from a tax perspective to sell to a third party than it is to sell to a family member, so [crosstalk 00:09:34]-
Jason Pereira: [crosstalk 00:09:34] I know it well.
Ryan Mallough: And it's crazy, right? It makes no sense. I don't think anybody would volunteer that that is what the case is that they had to make a guess at it, and yet when you're going through the tax code, that really is the case. For a business to stay in the family, it's a bigger hit on the parent passing it down to a child than it is to sell to a third party.
Jason Pereira: Just to provide some background, typically, what we're getting at, what the government's getting at is if a third party comes along and they've got a bunch of money, they got a business, and they got a bunch of money in that business, they paid small business tax rates on it, and then they can buy another corporation that's about at the arm's length and not have to pay personal income tax on that. If you're starting to use someone at arm's length, then you've got a problem. They're basically saying you're... "Oh, wait a sec. You didn't pay personal income tax on this. Now you're giving it to your family members, so therefore, that's not going to work."
Jason Pereira: It's a bit of a mess, quite honestly, and it's... but I understand from a tax standpoint why they think it's unjust, but from a practicality standpoint, the finance minister took it on the chin there when... I think it was [inaudible 00:10:32] got up and said, "My understanding is that it's actually... I was meeting with a farmer who said it'll actually be cheaper for him to sell to McCain, who happens to be is in-laws, than it would be to his own son."
Jason Pereira: The finance minister said, "That's absolutely not true," to which I stood up and said, "You have... " while at home saying, "You have no idea what the tax code says because it absolutely is true, unfortunately." Unfortunately, the people making these policies don't often know. That's a big concern, quite honestly, because why would you ever in a society want that to be the case? It just doesn't make any sense. That's one of your big issues right now. COVID's one your big issue is. Tell me about your other pressing concerns and advocacy issues are right now for your membership.
Ryan Mallough: I mean, before COVID broke, and obviously, that's taken, rightfully so, has taken front and center, but before COVID broke, electricity costs and generation were a big one, especially here in Ontario. The way we price electricity in Ontario is kind of crazy where it's not based on the amount you use but based on the time of day that you use it, which as a resident might sound really good. You can do your laundry at 9:00 p.m. if you really want to, but as a business owner, it makes life really hard.
Ryan Mallough: I mean, you find peak hours tend to be in the middle of the day, and if you're, say, a restaurant dealing with the lunch rush, well, all the ovens and everything on in the middle of the day because that's when customers are coming in. You don't make pizzas at 4:00 in the morning to serve at 2:00 in the afternoon sort of thing. That was something that we were looking to press the government on.
Ryan Mallough: The small business corporate tax rate is always an issue that we watch very closely, and it was trending in the right direction. Heading into this in Ontario, we were pressing the government to continue in that right direction. We know Manitoba has a 0% rate, and that, ultimately, I think is the goal across the country on the small business side [crosstalk 00:12:07]-
Jason Pereira: Let's address that because some people hear that, and I remember when I teach financial planning, I will often say that I'm a believer in 0% tax risk corporations, to which I get this "you're like an anarchist" look from my students. I explain it. I mean, like... and I will explain, we've talked about this in the podcast before, but in reality, what do business owners do with cash in a corporation? They either, A, hire more people, B... who then pay taxes. B, buy more equipment [inaudible 00:12:29] those companies then pay taxes, C, pay themselves more, and then the top marginal rate Ontario is 53.53, so they pay on a lot of taxes. They pay a dividend, which, again, taxes. Then the last part of it is that maybe they invest it in non-business assets, in which case there's asset... That was even before the pass of the tax changes. That was taxed at 50-plus percent.
Jason Pereira: To take money off the table after operations, after everything's done from a business owner is just a way of reducing the expansionary effects of what that business owner can do with that money. That benefits all of society and a tax base, but it's always easier to say, "Well, corporations don't pay their fair share tax because I'm not a corporation, and therefore, I want to pay less." It is what it is. Okay. There's my rant. That was moving in the right direction. Good [inaudible 00:13:17] so the tax rates. Any other big pressing concerns lately?
Ryan Mallough: The other big one, which is near and dear to me because I live in downtown Toronto about a block south from where they're building the new LRT line, so I pass those businesses every day, having deal with that construction [crosstalk 00:13:31]-
Jason Pereira: Oh, my god. They're getting crushed.
Ryan Mallough: They're getting absolutely crushed, and COVID was the last thing anybody needed, but certainly these businesses, if they weren't already right on the doorstep, they certainly are now. One of the things that we've been pushing for, for all governments across the country to do is to start building in construction mitigation programs, including financial compensation for businesses that are disrupted by these monster construction projects.
Ryan Mallough: We actually got success. Montreal, Quebec city, and the township of Lévis, which sits in between the two, all three of them in Quebec had adopted these sort of programs where businesses who see a massive disruption or forced closure or see streets shut down for long periods of time because the construction are financially compensated. If you talk to any of these businesses here in Toronto that are along that construction line, that could have been a saving grace for them because they are, at best, they are covered in scaffolding, and it's hard to get to. At worst, they're being avoided entirely. I mean, the phrase "avoid Eglinton" to a Toronto person, it's almost a catch phrase at this point. Everybody knows you avoid Eglinton right now, which is really rough for those businesses.
Jason Pereira: It's such an unfair dichotomy because if your business that was in that area that was popping before making that what it was, paying taxes, doing everything right, they come along, and they do an expansionary project, which is, arguably, good for the betterment of the city long-run. It's going to drive more traffic there, be good for business long-run; however, you risk bankrupting all the people who were there first only to basically have them, when this is done, replaced by a bunch of new businesses who get to benefit from that even though they weren't there for the 20, 30 years some of these other businesses were.
Jason Pereira: I often say, it's the same thing with COVID. You don't want to be in a situation where anyone who was... I'll use restaurants, for example, anyone who was thinking about getting into the restaurant business before this and sitting on the cash is basically going, "Well, hey, you know what, all these bankruptcies of restaurants is going to mean less competition for me down the road." I mean, this is not conducive to the... Don't get me wrong. Things happen, disasters happen, but in the sense of justice, it's not right, and [crosstalk 00:15:28]-
Ryan Mallough: Yeah, and from a community standpoint too, it gets really rough. I mean, we've seen a few city institutions go down now because of COVID, and when we were talking about the LRT, I mean, you see entire neighborhoods get decimated. Will the storefronts always be empty? No. Businesses will come in and replace, especially when the project is done. There's likely to be a bit of gentrification that goes on there. You're going to get a few more chain stores coming into the area. Some people will like that. Some people won't. But every time a business on your main street or in your neighborhood closes, you lose a little bit of the business' soul, or the neighborhood. You lose a little bit of the neighborhood's soul.
Ryan Mallough: It's part of what knits our community together are the places that we gather, and those really are your local coffee shops, your restaurants, your stores. It's hard to think of a neighborhood anywhere that isn't defined by the businesses in it, your Little Italy, your Little Portugal, Kensington Market in Toronto, those areas are all... they're defined by the people, but they're defined by the businesses in those areas. You take them out, and you'd be hard pressed to recognize where you are.
Jason Pereira: Yeah, and it's one thing for a business to be taken out by their lack of ability to make it for whatever reason. It's something else entirely for a government to come in and say, "We're going to lay down some tracks in the next couple... and then we're going to rip it this road for the next three years and do nothing to help." That is tyranny in a way, and I can get into a rant there, but-
Ryan Mallough: You're lucky if it's three years. I mean, one of the other frustrations is the government comes in and says, "Here's a project," and the business owner goes, "Okay, I don't love it, but three years, I can tighten the belt a little bit. It'll be good when it's done. We'll make it." Two years into the project, you're getting another three years tacked onto the timeline, another three years after that. I mean, I always go back to... I'm pretty sure Union Station in Toronto was supposed to be finished for the Pan Am Games.
Jason Pereira: Oh, the Big Dig? Oh, that was a waste.
Ryan Mallough: That was-
Jason Pereira: Yeah, [crosstalk 00:17:07].
Ryan Mallough: That was five years ago. Still not-
Jason Pereira: Yeah. They're still working on the second half. It's notoriously the mechanical rabbit of large scale projects. These things never get done in time. Good. I'm glad to see some cities are moving on that. Hopefully, others will. I mean, it doesn't have to be enriching the business. It has to be allowing them to survive, kind of like how we're triaging the entire economy now. Tell me what you've done on the COVID front specifically. Have you had to engage government? I mean, I'm guessing some of the business policies on COVID have been less than satisfactory to me and others, but let's talk about what efforts you've done there to lobby on business behalf.
Ryan Mallough: Yeah. It's been a pretty all-hands-on-deck multifaceted conversation on our end between provincial governments, federal government, and municipal governments. On the federal side, we're glad to see that we have the number of programs that we do. I mean, you certainly have to give credit to a federal government that is not used to making policy quickly by anyone's standards. For them, they're operating at light speed. That being said, you can have highly detailed policy or fast policy. I don't think any government can really deliver both.
Ryan Mallough: What we're getting is fast, and oftentimes an announcement will drop and the details will come two weeks later, or for example, on the wage subsidy, I think when we got the details and seven weeks before money started actually flowing on that. It's rough for business owners because they're making decisions in realtime, and if money is promised on the first of the month but not delivered until the first of the next month, that's a whole month that they're trying to figure out how to stay afloat before funds come in.
Ryan Mallough: We were pushing initially for a wage subsidy. We were glad when the feds announced the 10%, but it was immediately clear that that wasn't going to be remotely enough to actually change anyone's mind when it came to making layoff decisions, so glad that they went to 75. Money has only just started to flow from that. I think Thursday, May 7th was the first day money started to go on that. We're sort of in a wait-and-see pattern now to see how that plays out. I think there are still kinks to be worked out. We were super glad to see that they are going to extend the program. I think the initial three-month window is... it's quickly closing. It was always going to be too short.
Ryan Mallough: We've heard that the Emergency Business Account, the bank loan is very popular. That being said, we also have a number of, in particular, sole proprietors, but any business owner that's paying themselves on a dividend is also finding a lot of frustration in accessing these programs. That's been a huge frustration. Again, it's been a back and forth, but our main goal is to make all of these programs as broadly accessible as possible to as many businesses as possible because when we do finally get to full re-openings, we want to make sure that as many businesses are able to be there to reopen as possible, and if these programs are too narrow, if money doesn't start flowing soon enough, more and more businesses close their doors and never come back.
Jason Pereira: Yeah. I mean, I have several issues with some of these programs, including the metrics they use for when you qualify in particular. I mean, a 30% revenue drop is a very big number, and especially when they first announced it, it was from previous years, so if you were in a rapid expansion phase, that meant nothing to you. Beyond that, I mean, there's tons of businesses out there that are narrow margin just by their nature. Food distribution, for one, comes to mind. You're talking about companies that have 2 to 4% margins, 30% drops in revenues.
Jason Pereira: You want them to keep their staff on payroll, that's essentially a 20-plus percent loss. That's not going to happen. I, for one, almost wished that... I really wished they had just been a little, I never say this, looser with the purse strings, and then basically just tax it back if you didn't need it. To me, that would have been a more "turn the hose on and worry about it later" solution, but at least a little bit more... You wouldn't miss as many people in my opinion, so-
Ryan Mallough: We saw that with CERB, like the Canada Emergency Response Benefit has very much been a "if you apply, you'll get it, but if we find out you shouldn't have applied, we will come back and take it from you, just not immediately because [inaudible 00:21:02] worried about getting the help out now."
Jason Pereira: Yeah, and don't get me wrong. There's definitely been abusive that. I know of people asking me like, "Well, my neighbor's got it, and they're still working." It's like, "Well, that's nice. They're going to pay back 100% of that and maybe penalties by the time this is all done, and I would rather not be on the wrong side of this legislation when it comes out," right.
Ryan Mallough: Absolutely. Yeah.
Jason Pereira: How about the feedback on the commercial real estate subsidies that are going on? I mean, that one, to me, has been... Oh. I'll let you go first, and I'll give you my opinion afterwards.
Ryan Mallough: Once the feds had sorted out wage subsidy, that was the original... The original largest concern that our members had was cost of labor, and, "If I'm going to try to keep my employees on while making little to no revenue, I need help. How do I go about that?" Once we got through that, it became immediately clear that the next biggest cost and the bill that was quickly coming up was rent. We needed them to move... We needed someone to move on rent, and with CFIB, we were talking to the feds, but we were very much going after the provinces at this point to help cover that because the feds did step up on the wage subsidy side, "Hey, provinces, we need something."
Ryan Mallough: We were glad to see that, in partnership, that feds and the provinces were able to come together with a program, and the program, the idea of the program is good. "People need rent help. Here is money for it." The execution of the program and the actual how it has played... well, I say how it's played out... how it's playing out initially because the application process actually isn't open yet, but how it is playing out now has been, I don't want to say universal, but just resounding disappointment from our members.
Ryan Mallough: For the most part, from the tenant side, it's "my landlord does not want to play ball here," which has been a concern. From the landlord's side, it has very much been a case of either I can't afford to eat 25%, which is what I'm being asked to do here, ultimately, which is a problem, or the paperwork, the amount of information that I need to collect as a landlord and the regular role that I have to go through is not going to be worth it to me, which, if that is the case or if the landlord is just saying no just because, as a tenant, you're in an impossible position now because you've already established the program. You can't pay rent. If your landlord isn't playing ball, there is no program for you. There is no way-
Jason Pereira: Exactly.
Ryan Mallough: ... to cover these costs. At the very least, in Ontario, they don't need the court to evict you. In Ontario, a landlord can evict you without a court order. They got to wait 16 days after delayed payment, but after that, they can put a lock on the door, which we have heard from across the province is happening, not a huge level, but it is happening on the ground. It's an issue that has come up before the program has even been rolled out that we are trying to get addressed immediately because as is, this program's not going to work.
Jason Pereira: I mean, I'm utterly frustrated the fact that they're seeming to jump through hoops to not directly pay business owners, I mean, with the exception of the Emergency Benefit Account, or sorry, the Emergency Business Account for 40,000, which they'll forgive up to 10,000 on if it's all paid up. They seem to be doing everything they can to not directly pay business owners. The subsidy on wages is coming through, "Okay, don't pay us as much as you're supposed to in payroll tax. You already had the money. We're not going to give it... You're not going to take it from me."
Jason Pereira: Now, this one where literally they will do forgivable loans to the landlords, why in God's name is it's not a forgivable loan to the business owner who could then basically, if they prove that they used an equivalent amount for the rent... even if [inaudible 00:24:16] can cover 75%, do something, but this is just literally find a way to make an excuse, and the problem is too is that... I think there was survey assessment, like one in five landlord's not playing ball on this when surveyed. I've even seen long emails of people drafting saying, "I'm not participating in this. They want me to take a haircut. If you need to pay it all, you can leave." Don't kick yourself. Landlords are going to use this to get rid of some tenants they didn't want to have in the first place or they wanted to get rid of, and now they have an excuse. This is execution just, again, because it seems like they're trying to do everything they can not to just cut the checks to the business owners. It's just frustrating.
Ryan Mallough: Yeah. That's what we're pushing on them to do now is if you were going to pay 50% of the rent anyway, just send the money straight to the tenant. Let them have to figure it out the other 50% with their landlord and how that's going to go, but you have the money earmarked to go anyway. If the landlord doesn't want to play ball, the tenant can prove it's rent money, send it to the tenant, and I mean, at least it's something for them.
Jason Pereira: Yeah. Exactly. I mean, between that and the 40K, maybe a BDC loan, which we talked about earlier and it's taking very, very long to get approved, or their own money, I mean, at least you're giving them a fighting chance.
Ryan Mallough: That's all they're looking for. No one is asking you to replace the revenue or profit of a business at this point. They understand the difficult situation that we're all in. I mean, a lot of business owners that aren't happy about being shut down, but they understand for safety reasons and the good of society that this is what was required, but give them a chance to come back, give them a chance to be there when this is over, and then fight for their life. That's all they're asking for. Are some not going to make it? Unfortunately, no, not everyone is going to make it, but we owe it... We governments, we CFIB as an advocacy group, owe it to them to give them the opportunity to try.
Jason Pereira: Yeah. I think it just speaks to thinking that everyone who owns a commercial building is super rich. It's not the case.
Ryan Mallough: No, not at all.
Jason Pereira: Can't really make that claim. In fact, I'm sure some of your members are specifically landlords and are not voicing their pleas with this right now, so-
Ryan Mallough: Yeah, about 10% of our members are landlords, and they are also not particularly thrilled with the program.
Jason Pereira: No, this is... Unfortunately, I know far too many who are, far too many businesses who are basically getting either a runaround on this or the landlord is thinking about it or the landlord's outward rejected it. It's not great. All right, we talked about the advocacy side. You do have all this buying power for discounts as well. Any other ancillary benefits beyond the fact that you are the voice of Canadian small business?
Ryan Mallough: I think the other big one for us is that business resources hotline, especially in a time like COVID. I mean, stuff changes so fast. You go from being close to being open almost overnight in some jurisdictions, not a lot of prep time. The program eligibility might change. The prime minister and premiers are giving press conferences daily at this point, so there's always something new.
Ryan Mallough: One of the things that we do is we help bring all of that information from all different sources into one place and to the best of our ability make it easily digestible. We do that through, of course, through our website, but then if you've got questions about it, we've got a hotline that you can call. If someone doesn't pick up live, someone will get back to you ASAP, and then the time that you need on the phone to be walked through it. We've gone through eligibility requirements for things like the wage subsidy or the emergency bank loan. We've gone through the essential businesses list. I personally made probably three or four dozen calls to Ontario essential businesses hotline on behalf of the business owners to determine whether or not they could be open. I probably got three or four dozen different answers from that call, which is its own frustration.
Jason Pereira: Surprising. No, cite your source.
Ryan Mallough: [crosstalk 00:27:52].
Jason Pereira: It's always the answer. Just give me an answer. Please, cite your source.
Ryan Mallough: Yes. Not just for the information that we know, but given how quickly things are flying out there, there's also a lot of rumors that are flying around. I mean, I know-
Jason Pereira: Oh, my god. There are.
Ryan Mallough: ... initially there was pictures going around of tickets issued to drivers with more than one person in the car, which freaked a lot of businesses out that had maybe two people in a delivery vehicle and were told they could still operate but are now wondering do I need to have a letter or something for my employees in case they get pulled over by the police? Well, it turns out the picture was a hoax. It wasn't true, so we were able to pin that down and get a direct answer from government to say, "There are a number of requirements, but that is not one of them."
Ryan Mallough: Again, I mentioned our average call volume in normal times is maybe 80 to a hundred calls a day. We're up to 800 to a thousand. I think we received around 20,000 COVID calls alone at this point. It's just a sign of how much businesses need that source of information. I mean, again, the government may have it on six or seven different websites overall, but it's also written in government and by government, and honestly, and a lot of times for government, not in a way that your general business owner can understand, so we help digest that and walk you through what it is you need to do to make sure that you're compliant and then what's available to you to keep your business afloat.
Jason Pereira: Excellent. Let's talk about what it cost to join. If someone wants to join as a business owner and benefit from all the good work that you guys are doing, what is a good [inaudible 00:29:15].
Ryan Mallough: I believe the flat rate is around between 350 and $375 on the year. You can do that in a annual payment. You can also do it in a Netflix style monthly payment breakout. There's also an additional premium per employee, as well as think it's about $25 a head per employee if I'm remembering correctly. In addition to that, we also do a lot of work with groups, so if you are part of a professional association or a group of businesses, we do have deals in place where we'll sign up the group for a lower premium so that your CFIB membership is built into your membership with that group as well. We've had a fair bit of success with that, but that comes with access to absolutely everything.
Ryan Mallough: You have full access to all of our savings programs, unlimited calls into that hotline. We advocate on your behalf. You'll get all of our surveys. You get direct lines in if you have a... even if it's a specific concern, say you've got an issue with your municipality on a permit. There are times where we are able to intervene on your behalf and walk through exactly what's going on there or write to your municipality and your behalf to say, "Hey, this rule doesn't make sense or it's unfair. Let's work together and get it changed."
Ryan Mallough: I will note, right now, too because we understand that that things are tough and margins are tight for a lot of businesses right now, we are offering a three-month introductory membership. It's three months free, full access to everything we've got going on. You can give us a try. Again, call into that number, seek out some advice. Then three months later, see if you think we're worth hanging onto and it's worth sticking around.
Ryan Mallough: Anybody who's unsure, I'd recommend that option as well, but yeah, I mean, for my money, and granted, I'm a little bit biased, but I do think we're worth it. I think that from talking to a lot of small business owners, again, having access to those answers is important, but also having a voice. I mean, I think a lot of people often find that as they're focused on their business and they have to focus with not just one but three different levels of government can be pretty daunting and a little bit overwhelming. We're here do that for you. We're here to speak what it is you want said to government, to make sure governments listen, to make sure that your voice is heard.
Jason Pereira: Thank you very much for taking the time to join us, Ryan. Where can people find more details on this?
Ryan Mallough: Cfib.ca. That's the best place to start, and everything's right there on the homepage. You'll find all the information to our COVID resources as well as the number to call in, any sales information. You can even sign up directly through the website as well.
Jason Pereira: Excellent. Thank you for taking the time, Ryan. Appreciate it.
Ryan Mallough: Hey, anytime.
Jason Pereira: That was my interview with Ryan Mallough of the CFIB. I hope you enjoyed that, and I hope you consider membership because, quite clearly, we are all benefiting from their advocacy and should all contribute. As always, if you enjoyed this podcast, please review on iTunes, Stitcher, whatever's your podcasts. Until next time, take care.
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