The B.C. government has set aside almost as much in fees to help small businesses navigate the application process for its COVID-19 recovery grants as it has currently paid out in actual grants.
The province has earmarked $31 million to assist businesses in hiring professional advisors to craft “recovery plans” that are required as part of each grant application process. So far the entire grant program has only paid out $50 million to businesses.
The government argues that the plans are beneficial to businesses, and will help give them valuable information during the pandemic. So far, $700,000 of the $31 million has been spent on invoiced on professional services for businesses.
Opposition Liberal critic Todd Stone said it’s a clear sign the grant program is bogged down by too much bureaucracy.
“Why is $31 million being spent on red tape to administer an application process which is essentially a four box form?” he asked in question period at the legislature.
“Why is that much money being spent on what is essentially a box ticking exercise instead of getting that money out to the small businesses who need those dollars to make sure that they are still standing on the other side of this pandemic.”
Small businesses with fewer than 142 employees are eligible for up to $30,000 in a non-repayable grant, or $45,000 for a tourism-dependent business.
Economic Recovery Minister Ravi Kahlon said the money is well-spent in helping businesses prepare to navigate the pandemic.
“The dollars were for supporting professional services for small businesses, up to $2,000 for every small business to build a recovery plan,” he said.
“Dollars to businesses owned by people with language barriers, to access supports to be able to fill in their applications and get the dollars they need. If that’s what the B.C. Liberals think is red tape, they are completely out of touch with small businesses throughout the province.”
The small business grant program has been beset by problems since it launched in September. More than $250 million earmarked for grants remains unspent, six months later, amid complaints about onerous requirements for revenue loss and other rules. The grant funding is set to expire at the end of this month.
Kahlon revised the program in December. He said he’s not ready to make more changes, but hasn’t ruled them out either.
“I’ve said from the beginning we have been nimble with the process, we’ve been adjusting the process, adjusting the targets with the small business community to be collaborative with them,” he said.
“We continue to see increase applications week over week. Sixty per cent of the applications are coming from tourism operators which get higher amount, $45,000. So over the next week or two we’re going to continue to watch that trend and then we’ll have more to say.”
The application process is averaging “between three to seven weeks,” said Kahlon. Approximately 60 per cent of applicants are from the tourism sector, he said.
Premier John Horgan last month promised more relief for large tourism-dependent businesses that don’t qualify for the small grants. The province’s transportation sector has also called for aid, saying it has been devastated by travel restrictions and needs financial help to continue to service small routes in remote communities like northern Vancouver Island.
Kahlon said aid packages for both sectors are still being considered.