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Yellowknife business owners face a daunting evacuation recovery

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For northern businesses under evacuation orders, closing shop for a few weeks can be the difference between staying afloat and going under.

To help businesses from the likes of Yellowknife, Hay River and Fort Smith, the NWT government has adapted one of its funding programs, making available up to $5,000 to “offset operational costs” for companies affected by wildfires.

Depending on the business, though, there’s a limit to how far that sum goes.

“I feel like $5,000 is very small, even just to cover the overall cost of rent, never mind the individual utilities,” said Jenn Baerg Steyn, owner of Yellowknife’s Book Cellar.

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Even if awarded the full $5,000, the grant wouldn’t cover half of the store’s $11,000 rent due September 1.

“It’s not even going to touch any of the other potential costs that are going to be associated, just depending on how long it drags out,” Baerg Steyn said.

The GNWT says it worked with local governments to hear the key concerns of northern business owners, which informed its decision to expand the Seed program, the source of the new $5,000 grants.

“These conversations are always ongoing,” said Melissa Cyr, an assistant deputy minister of economic development at the territorial government.

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“We understand the challenges, but … we did get great success with a similar program during Covid.”

To help businesses through the pandemic, the GNWT also used the Seed program. At the time, worth $5,000 were eventually increased to a cap of $12,500.

This time around, some business owners say $5,000 is simply not enough. Others worry whether they will even receive that amount.

“I don’t believe it’s the support they’re trying to tout it as, and I do believe it’s going to be incredibly difficult to access,” said Samantha Marriott, owner of the Radical Wellness osteopathy clinic in Yellowknife. “I don’t think many people will be getting up to that maximum $5,000.”

Businesses can include fixed costs like rent and utilities in Seed applications, but not salaries. That is complicating Marriott’s claim.

“I’m seriously questioning if I’m even eligible,” Marriott said. “I think a lot of people are thinking the same thing.”

Traffic lights on Franklin Avenue, Yellowknife’s main street. Ollie Williams/Cabin Radio

Even if she did receive the maximum, it still wouldn’t cover the expenses her business has racked up during the evacuation.

“We’re talking thousands of dollars over a single week in lost income,” said Marriott, “and whether I can still pay my mortgage that comes out automatically every week.”

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Rami Kassem, owner of Yellowknife’s Javaroma cafés, said businesses like his are “still paying the price for Covid” – and a fresh economic crisis is something $5,000 won’t fix.

The evacuation of Yellowknife is “going to put us behind big time,” he said.

Kassem said he’ll be out another $20,000 come September 1, counting only his rent. “The kind of business we have, to lose $35,000 or $40,000 – it’s too much money,” Kassem said. “To spend that without any income is too much money for a coffee shop.”

Asked what business owners should do if $5,000 is not enough support, Cyr said: “We do want businesses to look at their business interruption insurance policies as well, to see what can be covered.”

The businesses who spoke to Cabin Radio each indicated they are not eligible for insurance claims, citing reasons ranging from clauses in their agreements to ineligibility for certain coverage.

Loans through business development institutions like the territory’s BDIC could be an option. But Kassem said “we already have loans, lots of loans.”

“Loans over loans, without the support of the government? It’s too much.”

“I’m going to be looking at starting to pile onto credit cards, maybe a line of credit,” said Marriott. “And after that, I’m going to have to take a long hard look at if I can even reopen my business.”

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“I wouldn’t say I’m panicking,” said Baerg Steyn, “but it’s starting to become a concern. The unknowing, it has definitely kept me awake at night.”

Rami Kassem, owner of Javaroma, in the Cabin Radio studio
Rami Kassem, owner of Javaroma, in the Cabin Radio studio in 2018. Photo: Cabin Radio

Beyond money, there are practical concerns that companies urgently want to address.

The restaurant industry wants support to cover the cost of wasted food products, sitting on shelves and in refrigerators.

In the tourism sector, lodge owners still don’t have access to secure their sites if that requires travel through areas under evacuation orders.

For those in retail, merchandise is sitting in depots across North America, while client orders lie unfulfilled.

Healthcare practitioners are paid by the number of services they deliver, which impacts their income assistance and insurance coverage.

“Conversations are still ongoing with the federal government and with different industry players, as well, to understand what everyone’s needs are,” said Cyr. “We do want to design a program that meets the needs of those industry players.”

“I would like a policy standpoint that is very clear – what our steps are,” Baerg Steyn said.

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“That has less of an opportunity for hearsay and gossip, and the anxiety that is born out of that.

“Business is something that’s definitely hurting in general in Yellowknife, and needs a definite eye towards financial support that’s practical and has enough meat on its bones to actually keep us going.”

Kassem would like to see support from the federal government through institutions like CanNor, Canada’s northern economic development agency, which he says offered successful initiatives throughout COVID-19.

“What’s your fixed assets, estimated loss… they paid us and then we made the reports,” he said, describing that process.

“Then if they paid us more, we give money back. If they paid us less, then we would get more money. It was a fast and easy program.

“We need support collectively from the GNWT and the federal government, but the federal government cannot just support without being asked.”

For more information about the Seed program, visit this website. Eligible costs include insurance deductibles, rent and financing, and utilities; ineligible costs include salaries, costs covered by business continuity insurance, and the mortgage of any property beyond the primary business location.

“There needs to be a basic guaranteed income,” said Marriott.

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“No one should ever have to question if they have, or are going to tomorrow, somewhere safe to be. So, not just helping with the expenses but some of the losses as well. And I think there is a lot of disparity that occurs.

“At the top of the tier, we have all these first-rate territorial and federal government employees still getting their full paycheque, regardless of whether they’re working or how long they’re not working for. Then you get the rest of us Joe Blows who are scraping by and have none of the supports.”

Budgetary concerns are a major factor when it comes to further territorial support, as fire suppression efforts alone are estimated at $100 million – more than five times the amount allotted in the annual budget.

Asked if more help is on the way, Cyr said: “We are having conversations with the federal government, including CanNor, but we can’t speak to what that might look like at this time.

“With the federal government, it’s also to look at what funds may be available on their end before they can commit anything.”