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Edmonton businesses brace for a financially tough winter as Canada extends aid

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Edmonton businesses bracing for a tough few months amid the COVID-19 pandemic say government aid is helping to maintain operations.

During last week’s throne speech, the federal Liberal government promised to extend crucial pandemic aid programs such as the Canadian Emergency Wage subsidy until the summer of 2021.

Bryan Schmidt, operating partner and general manager of downtown’s Mercer Tavern, said the labour subsidy, which covers 75 per cent of employee wages, allowed the bar to experiment to find a better business model, especially with Rogers Place no longer helping to bring in customers.

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“It will be interesting to see how the winter goes, honestly,” he said. “I don’t know what to expect when we’re -30 C. How many people are still crawling out of a basement to come out and enjoy an evening out? People will get stir crazy and they will want to get out and mingle with other people, we hope. The subsidies are huge for us right now.”

He said the tavern is making a profit, but if government aid begins to dry up, he will simply have to readjust his business model again.

“They are definitely helping us stay open and provide entertainment, provide jobs,” Schmidt said. “We went from a staff of 70-plus before COVID to down to (not even) 30. So, it at least keeps those people in work.”

Rahim Meghji, the owner of the Renaissance Edmonton Airport Hotel, said occupancy is at roughly 25 per cent. Normally during September, it would be nearly full. He said he is using the federal wage subsidy but also taking on more debt and using savings to keep afloat.

“Luckily for us, the bank gave us a six-month deferral payment, but that’s come to an end at the end of this month,” he said. “Starting in October, we’ll be back paying our principle and our basic mortgage payment. The banks aren’t deferring anymore. They can only go for six months at a time. We’ve been feeding from our own savings over the duration of this.”

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For years, Meghji set aside roughly three per cent of the hotel’s revenue into savings for emergencies. He said that money will only be able to last him until the spring of next year.

While the wage subsidy does cover a majority of wages, Meghji said he still has to find money to cover the rest.

For his financial situation to turn around, he said the borders to the United States have to reopen.

“I don’t think a lot of people understand how much business we get from the United States,” Meghji said.

“Until the U.S. border opens up, I don’t think we’re going to see any bit of an economic recovery. I completely understand why they are closed right now … but at some point in time, we are going to have to open those borders in order to get some economic relief.”

jlabine@postmedia.com

Twitter.com/jefflabine

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