Daily COVID-19 update: $161 million in business support, suspension of student loan payments, and Michelin gets to keep operating

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The latest:

Minister of Business Geoff MacLellan announced what he characterized as “the first wave of support” for businesses, with $161 million “to immediately address cash flow and access to credit” for small and medium-sized businesses, with the following initiatives:

• deferring payments and interest on government loans, including those under the Jobs Fund, the Municipal Finance Corporation, and Housing Nova Scotia;

• deferring government-related fees for 30 days (which fees will be announced soon);

• Workers Compensation premiums are deferred, which MacLellan said would keep “$60 million in the hands of Nova Scotian businesses”;

• loan payments under the Small Business Loan Guarantee Program, which is administered by credit unions, are deferred until June 30;

• the Small Business Loan Guarantee Program is being “enhanced” such that it will be easier for small businesses to access credit up to $500,000; for those businesses that wouldn’t normally qualify, the government will guarantee the first $100,000;

• to help people work from home, the ongoing process to extend internet to rural areas ($46 million this year) is being sped up with an infusion of $15 million.

Premier Stephen McNeil said that he will announce new capital spending on Monday. He additionally urged the federal government to come forward with some sort of rent deferrals for small businesses and mortgage deferrals for their associated landlords.

McNeil also announced that:

• as of March 30, student loan payments are suspended for six months, until September 30; the suspension is automatic;

• all payments to Fishery and Farm Loan Boards are suspended until June 30;

• the government has implement a “prompt payment process” such that businesses with contracts to the government will be paid in five days, and not the usual 30;

• more broadly, McNeil said he is committed to keeping the farming, fishing, and construction industries working.

I had two questions today. First, I asked why Michelin, with three plants and 3,600 employees, is still operating, when clearly there are more than 50 employees working at any given shift. Business Minister Geoff MacLellan responded:

[Michelin is] a very important symbolic employer here. The Michelin footprint and the Michelin family have been here for generations in the province and I had the chance to talk to their lead here in the province, Andrew, about what the impact is on their operations that they have and what they’re going to do in terms of mitigating, in terms of their plans to move forward and continue as much production as possible.

Obviously, everyone in the province, small businesses, corporations, all Nova Scotians are adhering to the warnings and the protocols by Dr. Strang and his team and the premier and what people have been advised to do.

With respect to Michelin directly, they are obviously following all the health protocols while maintaining a certain amount of their operations into the near future. So Andrew and his team understand the impact of COVID-19 and how it’s hitting our economy, hitting his workers and their families, and they’re going to do the best to keep their employees whole and make sure as many as possible can be part of the continuing production and at the same time follow the public safety messages first and foremost and make sure we keep people safe.

I also asked about deferment of utility (as in Nova Scotia Power and Halifax Water) and loan payments — isn’t that just kicking the economic impact down the road? Won’t it be the case that in three months, or whenever this emergency is past, working people and small businesses will be saddled with addition debt and face double payments and other hardship? Is deferment the best approach?

To that, McNeil answered:

It is actually taking the pressure off now for a period of time that would allow for the lender as well as the person renting from them to negotiate longer term to pay back what would be owed. It wouldn’t be paid back on the first month of operation, it’d be paid back over a period of months, potentially years. That would be something that would be worked out between the individual business that is renting from that corporation and quite frankly the terms that the bank would provide for the loans.

Maybe I phrased my question poorly, but McNeil was only addressing small businesses and their landlords, and not the specific issue of people’s and businesses’ utility bills. But even considering the narrow issue of small business rent, this is unsatisfying — I can’t see how this doesn’t further enrich the propertied class at the expense of small businesses.

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