How Dan Kelly fought for small business survival during COVID
The moment Dan Kelly knew something was amiss was the chilly February day he walked into a popular dim sum restaurant in Richmond Hill, Ont., and immediately got a table.
The head of the Canadian Federation of Independent Business (CFIB), and the most vocal proponent for Canada’s small businesses, usually waits for a half-hour before getting served at Shanghai Dim Sum – widely known for its soup dumplings. But instead of being greeted by a healthy din and bustle of patrons, the restaurant was mostly empty, he recalled in a recent conversation.
One month later, as COVID-19 began shutting the world down last year, Kelly found himself doing TV and print interviews from his family’s 600-square-foot vacation condo in Florida, reminding Canadians to not give up on small businesses — even though no one had any clue what a COVID future would look like.
“I don’t think my family saw me even though I was home the entire time,” Kelly told BNN Bloomberg. “It was a sign that this was real, we got to get back home; and literally since then, I haven’t had a day off since March 2020.”
AN “INVALUABLE SOURCE”
In a normal year, you might never hear about Dan Kelly. He’s not one of Corporate Canada’s most recognizable faces and the CFIB doesn’t typically generate front-page headlines. But if you’re one of the millions of Canadians working at a small business that has endured strife due to COVID-19, you’re probably grateful he’s got your back.
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Kelly has been one of Main Street’s loudest voices over the past year, fighting for as much government support he can get for the thousands of small businesses looking for a fair shake to make it through the very worst of the lockdowns ordered based on public health recommendations. That megaphone, which he employs on behalf of Canada’s entrepreneurs whose businesses have been hanging on by a thread, also grants him access to the country’s most powerful corporate executives and policymakers.
“I reached out very early on [in the pandemic] to say, ‘Here’s what I’m seeing as far as the banking side. Small businesses will tell their banker only so much. What are you hearing from your side?’ And we started comparing notes,” said Dave McKay, chief executive officer at Royal Bank of Canada, in a phone interview.
“He’s an invaluable source of information of policy recommendations and the country has to listen.”
“BURNED IN MY MIND”
COVID-19’s impact over the past year for the entrepreneurs Kelly represents has been staggering. The number of active Canadian businesses fell five per cent to about 848,000 last year, according to Statistics Canada. More closures are likely, with a recent CFIB report finding that one out of every five Canadian businesses is at risk of closing for good by the time the pandemic ends. That same report found that to make it to this point, small businesses – which represent about 98 per cent of all companies in the country – took on an extra $135 billion in debt.
CFIB CEO Dan Kelly is photographed in front of empty storefronts on Queen Street West in Toronto, Ont. on March 29, 2021. (Peter Lehman/BNN Bloomberg)
“The [lockdown] measures that [governments have] been using have massive collateral damage and that damage is falling on a group that is not prepared to deal with it,” he said “It would be monstrous for society to basically shutter their ability to earn an income and not provide any help.”
While Ottawa’s lifeline to small businesses – the Canada Emergency Business Account (CEBA) – helped by providing interest-free and forgivable loans, the program didn’t come cheap. The Parliamentary Budget Officer estimated last year the program will cost Canadian taxpayers $9.34 billion in the fiscal year ending 2021.
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It’s a big reason why CFIB’s 95,000 current constituents are relying on Kelly for the agency’s support. Having CFIB at the table helped launch CEBA and other relief programs in the early weeks of the pandemic. The agency also saw a spike in business counseling calls with 78,000 business owners reaching out for help last year, including from a half-dozen people who contemplated taking their lives, Kelly said.
Kelly spoke of one Oakville, Ont. restaurant owner who opened her business in the early weeks of the pandemic and was barely selling anything. With two kids and few customers, she was struggling with her mental health. Eventually, the CFIB intervened with the restaurant’s lender which resulted in restructured loan payments and allowed her business to keep the doors open, Kelly said.
“You can imagine the pressure that’s been on their shoulders,” Kelly said. “It’s been burned into my mind during the pandemic.”
Other issues require more direct conversations with the government. Indeed, the CFIB has frequently raised concerns about regulations that may be well-intentioned, but should be viewed through a more pragmatic approach that keeps revenue flowing through the economy.
“The words that people in Ottawa want to avoid hearing are: ‘Dan Kelly is on the phone for you, minister.’”
– Goldy Hyder, chief executive officer of the Business Council of Canada
Grant Brodeur, who owns a couple of businesses in Thunder Bay, Ont., including the Loch Lomond Ski Area, said he reached out to CFIB earlier this winter after local lockdowns meant no one could hit the slopes, cutting out much-needed dollars to get through the season. A call to Kelly led to the CFIB connecting with government counterparts who later amended restrictions and allowed the ski hill to reopen, he said.
“I reached out to Dan and said I need some assistance,” Brodeur said in a phone interview. “Right away he picked up our cause and put the lead Ontario CFIB government advocacy person on the line with us.”
Kelly’s arrival as Canada’s small-business whisperer began in Winnipeg where he was born in August 1968 and raised, along with two siblings, by a stay-at-home mom and a father who worked as a pharmaceutical sales rep. His paternal grandfather owned a road construction business in the city at a time when deals were done on a handshake and a promise, he recalls.
“He was old school and operated with a high degree of integrity,” Kelly said. “He kept things going long enough so that he could pay all his debts.”
After graduating from the University of Manitoba in 1990 with a Commerce degree, he spent a year teaching English in Japan, a country that fostered his love of travel. When he returned to Winnipeg, he found a gig working in Manitoba Premier Gary Filmon’s administration as a policy advisor.
Dan Kelly with former Manitoba Premier Gary Filmon. (Photo courtesy of CFIB)
In 1994, Kelly made the jump to the CFIB in a junior policy role and quickly rose through the ranks of the organization, often volunteering to cover more regions and handle more responsibilities. Nearly two decades later in 2012, Kelly was appointed as CFIB’s president. Since then, the organization has grown to a staff of 400 while its membership rose to as many as 110,000 businesses at the start of 2020.
The CFIB under Kelly’s tutelage earned several big wins over the past decade, including getting merchant credit card charges by Visa and Mastercard reduced and currying government favour to lower the small business tax rate to nine per cent from 10.5 per cent in 2015.
Goldy Hyder, chief executive officer of the Business Council of Canada, told BNN Bloomberg in a phone interview Kelly was relentless when lobbying for small businesses in Ottawa.
“The words that people in Ottawa want to avoid hearing are: ‘Dan Kelly is on the phone for you, minister,’” he said. “I will say this about Dan, there’s no quit in this guy. He really works for the salt of the people in Canada and when they lose, he takes it personally.”
Kelly found a key ally last year in Deputy Prime Minister Chrystia Freeland after she added the finance portfolio to her responsibilities. She reached out to Kelly in her first day on the job after replacing Bill Morneau, he recalls. It was a small gesture he felt went a long way in improving relations between Ottawa and the small business community.
“The deputy prime minister speaks regularly with the small business community, including valued conversations with Kelly and the Canadian Federation of Independent Business,” said Katherine Cuplinskas, Freeland’s press secretary, in an emailed statement.
“She values his willingness to talk through issues. Our Team Canada effort to defeat the virus and support small businesses during the pandemic has greatly benefited from the input of small businesses across the country.”
Freeland declined a request for an interview to discuss her interactions with Kelly.
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Morneau on the other hand, “hated my guts,” Kelly said, adding they butted heads in 2017 over a controversial plan by the Liberals where several tax loopholes aimed at ending income sprinkling among small business owners and their families would be closed. The move was a blow to business owners who felt they were being perceived by the finance minister as tax cheats.
Morneau backed down on some of the government’s proposed changes, later promising to shrink the small businesses tax rate, which he eventually did. But the relationship remained frosty between CFIB and Ottawa until Freeland’s appointment, Kelly said. Morneau declined to comment for this article through a representative.
“[Freeland has] been really, really helpful in listening to the data that we’re presenting to her and making changes in real time,” he added.
Kelly is hoping she’ll continue being an ally if business confidence takes a turn for the worse. With Canada facing worrisome COVID-19 infection rates, Kelly worries that more small businesses will be forced to throw in the towel.
“They’ve taken down the handwritten sign that said, ‘Temporarily closed’, but I deeply worry that we have not seen even the start of the economic fallout of COVID-19,” Kelly lamented, referring to the small businesses that were forced to shut their doors due to lockdowns.
Even though he’s not a fan of business subsidies in general, Kelly wants governments to keep supporting small businesses until this pandemic is over. And if they don’t, he’ll probably work the phones (or Zoom meetings) – still not taking no for answer.