70 PINE STREET, BRACEBRIDGE, ONTARIO P1L 1N3

Telephone (705) 645-2231 / Fax (705) 645-5319 / 1-800-461-4210 (705 area code) www.muskoka.on.ca

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To: Chair and Members Finance and Corporate Services Committee

From: Tina Kilbourne Team Lead, CIU

Date: May 13, 2020

Subject: Proposed Muskoka Business Recovery Fund

Report: FCS-4-2020-1 ___________________________________________________________________________

Recommendation

This report is provided for information.

Origin

The District Chair and senior staff at the District of Muskoka were approached by Muskoka Futures, the Bracebridge Chamber of Commerce and the Muskoka Lakes Chamber of Commerce regarding the development of a District-supported fund to address gaps in Federal funding programs for small businesses that were required to close due to COVID-19. Small businesses across Muskoka were indicating that due to a number of factors, they were ineligible for Federal funding, struggling with lost revenue, and concerned about their short and long-term viability.

Background

As a result of the COVID-19 pandemic, businesses across Muskoka are being significantly impacted due to mandatory closures and declining revenues. Local Chambers of Commerce began surveying businesses starting in mid-March and have discovered that although a few have been able to adapt quickly and maintain or improve revenue, those are the exceptions. The more common response from the survey indicated businesses were experiencing hardship. For instance:

• more than 84% of businesses have seen a decline in business; • 5% of businesses were already in crisis; • 16% of businesses had 30 days or less until they would be unable to remain

operational; and • 37% of respondents do not know how long they can last until they reach a financial

crisis from which they will be forced to close permanently.

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Although the Federal government has announced numerous measures to support businesses, eligibility criteria leave some without access to funds. Feedback from Muskoka’s Chambers of Commerce indicate those most at risk in Muskoka include unincorporated sole proprietorships and seasonal businesses.

Similar concerns are being reported in municipalities across Ontario. According to information provided to District staff by the City of Brampton’s Economic Support Task Force, the eligibility criteria of Federal support programs exclude entrepreneurs and micro businesses e.g. hair salons, health and beauty spas, barber shops, cleaning businesses, landscape businesses, mom and pop restaurants, boutique marketing agencies and start-ups.

Further, the Canadian Federation of Independent Business (CFIB) received nearly 11,000 responses to their COVID-19: State of Small Business Survey and found that:

• 79% of businesses are closed or have reduced operations; • more than 50% of businesses that remain open saw gross revenues drop by more

than 55%; • 50% of businesses aren't sure if they will survive if restrictions are still in place at the

end of May; and • 25% of businesses remain ineligible for the Canada Emergency Business Account

(CEBA), despite the relaxed eligibility criteria.

There are approximately 6,000 businesses across Muskoka, which, based on CFIB's findings, would mean approximately 1,500 local businesses could be ineligible for CEBA.

The Funding Gap Chart, attached to this report as Appendix A, illustrates the current Federal programs available and the gaps for Muskoka businesses.

In summary, key gaps for Muskoka’s small businesses include:

• businesses in operation for less than 2 years; • businesses with a 2019 payroll less than $20,000; and • businesses that experienced significant revenue loss due to the 2019 spring flooding

in Muskoka.

According to Muskoka Futures, Provincial programs aimed at small businesses, while welcome, do not provide the magnitude of support necessary for Muskoka’s smaller businesses, contractors and sole proprietorships:

• reduced costs for electricity (e.g. set to lowest rate for time-of-use customers) for 45 days;

• temporary increases to the Employer Health Tax exemption (e.g. from $490,000 to $1M);

• deferral of penalties and interest on late tax returns; and • deferred payment of Workplace Safety and Insurance Board (WSIB) premiums for

six months.

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Further, while the timing of each Provincial and Federal program will vary, there is anecdotal evidence that some of what has been announced is not flowing quickly enough to support the most at-risk. Those concerned about their ability to avoid financial crises in the next 30 to 60 days will become more unstable the longer it takes for funds to flow. A local funding program as the one detailed within this report, may allow for a turnaround time of 24-48 hours, depending on the amount of the loan (e.g. smaller loans have shorter turnarounds).

Analysis

A. Proposal:

Muskoka Business Recovery Fund

Muskoka Futures is proposing that a Muskoka Business Recovery Fund be established in conjunction with the District, which Muskoka Futures would administer.

The intent of the proposed Muskoka Business Recovery Fund is to provide timely assistance to businesses in Muskoka to ensure they not only survive during the short-term, but are well-positioned for the long-term, recognizing there will be a “new normal” as the economy reopens in phases.

Muskoka Futures anticipates receiving approximately $1M in late May from FedNor through the Community Futures Program, specifically targeted to support businesses that are not eligible for other Federal programs. To ensure local businesses have access to a robust financial recovery program and Muskoka Futures effectively leverages the $1M Federal funding, they are respectfully asking the District for a loan of $750,000.

Assuming a Muskoka Business Recovery Fund of $1.75M is established, the following small business loans could be flowed:

• 70 loans with a proposed maximum principal of $25,000; • 115 loans with an average principal of $15,000 (based on experience of the County

of Wellington); or • an even greater number of loans with principals of lesser amounts.

These loans would not only help businesses survive, they would help stabilize employment and provide critical products and services in Muskoka.

Muskoka Futures has indicated that they can quickly ramp up to manage this additional fund and has the necessary governance, accountability and infrastructure in place to support lending activities.

In addition, financial resources would be paired with the advisory services provided by a wide range of business support organizations, including, but not limited to:

• Muskoka Futures; • Area Municipality Economic Development staff; • Chambers of Commerce;

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• Tourism organizations such as Explorer’s Edge and Muskoka Tourism Marketing Agency; and

• Muskoka Small Business Centre.

Loan Terms and Conditions

Small business loans provided through FedNor funding must meet certain guidelines and Muskoka Futures recommends all Muskoka Business Recovery Fund loans are subject to the following terms and conditions:

• do not duplicate other Federal or Provincial Programs*; • do not exceed $25,000 per business; • maximum amortization of 5-years, e.g. to enhance long-term cash flow as

businesses recover, and to maximize opportunity for repayment of funds; • interest rate of 0% for up to 12 months, followed by Bank Prime Interest Rate

(currently 2.45%) for remainder of the term; • no payments required for first 12 months; • no fees will be incurred; and • loans are open for repayment at any time with no early repayment penalties, e.g. this

is standard for all Muskoka Futures loans and means any repayments during the first 12 months would go directly towards the principal.

Approximate Monthly Loan Payments based on the above terms for Years 2 through 5:

• $550 per month (based on $25,000 loan with no payments made in year 1); or • $330 per month (based on $15,000 loan with no payments made in year 1).

*Muskoka Futures is recommending that local businesses able to access the recently announced Canada Emergency Commercial Rent Assistance (CECRA) program (e.g. rent relief of up to 75%) be eligible for only 25% of monthly rent expenses under the Muskoka Business Recovery Fund. Businesses accessing other Federal funding such as Canada Emergency Business Account (CEBA) or Canadian Emergency Wage Subsidy (CEWS) would not be eligible for local dollars under the Muskoka Business Recovery Fund.

Administration

Muskoka Futures has established administrative practices and assures the District it will be able to not only ramp up quickly and divert resources to support a recovery loan program, they have a loan review and approval process with fast response times. Once all documentation is received from an applicant (e.g. year-to-date and most recent year-end financial statements) staff will determine:

• businesses are located in Muskoka; • eligibility for other programs (e.g. ensuring businesses are not "double dipping"); • ability of the applicant to repay the loan; • ways applicants can adapt and adjust their business for long-term success; and • amount of funding to be approved.

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Muskoka Futures anticipates most applicants will apply for the maximum loan of $25,000, however staff may recommend a lesser loan. The goal will be to ensure sufficient support is provided to applicants, while supporting as many businesses as possible.

Loans under $25,000 will be recommended by Muskoka Futures’ staff and approved by a Muskoka Futures committee that will include 5 of the 11 members on its board of directors, within 24 to 48 hours of submission.

Proposed Terms of $750,000 District Loan to Muskoka Futures

To enhance the FedNor funding, Muskoka Futures is proposing the District provide a $750,000 loan to Muskoka Futures at a 0% interest rate for a 5-year term.

Repayments will be made by Muskoka Futures to the District annually, starting at the end of the second year, based on repayments by businesses and prorated based on the contributions of the District and Muskoka Futures.

Muskoka Futures anticipates the fund will be fully subscribed or utilized, based on the experience of other community futures development corporations in similar sized regions. However, if after 12 months there are funds available, Muskoka Futures will return these monies.

Muskoka Futures has requested that any loan losses be shared on a prorated basis between Muskoka Futures and the District, based on their respective contributions to the Muskoka Business Recovery Fund.

Reporting

Semi-annual reporting is proposed to be provided by Muskoka Futures to the Finance and Corporate Services Committee and would include data such as the number of active loans, average loan amounts, types of businesses supported, annual repayment amounts, percentage and amount of loan defaults, benefits to the community, distribution across Muskoka, and other information, as required. In addition, Muskoka Futures will provide confirmation that eligibility criteria, as identified above, have been met.

B. Considerations:

When assessing this proposal, there are a number of considerations that need to be weighed including:

• Alignment with other District policies or Strategic Priorities; • Working with Muskoka Futures • Legal considerations (related to Section 106 of the Municipal Act); • Previous loans considered by District Council; • Programs offered by other municipalities; • Opportunity to Leverage Funding; and • Alternatives.

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Alignment with District Policies and Strategic Priorities

Partnering with Muskoka Futures to leverage Federal funding and create a robust business recovery loan program aligns with several of Council’s Strategic Priorities, and in particular the following:

• Investigating innovative methods, practices and approaches for efficient and effective program delivery across Muskoka;

• Collaborating with all partners to support the retention, expansion and attraction of businesses; and

• Providing leadership and support to develop community capacity to work together as individuals, groups, organizations, and networks to address challenges.

The proposed recovery loan program also aligns with the guiding principles within the District’s Grant Policy, which was established to provide Council with a consistent, and uniform procedure when considering grant requests from the community. This loan proposal meets the following criteria:

• Will be used to support economic development; • Will be provided to a non-profit, non-government organization; • Serves and benefits all of Muskoka; and • Demonstrates a clear return for the people of Muskoka.

Working with Muskoka Futures

For more than 30 years the Federal Government has supported economic development in rural communities across Canada through the Community Futures program. Community Future Development Corporations (CFDCs) are staffed by professionals and governed by a skilled volunteer board of directors who are familiar with their communities' needs, concerns and future development priorities. The board of directors reside in 5 of Muskoka’s lower tiers and represent municipal, non-profit, retail, tourism, legal, investment, accounting and consultation sectors, among others.

Muskoka Community Futures Development Corporation (Muskoka Futures) is the local CFDC for Muskoka and has been supporting businesses in Muskoka since 1988 through two core programs which align well with this proposed recovery loan program:

• access to capital for small and medium-sized businesses e.g. Investment Fund; and • business Counselling and Advisory services.

With a current turnaround time of 24 to 48 hours on most small loans, Muskoka Futures indicates they are well-positioned to get funding into the hands of the businesses that need it most and have standard administrative procedures in place to manage this fund both effectively and efficiently.

Muskoka Futures manages a current Investment Fund of approximately $10M, of which more than $8.5M is currently supporting over 190 businesses. Business counselling and advisory services support another 300 businesses each year. A breakdown of current

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Muskoka Futures’ loans by municipality is included in Appendix B and demonstrates distribution across all six area municipalities.

Muskoka Futures has an exceptional track record, which can be attributed to astute business analysis, strong advisory services and excellent governance. Despite often supporting early-stage small businesses, and lending money in emergency situations such as the recent flooding, the Investment Fund experiences losses of approximately 1% annually on average.

Operational costs for Muskoka Futures are supported by FedNor under 5-year operational agreements, therefore any funds loaned by the District would not go towards operational costs.

The six Chambers of Commerce across Muskoka, as well as the Parry Sound Muskoka Community Network, support the establishment of a business recovery fund, encourage the District to contribute funding to ensure loan opportunities are available for as many small businesses within Muskoka as possible, and are supportive of Muskoka Futures acting as the administrators of the fund. Letters of support are attached to this report as Appendix C.

Legal Considerations

Section 106 of the Municipal Act, 2001 S.O. 2001, c. 25 (Municipal Act, 2001) provides that a municipality shall not assist directly or indirectly any manufacturing business or other industrial or commercial enterprise through the granting of bonuses. This section of the Act is generally referred to as the anti-bonusing provision and is intended to draw the line between supporting genuine municipal interests and conferring improper assistance or an obvious advantage to business interests. Unfortunately, while this section is generally known and often referenced the full extent of its interpretation and application remains problematic.

Ontario courts have had only a limited number of opportunities to review and comment on the application of Section 106. That said, these decisions have set out some general principles with respect to the meaning of Section 106. The court has determined that the actions by a municipality cannot confer an obvious advantage to a manufacturing business or other industrial or commercial enterprise. An obvious advantage has been equated to getting “something for nothing” or an “unmerited windfall”. Further, the courts have sought to identify whether a valid public purpose was the driving force behind the decision or whether a net benefit to the municipality was achieved.

That said, while general principles have been stated, the lack of determined cases has limited the court’s opportunity to apply and develop these principles, making it difficult to predict or determine when a court may find that a business did receive an “obvious advantage” or what will amount to “public purpose”.

Providing a loan to Muskoka Futures as a non-profit organization would not appear to run afoul of Section 106, at least in so far as it would not provide a direct benefit to a manufacturing business or other industrial or commercial enterprise. Staff have considered whether a loan provided to Muskoka Futures would provide an indirect benefit to such businesses. Given the lack of guidance from the court, this determination is more problematic, however, given that District involvement would be limited to providing funds to

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Muskoka Futures, that the loans provided by Muskoka Futures through the Muskoka Business Recovery Fund would be available to all eligible small businesses in Muskoka through a transparent application process, and the overall goal is to help with the economic recovery of all municipalities in the District, staff believe that the potential risk that a court may determine that the loan to Muskoka Futures is contrary to Section 106 is limited and could be further reduced through an appropriately drafted funding agreement, subject to Council’s decision.

Previous Loans Considered by District Council

In analyzing the proposal, staff also considered whether loans had been issued or contemplated in the past. In 2017, District Council approved a $10M loan to Lakeland Energy Ltd., a municipally-owned provider of high speed internet, to support fibre expansion within the District for the benefit of all municipalities. The District loan was intended to compliment a Federal grant provided through the Connect to Innovate program.

The proposed terms of the loan to Lakeland Energy Ltd. included an annual interest calculated as the higher of 3% or the annual interest rate earned on the District’s bond portfolio plus 0.50%, for a period of no longer than five years. This loan was never issued as Lakeland was not successful in receiving the Federal grant.

Although, the context of this loan is different as the business in question was owned by other municipalities, the concept of providing a loan to an entity for the benefit of all of Muskoka is relevant and supports the proposal by Muskoka Futures. It should be noted that similar cautions related to Section 106 were considered when Council approved this request.

Programs offered by Other Municipalities

Across Canada, municipalities are finding ways to support small businesses in their communities. Although information is changing rapidly, staff have undertaken a benchmarking exercise and found the most common responses are:

• deferring property tax increases and payments without penalties or interest; • waiving penalties and interest for utility and solid waste payments; • deferring rent payments; • establishing economic recovery task forces; and • establishing emergency business support loans (e.g. Wellington County - Ontario,

City of Cornwall - Ontario, City of Victoria - British Columbia, City of Shawinigan - Quebec, Alma-Lac Saint-Jean Est - Quebec).

Additional Leverages

In an effort to further leverage resources to support businesses during these unprecedented times, while also enabling them to adapt, the Parry Sound-Muskoka Community Network (PMCN) has confirmed that funds available through its Business Technology Improvement Fund (B-TIF) align well to the Muskoka Business Recovery Fund.

B-TIF funding is available to encourage businesses to adopt digital technology, including the redesign of business models and processes to improve operations and

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competitiveness. B-TIF provides up to $25,000 in non-repayable funding to businesses on a matching basis.

The Muskoka Business Recovery Fund criteria will ensure that eligible businesses are directed to apply to PMCN to leverage additional support to help them implement solutions for adapting during and post pandemic.

Alternatives

The District is not required to contribute to the local recovery fund proposed. An alternative course of action is to let Muskoka Futures manage the FedNor funding of approximately $1M to support local economic recovery without additional funding from the District which is derived from property tax dollars. The impact would be a reduced number of loans that could be provided. As an example, using only the FedNor funding without a District contribution, the following could be funded:

• 40 loans with a proposed maximum principal of $25,000; or • 67 loans with an average principal of $15,000 (based on experience of the County of

Wellington).

Financial Considerations

A $750,000 loan can be made available by drawing on the District’s Tax Stabilization Reserve, which is meant for emergencies like those resulting from the impacts of COVID-19. The balance in this reserve is $2.7M. It is important to note, however, that staff are not yet aware of the extent of COVID-19 related financial impacts for 2020 or if the District will be required to draw on reserve funds to offset any budget shortfalls for this fiscal year.

An interest free loan of $750,000, with four annual repayments starting in year 2, would cost the District approximately $47,000 in lost interest income, assuming an average annual return of 2% which is the average achieved over the last five years. This lost interest income will vary based on the markets which have taken a considerable downturn as a result of the pandemic.

As noted in the Proposal section, Muskoka Futures is proposing that the cost of defaulted loans be shared on a prorated basis between Muskoka Futures and the District, based on their respective contributions to the Muskoka Business Recovery Fund. Over the five years, loan losses could accumulate to approximately $23,000, based on a default rate of 1% per year and loan repayments scheduled between years 2 and 5. It should also be highlighted that although historically, Muskoka Futures has indicated the loan loss rate is 1%, given the economic impacts of the pandemic, this rate may be higher for the next few years which would increase the District’s exposure.

Should Council wish to proceed with the loan to Muskoka Futures, staff would recommend that District Council consider a grant or loan forgiveness equal to the proportional loan losses accumulated over the five-year loan period at the conclusion of the term, upon request by Muskoka Futures. This methodology would allow for a separate consideration to be made and further reduce the risk that the court may find the loan to Muskoka Futures contrary to Section 106.

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Communications

Muskoka Futures will work with its established small business partners (e.g. Chambers of Commerce, area municipality Economic Development staff, tourism organizations such as Explorer’s Edge and Muskoka Tourism Marketing Agency, Muskoka Small Business Centre) and the District, to develop and launch an aggressive communications outreach strategy. The focus of the strategy will ensure information regarding the Muskoka Business Recovery Fund reaches all 6,000 businesses across Muskoka in a timely fashion.

Strategic Priorities

Click on icons below to view strategies under each priority area:

s. 2.8, 2.9 s. 3.1, 3.5 s. 5.6

Respectfully submitted,

Original signed by

Michael Duben, B.A., LL.B Chief Administrative Officer

Original signed by

Julie Stevens, CPA, CA Commissioner, Finance and Corporate Services

Original signed by

Tina Kilbourne, B.Soc.Sc, M.A. Team Lead, CIU

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Appendix A

Funding Gap Chart: Federal COVID-19 Supports for Canadian Businesses

Program Description Eligibility Gap

Canada Emergency Business Account (CEBA)

Canadian Banks are providing interest-free loans to small businesses of up to $40,000. These loans are guaranteed by the Federal Government. If the loan is repaid in full by December 31, 2022, 25% of the loan will be forgiven.

Small businesses and not-for-profits with a 2019 payroll between $20,000 to $1.5M.

Many small businesses, such as sole proprietorships, do not have any formal payroll, or have very limited seasonal payrolls.

Responses to the Chamber of Commerce surveys is indicating that sole proprietorships and seasonal businesses are particularly concerned about being ineligible.

Canada Emergency Wage Subsidy (CEWS)

Qualifying businesses can receive up to 75% in a wage subsidy, for up to three months, retroactive to March 15, 2020. The subsidy will provide up to $847 per week per employee. As well, employers eligible for the CEWS will be entitled to receive a 100% refund for certain employer-paid contributions to Employment Insurance and the Canada Pension Plan, in a period where the employer is eligible for the CEWS.

Businesses that have experienced a reduction in revenue of 15% in the month of March and 30% in the months of April and May as the result of the COVID-19 pandemic.

The revenue reduction test can be applied to year-over-year monthly revenue in 2019, or the average of revenue for January and February 2020.

As a result of the significant 2019 spring flooding in Muskoka many businesses experienced considerable revenue loss in the spring of 2019. Using the low revenues of the spring of 2019 as the benchmark is expected to make it difficult for many businesses to access the CEWS.

Businesses that cannot meet these criteria may be eligible for a 10% wage subsidy. The concern is this secondary level of support is insufficient given the

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scope of revenue losses by businesses.

Canada Emergency Commercial Rent Assistance (CECRA)

The Government of Canada has announced its intent to introduce the CECRA for small businesses.

The program will seek to provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April, May and June, 2020.

To qualify for the CECRA for small businesses, the property owner must meet the following requirements:

- They own property that generates rental revenue from commercial property located in Canada.

- They are the property owner of the commercial property where the impacted small business tenants are located.

- They have a mortgage loan secured by the commercial property, occupied by one or more small business tenants.

- They have entered or will enter into a rent reduction agreement for the period of April, May, and June 2020, that will reduce impacted small business tenant’s rent by at least 75%.

- Their rent reduction

As this funding is recently announced, and awaiting enactment by the Federal and Provincial Governments, it is difficult to predict the timeline for funds.

The complexity of eligibility criteria also makes it difficult to forecast how many businesses will receive benefits.

It is proposed to be a 75% subsidy and eligible businesses will be required to pay the remaining 25% of the normal rent amount.

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agreement with impacted tenants includes a moratorium.

Impacted small business tenants are businesses, including non-profit and charitable organizations who:

- pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement);

- generate no more than $20M in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level); and

- have temporarily ceased operations (i.e. generating no revenues), or have experienced at least a 70% decline in pre-COVID-19 revenues.

Business Development Bank of Canada (BDC) - Working Capital Loan

Working Capital Loans up to $2M with flexible repayment terms such as principal postponements for qualifying businesses and reduced rates on new eligible loans.

Businesses of varying size are eligible.

While this program appears to have broad eligibility, early indications are that recipients are the "normal" BDC client-base, which tend to be larger scale and more established businesses.

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There are also early reports that approved loans have higher interest rates applied to them, which would create difficulties for small businesses in terms of ability to repay.

BDC - Co-Lending Program

BDC will partner with financial institutions to co-lend term loans to businesses for their operational cash flow requirements.

Eligible businesses may obtain differing maximum finance amounts based on business revenues, up to $6.5M, of which BDC would provide 80% of the total with the remaining 20% coming from the financial institution.

Small and Medium Sized Enterprises are eligible.

Community Futures Development Corporations (CFDCs) are not eligible financial institutions for this program. While this program appears to have broad eligibility, early indications are eligible businesses will be larger scale and more established.

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Appendix B

Breakdown of Muskoka Futures Loans by Municipality

Municipality % of Muskoka

Population

% of Total Funds Invested by Muskoka

Futures

% of Total Muskoka Futures Loans

Georgian Bay 4.1 1.0 1.8 Muskoka Lakes 10.9 10.0 7.9 Lake of Bays 5.2 11.7 10.5 Huntsville 32.8 24.1 29.8 Bracebridge 26.5 31.5 30.7 Gravenhurst 20.4 21.7 19.3 Total 100 100 100

Appendix C

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Bracebridge Chamber of Commerce 3 Ecclestone Dr., Unit 1, Bracebridge, ON P1L 1S4 Phone (705) 645-5231

chamber@bracebridgechamber.com www.bracebridgechamber.com

May 5, 2020

District Chair John Klinck

District of Muskoka

70 Pine Street Bracebridge ON P1L 1N3

cc: Michael Duben, CAO

Re: Requesting District financial relief for businesses and a District lead Recovery

Committee.

Dear Chair Klinck,

Further to the letter dated March 23, 2020, and the work that Norah and I have done in

conjunction with you, District staff and Muskoka Futures, I would like to reiterate that the Bracebridge Chamber of Commerce supports the following:

1. The creation of a District of Muskoka lead Recovery Committee

2. The Muskoka Business Recovery Fund

As we all are aware, the economic impacts and repercussions of COVID-19 are farther reaching

than anything we have seen in generations. As a result, collectively we need to be looking at

creative and impactful ways to support our businesses and therefore our communities, not just during COVID-19, but also as the recovery commences. We have all seen the data on the

challenges faced by businesses in these uncertain times, and we all know there are no certainties

in the coming months.

While governments of all levels have implemented substantial programs and policies to help

businesses, we know there will still be gaps in eligibility criteria and some businesses simply won’t qualify for support. For communities such as ours, whose economy is defined by truly small businesses, it is

anticipated by the Canadian Federation of Independent Business that somewhere between 20 and

25% may not be eligible for announced programs. It is therefore imperative that we act quickly to

provide additional, well thought out, support for these businesses.

With this in mind, the Bracebridge Chamber of Commerce has collaborated with Muskoka

Futures, and the Muskoka Lakes Chamber of Commerce, to bring the District of Muskoka in as a partner in providing financial support to businesses that face these eligibility gaps.

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Muskoka Futures has an excellent track record as an economic development lender, and has supported businesses in Muskoka for the last 32 years. They have the necessary governance,

accountability, processes and infrastructure in place to effectively manage the Muskoka Business

Recovery Fund in partnership with the District of Muskoka. We know we are asking the District to do something outside of their normal course of business,

and we recognize that the District is doing this in many other areas as well. However, we believe

the proposal provided, including the capabilities of our organization and the partnerships we maintain across Muskoka, can mitigate the risks and ultimately help many businesses across

Muskoka survive COVID-19 today, and be better positioned to thrive tomorrow. With regard to the District wide Recovery Committee, we believe there needs to be unification in

our advocacy voice, communication to businesses and the community, coordination and strategy.

This will allow our voice to be stronger when advocating for our unique needs, allow us to

combine resources, and create a Muskoka focused road map back to the “new norm” and into the future.

Thank you for your time, consideration and assistance in this matter.

Sincerely,

Brenda Rhodes, Executive Director, Bracebridge Chamber of Commerce

On behalf of the Bracebridge Chamber Board of Directors

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4 - 15 South Mary Lake Road, Port Sydney, Ontario, P0B 1L0 info@portsydneycoc.com

While our physical office is closed due to COVID-19, please contact us by email or regular mail. _____________________________________________________________________________________________

Mr. Michael Duben & Mr. John Klinck District of Muskoka 70 Pine Street Bracebridge, ON P1L 1N3

May 5, 2020

Greetings Mr. Duben & Mr. Klinck,

I am writing to express our Chamber’s support for the creation of a Muskoka Business Recovery Fund, a proposed initiative of the District of Muskoka and Muskoka Community Futures Development Corporation.

Businesses across Muskoka are facing serious challenges due to COVID-19 circumstances. Many businesses will require support in order to manage the current situation and to adapt to the post-pandemic economic landscape. Small businesses make up a significant component of our local economy in Muskoka, yet many small businesses may not be eligible for Federal support programs and may not survive without another avenue of support. The proposed Muskoka Business Recovery Fund would provide much needed stability for our local business community.

Thank you to all those involved in the creation and management of this proposed Fund.

Sincerely,

Derek Watson-Brown President, Port Sydney/Utterson & Area Chamber of Commerce

CC: Board of Directors, Port Sydney/Utterson & Area Chamber of Commerce, Mr. David Brushey, Muskoka Community Futures Development Corporation, Ms. Tina Kilbourne, District Municipality of Muskoka

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May 5, 2020 John Klinck Chair District of Muskoka 70 Pine Street Bracebridge, ON P1L 1N3 John, As we all are aware, the economic impacts and repercussions of COVID-19 are farther reaching than anything we have seen in generations. As a result, collectively we need to be looking at creative and impactful ways to support our businesses and therefore our communities, not just during COVID-19, but also as the recovery commences. We have all seen the data on the challenges faced by businesses in these uncertain times, and we all know there are no certainties in the coming months. While governments of all levels have implemented substantial programs and policies to help businesses, we know there will still be gaps in eligibility criteria and some businesses simply won’t qualify for support. For communities such as ours, whose economy is defined by truly small businesses, it is anticipated by the Canadian Federation of Independent Business that somewhere between 20 and 25% may not be eligible for announced programs. It is therefore imperative that we act quickly to provide additional, well thought out, support for these businesses. Muskoka Futures is anxiously awaiting confirmation of details from the Federal Government on previously announced new loan funds to support businesses through COVID-19. These funds will further enable us to strategically focus on providing businesses with resources to not only help pay today’s bills, but also to help them develop and implement new ways to do business in

what will be a “new normal”. What is clear however is that these new funds will not be sufficient on their own to address all the potential needs in Muskoka. With this in mind, Muskoka Futures has partnered with our local Chambers of Commerce and in particular with leadership from the Muskoka Lakes and Bracebridge Chambers, to propose the Muskoka Business Recovery Fund. The intent of this proposal is to bring the District of

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Muskoka Community Futures Development Corporation 345 Ecclestone Drive, Bracebridge, ON, P1L 1R1 ● www.muskokafutures.ca

(705) 646-9511 ● david@muskokafutures.ca

Muskoka in as a partner in providing financial support to businesses that face these eligibility gaps. Muskoka Futures has an excellent track record as an economic development lender, and has supported businesses in Muskoka for the last 32 years. We have the necessary governance, accountability, processes and infrastructure in place to effectively manage the Muskoka Business Recovery Fund in partnership with the District of Muskoka. We know we are asking the District to do something outside their normal course of business, and we recognize that the District is doing this in many other areas as well. However, we believe the proposal provided, including the capabilities of our organization and the partnerships we maintain across Muskoka, can mitigate the risks and ultimately help many businesses across Muskoka survive COVID-19 today and be better positioned to thrive tomorrow. On behalf of the Board of Directors of Muskoka Futures, I offer our commitment to contributing to, and administering, the Muskoka Business Recovery Fund, and I remain hopeful that this proposed fund can be a key element in Muskoka’s overall recovery. Sincerely,

David Brushey Executive Director (705) 706-3384

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Box 536 3181 Muskoka Road 169 Bala ON P0C 1A0 705 762-5663 Instagram & Twitter.com/MuskokaLakesCC Facebook.com/MuskokaLakesChamber www.MuskokaLakesChamber.ca

May 2, 2020

District of Muskoka 70 Pine Street Bracebridge, ON P1L 1N3 Attn: John Klinck, Chair

Re: Expressing support for a District Business Recovery Fund and Recovery Task Force

Dear Chair Klinck,

Please accept this letter of support for a District-wide Business Recovery Fund that our Chamber first brought to your attention as a growing need in March. We also want to pledge our support for a District facilitated Muskoka Recovery Task Force.

We continue to survey our businesses. While some are faring well during COVID-19, many are hurting, and still others are gripped with uncertainty as they haven’t even opened yet. Surveys indicate that over half of our businesses have reduced staff, over 83% have seen a decline in business, 66% did not think they could go another 60 days without being in financial crisis, 5% stated they were already in crisis, and over 34% simply did not know as they were seasonal and had not yet opened.

Many have contacted the Chamber directly to say they do not fit with present federal business aid programs. Together with our other Chamber colleagues, we are surveying businesses across Muskoka to further identify gaps and to see just how many businesses find themselves in a similar situation.

Chair, the need is great, and we believe that Muskoka Futures is uniquely positioned to be able to provide fast, effective loan service to our struggling companies. While we are focused on the present need, a Business Recovery Fund is an excellet tool to have in our collective District toolbox should we face future crises. It could be something that could generate a small income to go back into an ongoing fund so we would be better prepared to support our economy should anything like this happen again.

Our Chamber thanks you for your careful thought and consideration as we move through this pandemic together. Please contact me directly if you have any questions.

Sincerely,

Norah Fountain Executive Director, Muskoka Lakes Chamber of Commerce On behalf of the Board of Directors and Membership of the Chamber

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Parry Sound Muskoka Community Network 100 Muskoka Road South Unit D, P.O. Box 524

Gravenhurst, Ontario P1P 1T8 W: www.pmcn.ca P: 705.646.9044

May 1, 2010

Michael Duben

CAO

District of Muskoka Office

70 Pine Street

Bracebridge, ON P1L 1N3

Dear Michael

Letter of Support

Parry Sound Community Network (PMCN) supports the initiative of Muskoka Futures together with

Chambers of Commerce in approaching the District of Muskoka to form an economic recovery task force

and a key opportunity is for the task force is to develop a funding mechanism to support business recovery

across the district.

The District has the opportunity to leverage its funding in three ways:

1. Leveraging both the funding and expertise at Muskoka Futures to administer funds for District.

2. Leveraging the current PMCN Business Technology Improvement Fund (BTIF) grant program. The

challenge for potential BTIF applicants is the program was designed pre COVID 19 and therefore

many of the businesses that were planning to apply have advised us they can no longer afford to

apply. As these BTIF grants do not have any stacking limit from other forms of government, the

District is in a unique position to leverage its funding to help support more businesses to apply for

BTIF grants.

3. Leveraging broadband. PMCN is also advocating for special funding for low cost high impact

broadband projects, and if successful, these projects may require support from other levels of

government. If so, the District can leverage its funding to help the community including many

businesses that are now home based.

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the

beginning.” Winston Churchill

Sincerely

Stuart Morley

Executive Director

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45 Lone Pine Road, Port Severn, Ontario L0K 1S0

705-756-4863 info@segbay.ca

May 6th, 2020 District Chair John Klinck District of Muskoka 70 Pine Street Bracebridge ON P1L 1N3 Re: Requesting District Financial Relief for Businesses Dear District Chair Klinck,

We would like to thank the District of Muskoka for taking the time to consider our request during these difficult times with COVID-19. The Southeast Georgian Bay Chamber of Commerce is united with our neighbouring Chambers and BIAs, to appeal for a Muskoka Emergency Relief Fund for Businesses.

Although the Provincial and Federal governments are also working to make aid available to businesses and individuals feeling the pain of COVID-19, not all of our local business are eligible or would receive sufficient funding to allow them to remain in business. A quick, unofficial survey found many of our members to be facing difficult times, significant loss of income and many facing possible closures. Today, we are writing to request the District consider bridge financing support. District assistance would help businesses struggling now with cash flow and the ability to keep up with their payables in the wake of COVID-19. This could be delivered through the creation of a District of Muskoka-led Recovery Committee. We can be available at a time that is convenient for you to discuss options via an online meeting. Thank you for your time, consideration and assistance in this matter. Sincerely,

Negin Company President Southeast Georgian Bay Chamber of Commerce

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