The remains of hotels in Jasper, Alta., on July 26.AMBER BRACKEN/The Canadian Press
Alberta business owners facing losses from wildfire damage can get help navigating the crisis to ensure they can limit the drain on cash flows and support their employees, experts say.
To mitigate the damage and pave the way for future rebuilding, business owners need to be resourceful in co-operating with insurance providers, seeking help from the Canada Revenue Agency (CRA) and contacting their banks for accommodation.
Anne Marie Thomas, director of consumer and industry relations at the Insurance Bureau of Canada, was in Nova Scotia last year helping insurance companies when the province was hit by its largest wildfire in the past century.
“You just see people at the very lowest point in their lives. It’s terrible for the people. They lost everything,” she said.
This year’s Alberta wildfire has destroyed 30 per cent of Jasper and caused estimated damage of $700-million, making it one of the most expensive fires in recent years.
To get the right help immediately, Ms. Thomas advises each business owner to contact their insurance company first and provide as much information as they can, whether it is a list of destroyed properties or any receipts for the damaged items, so the insurer can open a claim and send an adjuster to assess the damage.
Just like home insurance, all business insurance in Canada covers damage caused by wildfires, she said. The majority of businesses may have also purchased business interruption insurance that replaces business income lost in a disaster such as a wildfire, covering wages, rent and other expenses.
While some Jasper business owners among the 10,000 evacuated residents may not know the extent of damage to their properties yet, insurance providers should be able to start the groundwork and even assess the damage by sending a drone or reaching out to emergency teams, she added.
After the damage is assessed, an insurance adjuster will communicate with trade workers to repair a property if it is damaged or destroyed. If the business owner is a renter, they will be paid for damaged property in a building at replacement cost or cash value, depending on the insurance policy.
“The worst part about this is that it just takes time to get a claim settled and to get people back to where they were before the incident occurred. It’s unfortunate that we have to be patient,” Ms. Thomas said.
Beyond making insurance claims, business owners affected by wildfires should also apply for tax remittance relief from the CRA, which can waive penalties and interest costs if businesses can’t pay their taxes because of extraordinary events, said Jocelyn Rhindress, a senior manager of business resources at the Canadian Federation of Independent Businesses (CFIB).
The CRA provided special tax relief to communities affected by wildfires in British Columbia and the Northwest Territories in August, 2023, removing penalties and interest for late filing of all T2 and GST/HST returns and waiving interest charged on instalments and balances.
While the same relief hasn’t been announced for Jasper, Ms. Rhindress said the CFIB will recommend governments offer some tax-relief measures, such as deferring federal tax payments, reducing property taxes and providing business continuity grants, to support businesses until they get back on their feet.
Daryl Ching, the founder of Vistance Capital Advisory, also encourages business owners to contact their banks to ask for deferrals if they have a term loan, line of credit or personal mortgage.
His firm provides accounting, capital raising and financial management services to small and medium-sized companies. During the COVID-19 pandemic, Mr. Ching found banks were sympathetic to these requests, since they didn’t want to see businesses go into bankruptcy.
“The recurring theme is defer, defer, defer, stop the cash bleeds. Make sure that you’re not paying money out of your bank account during a period where there’s no revenue coming in,” Mr. Ching said.
He advised businesses to go through their monthly expenses line by line to stop cash outflow, including suspending or cancelling purchased services, if possible, and furloughing as many employees as possible.
Employers should also provide records of employment to staff so they can apply for employment insurance, which pays up to 55 per cent of their average insurable weekly earnings. Eligible employees need 420 to 700 hours of insurable employment in the qualifying period.
As important as reducing expenditures, Mr. Ching said businesses should look into ways to generate alternative or temporary revenue, such as offering virtual services.
Above all, Mr. Ching’s last piece of advice is to be transparent.
While business owners may find themselves in panic as they can’t make payments, Mr. Ching emphasized it’s important to not hide away from people but be pro-active and keep banks and vendors in the loop.
“If you’ve been talking to your vendors, your customers and you’ve been transparent through the whole process, it’s a much easier transition coming back,” he said. “Because as soon as your office has everything prepared, you’re back at work and you’re back in full force.”