By Norman DeBono, The London Free Press
Small business in the London region is looking to Ottawa for a lifeline.
A provincial program that allows laid-off workers earning employment insurance to start their own business will turn to the federal government now that the program has been chopped.
The Elgin Community Futures Development Corp. will meet with MP Joe Preston (PC — Elgin-Middlesex-London) Friday to try to save the Ontario Self Employment Benefit program, said Kevin Jackson, manager of the corporation.
“If the ministry does not want this, we will see if the federal government will work with us,” Jackson said. “We are on a fact-finding mission now,” he said of his meeting with Preston and area MPP Jeff Yurek, (PC — Elgin-Middlesex-London).
The program, which the Ministry of Training, Colleges and Universities announced will end in March 2016, offers those on employment insurance 42 weeks of business training, coaching and support as they start their own business.
It has had a stunning success rate in Elgin, hit hard by the closing of the St. Thomas Ford assembly plant as well as Sterling Truck in recent years.
“This will have a huge impact here in St. Thomas and Elgin,” Jackson said of the program’s demise.
“We have to find out what is out there because we don’t believe we will change the province’s mind. We have to find out what we can do to resurrect it and try to help our clients.”
In Oxford County, it’s much the same story, said Al Simm, general manager of the Oxford Small Business Support Centre.
Its self-employment support program has graduated five businesses in recent years, costing $100,000 a year, and 64% have remained open after five years, Simm said.
“We will feel it, we will feel the cut. Individuals may not have the opportunity to get training and support,” he said.
The issue was raised in the legislature Thursday, where London West MPP Peggy Sattler questioned Premier Kathleen Wynne.
“Premier, how can your government justify cancelling a program that has helped hundreds of unemployed Londoners to start small businesses and create jobs, and has been rigorously evaluated as successful?” asked Sattler.
Wynne referred the matter to the Ministry of Training, Colleges and Universities. The ministry has said the funding will be redistributed to other agencies in economic development as well as a job grant program.
One of the biggest challenges entrepreneurs face is ensuring cash flow during the startup and this program solved that problem, Simm said.
“It will change how some will think about the risk. If you’re worried about living expenses, you won’t take a chance,” Simm said.
Steve Pellarin, director of the London Small Business Centre, cheered news there will be talks with Preston, saying it was a federal program before the province took it over.
“A gap has been created in the community and it needs a collective solution,” Pellarin said.
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ONTARIO SELF EMPLOYMENT BENEFIT PROGRAM
- Cut by the Ontario government as of March 2016.
- Offered employment insurance earners 42 weeks of benefits as they get training, coaching and support to start their own business.
- In Elgin County, started 50 businesses a year, 70% still in business after five years. Annual cost: $200,000
- In Oxford County, five businesses a year, 64% still open after five years. Annual cost: $100,000
- In London, starts 100 businesses a year, generating $2.6 million a year in sales in the first year. Annual cost: $350,000
- Across Ontario, helped almost 2,500 last year.