Creating an Inclusive Economy: BMO’s Mike Bonner on Pandemic Progress
The pandemic has been tough on everyone, and while some businesses will recover quickly, others face a steeper climb and the most vulnerable will need targeted attention because the impacts of the pandemic have been inequitable. What’s been clear these last two years is the central role banks play during times of crisis, especially in supporting Canadian businesses regain momentum and resume progress. At BMO, we’re focused on helping businesses recover with an approach that’s both diverse and inclusive.
What are the issues facing Canadian businesses?
While the experience has varied by industry, businesses across the country have been in a fight for survival. They continue to bear the brunt of the pandemic from an economic perspective, with restaurant closures, travel restrictions and limited close-contact services across much of the country. We’ve seen many shut down during the pandemic, and those that were lucky found ways to pivot their offerings to create cash flow to keep the lights on.
Still, according to a BMO report, employment at companies with fewer than 100 workers dropped by more than 20 per cent, and an unprecedented 387,000 Canadian businesses closed during the first six months of 2020. Fortunately, with the economy reopening these past few months, the unemployment rate improved from 13 per cent to six per cent, and we expect it to further improve to five per cent in late 2022. We haven’t seen a five per cent unemployment rate in the past 50 years.
However, with the profound uncertainty of the pandemic and the new variants at play, we don’t know the extent to which this new wave will delay or defer growth so business owners need convenient and accessible banking services, which is where BMO comes in. With digital banking, we want to offer financing, credit products, and loans more conveniently, to save our customers time. We also want to personalize our services so we can spend more time providing resources and expertise to help Canadian businesses make real financial progress in achieving their long-term goals. Businesses are the backbone of our economy, so it is incredibly important for them to have a strong recovery coming out of the pandemic.
How has the pandemic impacted businesses owned by people of colour?
COVID-19 exacerbated the systemic barriers already faced by people of colour in this country who are struggling to gain access to financing, advice and resources to support their financial growth and create economic opportunities.
While Canada has made progress in advancing equality, there’s still more work to do to address the systemic racism that has held so many back from success. BMO has long believed in sharing the gains of social and economic well-being, and that belief has only intensified during the pandemic.
The social unrest sparked by Black Lives Matter protests in 2020 inspired the next step in BMO’s equity journey: an initiative called Zero Barriers to Inclusion, which sets out concrete actions to address racial inequality and create a more inclusive economy for our employees, customers and the communities we serve.
What support is available to Black-led businesses right now?
BMO is tailoring its products and services to help businesses regain momentum. In February, in line with Black History Month, BMO is launching a new program called Business Within Reach: BMO for Black Entrepreneurs, committing $100 million in loans to pave the way to a stronger and more inclusive Canadian economy.
Using specialized lending criteria, Black-led businesses will gain better access to loans of up to $250,000 to operate their businesses. BMO has also developed valuable resources including practical advice, tips and tools to help inform better business decisions. The program also offers coaching, mentoring and networking opportunities to help businesses grow.
Business within Reach is an important step forward in building the foundation for long-term, lasting change and making a real difference in the lives of Black entrepreneurs across the country for years to come. We’re proud to be part of that change.
The program is part of a larger BMO initiative for advancing community-based programs for underserved communities across Canada, which will be announced later in February. Learn more: bmo.com/blackbusiness