Ontario breweries ‘unfairly’ denied $10,000 small business grants from province, business owners say

A group of Ontario breweries say their applications for a $10,000 relief grant were “unfairly” rejected by the province days before Monday’s deadline to appeal the decision.

The Star spoke to numerous brewery operators who received rejection letters last Thursday and said they spent the weekend scrambling to appeal the decision before midnight on Monday.

The businesses were denied from accessing the Ontario Small Business Relief Grant, a one-time payment of $10,000 to eligible small businesses that were required to close indoor operations during the Omicron wave of COVID-19 in January.

The grant program has given out almost $158 million to more than 15,800 small businesses and can take up to 20 business days to review and process an application, according to the ministry of small business. Applications closed March 11.

According to rejection notices viewed by the Star, these businesses did not meet the criteria for an “eligible business type” under the grant’s requirements, defined as those required to close indoor operations during the Omicron wave, have 99 or fewer employees, and experienced a revenue decline of at least 20 per cent.

The province’s guide to the relief grant lists several eligible types of businesses — including restaurants and bars, casinos, cinemas, museums, gyms and more — but does not list breweries.

But business owner Ryan Leaman said his Guelph-based brewery, Broken Rail Brewing, should qualify because it functions partially as a bar that closed during the Omicron wave.

“We all have bars inside the breweries that serve customers. So we had to shut down just like any other restaurant or bar,” said Leaman.

In an appeal to the province filed Monday, Milton-based brewery operator Steven Pilotto wrote that his Third Moon Brewing brews alcohol and sells it to patrons for on-site consumption in its taproom.

“We had to shut down our bar and dump out thousands of dollars worth of beer in kegs when the shutdown was announced. Therefore we should be considered as a bar in terms of this grant,” Pilotto wrote in an email viewed by the Star.

Still, by Monday afternoon, the province’s “Ontario Small Business Relief Grant Team” had replied to Pilott’s appeal with another rejection.

“The documentation and business description did not demonstrate that your business is primarily involved in an eligible business activity that was required to close indoor operations,” the province said in an emailed reply to Pilotto.

“According to the information provided, your business appears to operate as a brewery without a restaurant.”

Sean McVeigh, who operates the Kanata-based Small Pony Barrel Works brewery, said he received the rejection notice on Thursday and was not able to get instructions from the ministry on how to appeal the decision.

“I’m totally at a loss as to how to handle this. I already told them we function as a bar as well as a brewery. Should I just tell them the same thing again?” he said.

Adding to the confusion is that some breweries with mixed indoor operations have successfully petitioned the province to overturn the rejections they received.

Erin Broadfoot, owner of Little Beasts Brewing in Whitby, received a rejection notice for her grant application earlier in March but had it overturned when she explained to the province that her brewery also operates as a bar.

The rejection notice she received on March 16 said that Broadfoot’s business was ineligible because it “is a brewery/winery without a restaurant.”

“After some persistence I was able to get them to overturn the decision and I got the grant,” Broadfoot said.

Julie Kwiecinski, a director at the Canadian Federation of Independent Business, said the lobbying group has heard from several members spanning multiple industries that have struggled to access Ontario’s grant programs.

“I’d love to hear more of an explanation from the government on this. We still don’t really know why some of these businesses, that have been struggling to recoup their losses for months now, are not receiving help,” said Kwiecinski.

“There’s an election coming up, so these issues have to be resolved soon.”

In an email to the Star, government spokesperson Corey Michaels declined to speak to the specifics of the brewers’ applications but encouraged them “to contact the ministry at the email address provided to them for additional information.”

“Our goal is to ensure all eligible businesses receive the grant, and as a result some applicants were asked to contact the ministry to initiate a further review of their application. The ministry will work with these businesses and inform them of any outstanding documentation or information required to establish their eligibility,” Michaels said.

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