Destroyed Lytton businesses face uncertain future as Ottawa refuses to forgive COVID loans

It’s a small amount to forgive, say business owners, considering the town burned down in 2021

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Businesses in Lytton that already face huge, escalating costs to rebuild after a fire destroyed the town in 2021 have been rejected by Ottawa after they asked the federal government to forgive loans that helped them make it through the COVID pandemic.

The Trudeau government’s refusal of a request to forgive the loans, due at the end of 2023, is one of the factors business owners must weigh in deciding to rebuild.

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Another is the significant rebuilding costs, often much higher than the insurance replacement for which they are eligible, the business owners say.

For Meghan Fandrich, who had slowly built up a café and art shop on the main street in Lytton, the costs are simply too much.

She has decided not to rebuild the Klowa Art Café.

Fandrich says she doesn’t know how she will ever repay a $60,000 federal pandemic loan because just as she expected to be profitable in the summer of 2021, her shop burned down with the rest of the town.

And now she faces an estimated $500,000-plus rebuild cost, much higher than the $250,000 insurance she carried.

The costs of rebuilding in Lytton have gone up as costs have increased everywhere, she said. But Lytton also faces additional rebuilding costs because, for example, there is no longer accommodation for workers in town.

“There is no way I can rebuild. … I am still paying two mortgages on the building. I am struggling week to week,” said Fandrich, a single mother.

Even when her insurance claim is resolved, she would be lucky to repay the mortgages, she noted.

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Fandrich pointed out that while workers were eligible for employment benefits following the fire, as a business owner who made no profit during the pandemic, there were no benefits for which she could apply.

Started as a yarn shop, Fandrich had built up her business by becoming an outlet for local artists, then added an espresso machine and sold baked goods.

She had made it through the COVID pandemic with the Canada emergency account benefits loan and using her line of credit to keep almost all her employees working, who were young Nlaka’pamux women.

Klowa Art Cafe before the 2021 wildfire that virtually destroyed the entire village. Photo by Roarke Charlie /jpg

Other businesses face similar challenges in deciding to rebuild, says her father Bernie Fandrich, the vice-president of the Lytton and District Chamber of Commerce.

He says there were about 15 businesses in the town’s core, about 10 of which would like to rebuild, including a grocery store and hotel.

Bernie Fandrich said he estimates that around 10 businesses used the federal pandemic loans, which amount to about $500,000 to $600,000. He said he believes it is a small amount to forgive, considering the catastrophe the town experienced when it burned down. He said the chamber helped businesses write letters to Ottawa.

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If you don’t have any income, and are not likely to in the foreseeable future, if at all, how are you supposed to repay the loan, he asked.

Meghan Fandrich at the at the ruins of Klowa Art Cafe in Lytton last week. Photo by Helen Porter /jpg

Fandrich said he believes the federal government should consider the unique circumstances in Lytton.

He added that one of the problems in starting to rebuild has been huge delays created by a need to check each site for archeological artifacts and removal of contaminated soils.

Bernie said he is not aware of any business that has a building permit that would allow them to begin construction, two years after the disaster.

The federal Conservative opposition had brought a petition to parliament this year seeking that pandemic loans for Lytton businesses be forgiven.

The petition had noted that due to the magnitude of the disaster and “consequential bureaucratic delays,” businesses had been unable to rebuild for nearly two years.

“Forgiveness of the CEBA loan for Lytton businesses would help to empower economic development and restore this destroyed community,” stated the Conservative petition, backed by B.C. Conservative MPs such as Brad Vis in Abbotsford.

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Lytton Village on fire on June 30, 2021.
Lytton Village on fire on June 30, 2021. Photo by Karen Dunstan /PNG

In a written response this summer, Finance Minister Chrystia Freeland noted that after the 2023 deadline, there is a repayment period of up to two years at an interest rate of five per cent. The loans are fully due by Dec. 31, 2025, she noted.

Freeland also pointed to $7.2. million being provided by Ottawa to create a business restart program in Lytton to help small- and medium-sized businesses re-establish in the community.

Federal finance department officials had no immediate response to Postmedia questions on Tuesday.

Bernie, the vice-president of the Lytton Chamber of Commerce, said there are still no details for the business restart program.

The fire hit Lytton on June 30 in the midst of an extreme heat wave and destroyed 151 structures in the Village of Lytton and adjacent Lytton First Nation.

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