My mother said her employer says that they can let her go without paying severance because they have a very small payroll in Ontario. Is that true?

That is absolutely not true. The size of the payroll is not relevant to her full entitlements. I discussed this issue on the radio today. Your mother is owed full severance. To see how much she is owed, use the Severance Calculator and then it is important that you or she give me a call: www.severancepaycalculator.com