Federal COVID-19 wage subsidy to last through summer, Trudeau says

Federal COVID-19 wage subsidy to last through summer, Trudeau says

OTTAWA — A federal wage subsidy for employees in businesses hit hard by COVID-19 will last at least through the summer and the federal government is asking companies to rehire laid off staff — many of whom have received aid from an emergency benefit that has gone over budget.

The $73-billion Canada Emergency Wage Subsidy was set to expire in the first week of June, only a few weeks after the first payments rolled out and with only a small fraction of its budget spent.

Subsidies will now be available through to the end of August, though the legislation that created the subsidy gave the government the authority to extend qualifying periods for help to the end of September.

Take-up for the program has been below federal expectations, with less than $4 billion in benefits to date for 1.7 million workers.

Speaking outside his Ottawa residence, Prime Minister Justin Trudeau said employers now have more runway and should have confidence to resume operations slowly if they have to.

Trudeau also said the government will make adjustments to the program, including changes to the threshold for how much qualifying companies’ revenues must have declined, to ensure employers can continue getting help as business kicks back up.

“As the economy reopens, there is a danger of unintended consequences,” Trudeau said.

“If part of the eligibility criteria for getting the wage subsidy is a decrease of 30 per cent of your business, we wouldn’t want people who are getting back their business going to feel like they have to hold back on their growth, on their expansion, on their rehiring in order to be able to continue benefiting from the wage subsidy.”

Eligibility is also being expanded to more organizations to include tax-exempt Indigenous-owned corporations or partnerships, amateur athletic associations registered journalism organizations, and private colleges and training schools.

Dan Kelly, president of the Canadian Federation of Independent Business, said the simplified wage subsidy would be a boost for small businesses and a relief for seasonal industries like tourism, where operators are looking ahead to a soft summer.

He called for changes to other federal programs that haven’t reached many small businesses.

“Small-business owners are eager to get back to business and get off the government subsidies they have had to rely on through the COVID-19 pandemic. Unfortunately, we are not there yet,” he said in a statement.

The Canadian Chamber of Commerce said many companies have closed or are not operating at full capacity, which has limited applications for the funding, while others simply haven’t qualified. The organization said the modified wage subsidy should be an ”important tool” for eligible businesses “to help in the process of resuming and stepping up operations.”

Finance Minister Bill Morneau was unable to say Friday how much the extension would cost. He said much of that will be determined by the changes to be debated with employer groups and labour organizations.

The most recent federal figures on the program show payouts of around $3.36 billion to 123,642 companies.

Morneau said the design of the expanded wage subsidy will take into account its effect on the CERB, to have “the right incentives and right support” for workers and businesses “so they can get back to work appropriately.”

The subsidy covers 75 per cent of wages for employers that have seen sharp declines in revenue since the novel coronavirus pandemic hit Canada hard in March, up to $847 per worker, per week.

The government expected the subsidy would pull workers onto payrolls and away from the $2,000-a-month emergency benefit for employees who have either lost their jobs or seen their incomes drop below $1,000 a month.

Federal figures posted Friday morning show just under eight million people have applied for that Canada Emergency Response Benefit, receiving just under $35.9 billion between them. The program had a budget of $35 billion, and the Liberals have faced calls to extend a program developed quickly in late March.

“Simple designs were needed to get them up and running in a hurry,” CIBC chief economist Avery Shenfeld wrote in a note about the emergency aid. “But just as a patient has to be carefully weaned off pain medication, policy makers need to adjust their prescriptions as we take small steps towards economic health.”

The federal government has promised $151.7 billion in direct aid to date, including money for a new student benefit and funding for a retooled Canada Summer Jobs program, both of which opened for applications on Friday.

The government also announced Friday payroll support to universities and health-research institutes through a $450-million fund to match the help offered through the emergency wage subsidy program.

This report by The Canadian Press was first published May 15, 2020.

Jordan Press, The Canadian Press

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta has 3,651 active cases of COVID-19. (File photo)
432 new COVID cases sets another record Friday

Central zone holds steady at 126 active cases

The future site of the Rimbey Travel Centre. Web photo
New Rimbey development aims to capitalize on highway traffic

Phase I of the Rimbey Travel Centre would be along Hwy. 20, if approved

"We are looking seriously at the spread and determining what our next steps should be," says Alberta’s chief medical officer of health, Dr. Deena Hinshaw, as the daily number of COVID-19 cases continues to climb.
427 new COVID cases is highest in Alberta ever

Central zone has 126 active cases of COVID-19

soup
Rimbey FCSS to introduce the Cultural Community Kitchen

The Cultural Community Kitchen sessions will be held at the Rimbey Co-op

robbery
UPDATE: Shooting suspect arrested by Wetaskiwin/Camrose RCMP

Rimbey RCMP had responded to a complaint of an armed robbery at the Bluffton City General Store

B.C. Liberal leader Andrew Wilkinson, B.C. NDP leader John Horgan and B.C. Greens leader Sonia Furstenau. (Black Press Media)
VIDEO: One day until B.C. voters go to the polls in snap election defined by pandemic

NDP Leader John Horgan’s decision to call an election comes more than a year ahead of schedule and during a pandemic

Ryen Williams, 11, with a lost miniature horse at JJ Collett Oct. 23. Photo by Don Williams
UPDATE: Owners found

Father and son found him while out for a walk at JJ Collett

A Le Chateau retail store is shown in Montreal on Wednesday July 13, 2016. Le Chateau Inc. says it is seeking court protection from creditors under the Companies’ Creditors Arrangement Act to allow it to liquidate its assets and wind down its operations.THE CANADIAN PRESS/Ryan Remiorz
Clothing retailer Le Chateau plans to close its doors, files for CCAA protection

Le Chateau said it intends to remain fully operational as it liquidates its 123 stores

U.S. border officers at the Peace Arch crossing arrested two men on California warrants this week. (File photo)
Ottawa predicts system delays, backlogs unless court extends life of refugee pact

Canada and the United States recognize each other as safe places to seek protection

Conservative member of Parliament Michelle Rempel Garner, left to right, Conservative Leader Erin O’Toole and Conservative Deputy Leader Candice Bergen arrive to hold a press conference in Ottawa on Thursday, Oct. 22, 2020. THE CANADIAN PRESS/Sean Kilpatrick
No-confidence showdown over sweeping Tory motion on government handling of pandemic

The Conservative motion is to be put to a vote Monday and has the support of both the Bloc Québécois and NDP

From l-r., first lady Melania Trump, President Donald Trump, moderator Kristen Welker of NBC News, Democratic presidential candidate former Vice President Joe Biden and his wife Jill Biden on stage at the conclusion of the second and final presidential debate Thursday, Oct. 22, 2020, at Belmont University in Nashville, Tenn. (AP Photo/Patrick Semansky)
Trump, Biden fight over the raging virus, climate and race

Republican president declared the virus, which killed more than 1,000 Americans on Thursday alone, will “go away.”

JJ Collett Natural Area Foundation held its AGM on Oct. 19 at the Ponoka Legion. (Emily Jaycox/Ponoka News)
De-listing Alberta parks creates ‘risk’ for coal mining: CPAWS

Canadian Parks and Wilderness Society speaks at JJ Collett AGM

COVID-19. (Image courtesy CDC)
Temporary COVID-19 testing sites coming to Wetaskiwin and Ponoka

The Wetaskiwin location will open Oct. 23, 2020 and the Ponoka location will open Oct. 29.

ACC President and CEO Ken Kobly spoke to Ponoka Chamber of Commerce members over Zoom on Oct. 20. (Image: screenshot)
Alberta chambers are ‘411’ to members, government: ACC president

Changes to government supports, second wave and snap election

Most Read