Prime Minister Justin Trudeau addresses Canadians on the COVID-19 pandemic from Rideau Cottage in Ottawa on Friday, April 17, 2020. (File photo by THE CANADIAN PRESS)

PM to announce extension of wage subsidy, financial aid for medical researchers

Wage subsidy initially slated to run until June 6

OTTAWA — Prime Minister Justin Trudeau is expected to announce today an extension to the federal government’s 75 per cent emergency wage subsidy — just as businesses across the country are taking the first cautious steps towards reopening after a two-month, pandemic-induced shutdown.

He is also expected to announce significant financial support for thousands of medical researchers whose work is unrelated to the COVID-19 crisis.

The $73-billion wage subsidy program was initially slated to run until June 6.

Trudeau last week said it would be extended and today he’ll reveal for how long. The extension is expected to be for at least an extra month.

Under the program, the federal government is currently picking up the tab for 75 per cent of an eligible company’s payroll — up to a maximum of $847 per week per employee — from March 15 to June 6.

Eligible companies are those that saw revenues drop by 15 per cent in March or 30 per cent in April and May.

The government has billed the subsidy as the largest economic program since the Second World War, with the cost pegged at $73 billion.

But so far, it has paid out only $3.4 billion for some 1.7 million workers.

However, the government sees the wage subsidy as crucial to the country’s economic recovery and is hoping that more companies will take advantage of it as they rehire employees laid off when the country shut down in mid-March to prevent the spread of COVID-19.

That, in turn, would decrease reliance on the $35-billion Canada Emergency Response Benefit, which is paying $2,000 a month to Canadians who have been thrown out of work or seen their incomes nosedive due to the pandemic.

More than 7.5 million Canadians have received CERB payments so far — almost double the anticipated number of recipients.

The government is widely expected to eventually phase out the CERB to prevent it becoming a disincentive to work as the economy restarts.

Trudeau is also expected today to announce financial support to prevent the threatened layoffs of up to 15,000 researchers at hospital-based research institutes who, due to a technicality, don’t qualify for the wage subsidy.

Research unrelated to the deadly coronavirus that causes COVID-19 was halted in mid-March, including clinical trials and research into cancer, stroke and other diseases. Hospital-based institutes have warned that much of the funding they rely on to pay for that research — including charitable donations, contributions from foundations and clinical trial contracts with pharmaceutical companies — has evaporated.

Without financial support from the government, they’ve warned that they’ll have to begin laying off thousands of researchers by the end of this week.

Trudeau promised earlier this week to personally look into the matter.

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

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