Business generally supports changes to wage subsidy rules unveiled by Trudeau

Business generally supports changes to wage subsidy rules unveiled by Trudeau

Business groups applauded the federal government’s decision to loosen requirements for its wage subsidy program for employers hit by COVID-19, even as they emphasized the need for money to quickly flow to struggling Canadian enterprises.

After speaking with stakeholders and workers, Prime Minister Justin Trudeau said his government will refine some of the emergency aid programs announced in recent days and weeks.

“We want to make these emergency measures as inclusive as we can so we’re listening and making adjustments along the way,” he said Wednesday.

Rather than having to show a 30-per-cent decline in revenues, businesses can instead show a 15-per-cent decline in March, and can compare their revenues to previous months rather than the previous year, Trudeau announced.

Charities and non-profits can also choose whether to include revenues from governments, such as grants, in their calculations when they apply.

Businesses need to survive and workers need to get paid if the economy is to “come roaring back after this crisis,” Trudeau said.

Employment Minister Carla Qualtrough said 4.26 million people, or nearly one quarter of the country’s workforce, has applied for benefits since March 15.

The changes from Ottawa should help many of the country’s companies to retain or recall thousands of employees, several business groups say.

Increasing the flexibility makes sense since many companies didn’t experience the impact of the pandemic until later in March, said Brian Kingston, vice-president of fiscal and international for the Business Council of Canada.

He said the government is designing costly programs quickly, comparing it to building an airplane as it’s flying.

“There is no playbook here. And the key is that the government is showing flexibility in terms of how they design this program to make sure it’s of maximum use to the most companies possible,” he said in an interview.

The changes are reasonable as long as the money can get to companies who are trying to hang on, added Dennis Darby, president of Canadian Manufacturers and Exporters.

“We really hope that no company has to end up going out of business because of the COVID-19. Hopefully, this money will flow sooner rather than later,” he said.

Even before the changes were announced, Air Canada said it would take advantage of the program to rehire 16,500 laid-off workers, although the vast majority will remain at home amid the collapse of global travel triggered by the COVID-19 pandemic.

Flair Airlines and Transat AT Inc., other companies in the hard-hit travel sector, said it they would use the program to recall all their employees.

While thousands of companies will likely benefit from the change, it doesn’t go far enough, said Dan Kelly, president and chief executive of the Canadian Federation of Independent Business.

“This isn’t the ultimate fix that I think small businesses want and need, but it is significant progress,” he said.

The group wants the 30 per cent threshold that will remain for April and May to be scrapped altogether.

Kelly said Canada should adopt a program similar to England, which will provide an 80 per cent subsidy for all businesses.

“So whether you’ve seen your sales flat, increase or decrease, government picks up 80 per cent of the wages with the assumption that the vast majority of businesses are going to be negatively affected or severely negatively affected,” he said in an interview.

The existing provisions won’t help the innovation economy and leave many Canadian technology firms in a lurch, said Benjamin Bergen, executive director of the Council of Canadian Innovators.

He said Industry Canada needs targeted measures to help high-growth companies weather the storm and capitalize on the rebound.

In a survey of 651 technology CEOs, 96 per cent said their company would be ineligible for the program because of its revenue test. That’s because most use metrics other than revenue to measure a decrease in business activity.

Trudeau also announced Wednesday that the federal government will cover 100 per cent of wages for students hired under the Canada Summer Jobs Program. The government will also extend the time period for job placements to the winter, in recognition that many jobs will start later than usual due to the pandemic, and companies will be permitted to hire students part-time.

The hope is this will encourage businesses to hire students to allow them to get the work experience they need and earn incomes during the downturn, Trudeau said.

“Today we’re taking a step in the right direction to help young people find work during this difficult time, but I want to be clear, we will be doing more,” he said.

Earlier Wednesday, Conservative finance critic Pierre Poilievre said relief from the federal government for small businesses suffering losses due to COVID-19 is not rolling out fast enough.

He noted the United States has already delivered $66 billion in forgivable loans to businesses in America while Canadian companies are still waiting for promised emergency financial help.

“If these businesses go bankrupt during this crisis, many will never reopen and these millions of workers will be without jobs and opportunity. This will be a social catastrophe for our country,” Poilievre said in Ottawa.

Conservatives are calling for the Liberal government to use faster measures, including reimbursing GST payments remitted by small businesses for the 12 months prior to the start of the COVID-19 crisis — a move that Poilievre says would put $13 billion back into the bank accounts of business owners.

The Conservatives also say the Canada Emergency Business Account, which will provide interest-free loans of $40,000 for qualifying businesses, should be delivered by credit unions, not just banks.

Poilievre also wants the government to widen eligibility criteria for the Liberals’ wage subsidy program beyond lost revenues to allow employers who have seen lost profits or subscriptions to also apply to this program.

This report by The Canadian Press was first published April 8, 2020.

Teresa Wright and Ross Marowits, The Canadian Press


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

Just Posted

Local emergency crews responded to an early morning fire on Oct. 20th in the Grandview area of Stettler. Two residences on Spruce Park Crescent were damaged in the blaze, which crews are still investigating. Mark Weber/Stettler Independent
PHOTO: Early morning blaze damages two homes in Stettler’s Grandview area

Officials were still on site by mid-morning and crews are investigating

Alberta chief medical officer of health Dr. Deena Hinshaw updates media on the Covid-19 situation in Edmonton on Friday March 20, 2020. nbsp;Alberta is reporting it's highest daily number of COVID-19 cases, with 364 new infections. THE CANADIAN PRESS/Jason Franson
Alberta confirmed 323 COVID-19 cases Tuesday

Central zone active cases at 145

Third annual Christmas Wine Survivor is rapidly approaching

Funds raised will support the Friends of the Library Society

Smooth start to Christ King Catholic School’s year in unprecendented times

Students and staff at Christ-King Catholic School continue to adapt to pandemic’s impact on learning

Health Minister Tyler Shandro and Dr. Deena Hinshaw, the chief medical officer of health, receive flu shot. Photo via Government of Alberta
COVID-19: One more death in central zone

Ponoka County on province’s watchlist

Conservative member of Parliament Pierre Poilievre speaks during a press conference on Parliament Hill in Ottawa on October 19, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Liberals say Tory effort to set up COVID-19 committee will be a confidence matter

The Tories were originally proposing an ‘anticorruption’ committee

(The Canadian Press)
Alberta-raised Cree actor lands role in Disney’s live-action ‘Peter Pan and Wendy’

Tiger Lily is featured in Disney’s 1953 animated “Peter Pan” film

Natural Resources Minister Seamus O’Regan responds to a question during Question Period in the House of Commons Tuesday February 4, 2020 in Ottawa. The Alberta government is welcoming news that Ottawa has approved an expansion of the Nova Gas Transmission Ltd. gathering system in Alberta — while condemning federal delays that it says cost this summer’s construction season. THE CANADIAN PRESS/Adrian Wyld
Alberta welcomes federal approval of gas pipeline expansion while criticizing delay

Pipeline division owned by Calgary-based TC Energy Corp. will now be required to restore 3,840 hectares of caribou habitat,

This 2020 electron microscope image made available by the National Institute of Allergy and Infectious Diseases shows a Novel Coronavirus SARS-CoV-2 particle isolated from a patient, in a laboratory in Fort Detrick, Md. THE CANADIAN PRESS/AP-NIAID/NIH via AP
At least 49 cases of COVID-19 linked to wedding in Calgary: Alberta Health

McMillan says the city of Calgary has recently seen several outbreaks linked to social gatherings

Alberta Premier Jason Kenny and government house leader Jason Nixon chat before the speech from the throne delivered in Edmonton, Alta., on Tuesday, May 21, 2019. Alberta politicians are to return to the legislature Tuesday with a plan to discuss up to 20 new bills — many of which are focused on the province’s economic recovery. THE CANADIAN PRESS/Jason Franson
Alberta legislature to resume Tuesday; focus to be on economic recovery

Opposition house leader Heather Sweet said the NDP will focus on holding Premier Jason Kenney

A passer-by walks past a COVID-19 testing clinic in Montreal, Friday, Oct. 16, 2020. THE CANADIAN PRESS/Ryan Remiorz
Canada ‘yet to see’ deaths due to recent COVID surge as cases hit 200,000

Much of the increase in case numbers can be attributed to Ontario and Quebec

UPDATE: Suspect identified in early morning shooting

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

Executive Director of Agape Kate Halas (left) receives $1000 from Sgt. Eric Christensen (right) on behalf of Agape. Photo/ Shaela Dansereau.
Former Wetaskiwin Peace Officer wins provincial award; gives back to Wetaskiwin community

Eric Christensen has won the Alberta Association of Community Peace Officers Award of Excellence.

Agriculture Minister Devin Dreeshen (Alberta government photo)
Big boost for Alberta college agriculture research

The $2-million agreement to benefit Lethbridge College’s applied research team

Most Read