As promised, the  federal wage subsidy to cover three-quarters of salaries will go to any company — large, medium or small — charity or non-profit that can show it has seen revenues drop sharply due to COVID-19. The 75% subsidy on wages is meant to cushion the blow from the pandemic and will be available to employers that can show their revenues have fallen by at least 15% due to COVID-19. 

The subsidy will apply to the first $58,700 of each employee’s salary and provide up to $847 a week per employee for up to 12 weeks, with a possible extension if the crisis continues. The money is available to companies of all sizes, as well as charities and non-profits, and will be retroactive to March 15.

“Funds will be available in approximately six weeks,” Morneau said, adding that businesses will be able to apply through a Canada Revenue Agency portal “soon.” Companies that are signed up for CRA direct deposit will receive funds faster.

The finance minister said companies will be required to “show what the pre-crisis income was of an employee and show that they’re paying that employee an amount up to $847, and then they will get that money returned to them from the Canada Revenue Agency.”

Speaking outside his Ottawa residence, he said the size of the company or the number of employees will not bear on whether it qualifies for the help, in line with what other countries have done. He asked companies that get the subsidy to rehire workers laid off over the last two weeks, and ensure that all the money through the program goes to employees.

Trudeau says companies that can pay their employees without federal help should do so, warning of consequences for businesses caught abusing federal financial aid — although he isn’t providing details. He says the program will have to rely in some measure on employers sticking to the honour system when applying for help. “We are trusting you to do the right thing. If you have the means to pay the remaining 25% that’s not covered by the subsidy, please do so,” Trudeau said. “And if you think this is a system you can take advantage of or game, don’t. There will be serious consequences for those who do.”

The details came after days of criticism from a broad swath of business and labour groups over the original proposal of a 10% subsidy, which they said fell well short of what was needed to avoid mass layoffs.The federal bailout package to date is now valued at more than $200 billion, including $52 billion in direct spending, $85 billion in tax deferrals for individuals and businesses, and $65 billion in loans. TD Economics estimated the increased wage subsidy could add $25 billion in direct spending to the total.

Providing the wage subsidy to companies of all sizes that experience a decline in revenue should help prevent further layoffs and provide much-needed relief to employers and employees, said Goldy Hyder, president and CEO of the Business Council of Canada. Dan Kelly, president of the Canadian Federation of Independent Business, said in a statement that keeping administrative requirements light should ensure support can get quickly to the businesses that need it. Both groups said they would be looking for more details, including whether there will be a cap per employer over the duration of the program.

However, the CFIB also warned that financial issues for other businesses are mounting. The organization suggested that one in five small and medium-sized businesses remain open during the economic shutdown linked to COVID-19, while two in five are worried about having to permanently close. The CFIB suggests one-quarter of its members don’t think they can cover some of their fixed costs, such as rent and leases, for April, based on a survey of its members over the weekend.

The government has also announced other programs to help businesses:

Perrin Beatty, chief executive of the Canadian Chamber of Commerce and a former federal cabinet minister, said the aid program “provides hope for hundreds of thousands of businesses and millions of their employees who had been facing a bleak future.” What’s more, he said, it’s an important step to ensure Canadian businesses and their employees “will be there to restart our economy” when the threat of the pandemic has passed.

Source: Financial Post
Source: The Star
Source: Globe & Mail
Source: Finanial Post
Source: Globe & Mail