Federal wage subsidy for businesses to be extended to December: Trudeau

Trudeau says discussions continue on extending the Canada-U.S. border closure

CBC.ca
July 14, 2020
Ryan Patrick Jones

Prime Minister Justin Trudeau said today the federal government is extending the emergency wage subsidy program to December of this year.

The program covers 75 per cent of wages, up to a weekly maximum of $847, for workers at eligible companies and non-profits affected by the economic slowdown caused by the COVID-19 pandemic.

"This week we'll be announcing an extension to the wage subsidy program until December, to give greater certainty and support to businesses as we restart the economy," said Trudeau.

The wage subsidy program is the centrepiece of the government's plan to get Canadians back to work following several months of restricted economic activity -- but the program's uptake has not been as robust as the government had hoped.

Ottawa to post $343B deficit as spending hits levels not seen since Second World War
As of July 6, the wage subsidy had paid out $18.01 billion to 252,370 companies.

The government's fiscal and economic "snapshot" last week boosted the budget of the wage subsidy program to $82.3 billion.

Trudeau wasn't saying today how the government will reshape the eligibility rules for the program -- rules which critics have claimed act as a barrier to receiving the aid.

The Liberals originally saw the wage subsidy as a key tool to help cushion the economic blow from COVID-19 by helping workers stay tied to their employers while businesses remained closed due to the pandemic.

Instead, the amount of money spent on the program lagged behind the funds being spent on the Canada emergency response benefit (CERB), which was designed to help people who had lost their jobs or nearly all their hours to pandemic restrictions. The $500-a-week CERB benefit had, as of July 5, paid out almost $54.8 billion to 8.25 million people.

The budget for that program is now at $80 billion, but it's scheduled to close in the fall.

Finance Minister Bill Morneau spent weeks leading up to the July 8 fiscal update getting input from businesses, labour groups and other stakeholders on how to reshape the wage subsidy program.

The government has hinted at changes to revenue-reduction thresholds that may discourage companies from growing.

"We need to reduce disincentives to growth," Morneau said last week. "We need to make sure the subsidy is appropriate for the challenges facing enterprises in actually rehiring and getting people back to work."

Today, Trudeau also promised more details on federal financial support for provinces as they seek to restart their economies.

"We've also been working very hard, with Deputy Prime Minister [Chrystia] Freeland and I, on the safe restart program with the provinces, and we will have an update on that later this week" said Trudeau.

So far, the government has pledged $14 billion to help the provinces and territories reopen their economies. Premiers have complained that isn't enough money to meet their needs and that it comes with too many strings attached.

Trudeau and Trump talk trade, border closure

Trudeau said he spoke with U.S. President Donald Trump earlier this morning about the Canada-U.S. border closure, the new NAFTA agreement, Trump's threats of aluminum tariffs and the Black Lives Matter movement.

An agreement to close the land border between the two countries to non-essential traffic is set to expire on July 21.

"We recognize that the situation continues to be complex in the United States in regards to COVID-19," Trudeau said. "Every month, we have been able to extend the border closures to all but essential goods and services, and those discussions are ongoing with the United States right now as we are a week from the next deadline for closures."

The number of confirmed cases of the novel coronavirus in the U.S. has topped 3.3 million, according to data from Johns Hopkins University. The daily rate of new cases there continues to rise swiftly, even as Canada seems to have its outbreak largely under control.