Prime Minister Justin Trudeau announced more measures today to support businesses and young Canadians taking a financial hit from the global pandemic — while Conservatives warn of catastrophic consequences if the money doesn’t get out the door soon.
Facing some criticism over benefit programs that exclude many businesses and individuals, Trudeau said the government’s goal was to deliver sweeping, robust programs that would help a large number of people as quickly as possible. The government recognized there would be gaps and the package would need fine-tuning to include those who didn’t initially qualify, he said.
“We recognize we are not aiming for perfection,” he said.
Trudeau also announced changes to the Canada Summer Jobs program aimed at helping young people get work in sectors that aren’t shut down due to the global pandemic.
The changes include a boost to the wage subsidy — up to 100 per cent — an extension of the end date for employment to Feb. 28, 2021 and the inclusion of part-time jobs.
Trudeau also announced changes to the 75 per cent wage subsidy program today, saying they were made after the government consulted with various stakeholders.
“We want to make these measures as effective and inclusive as we can,” he said. “So we’re listening and making adjustments along the way.”
Business groups complained that the initial criteria for the wage subsidy— including the requirement that a business claiming the subsidy see its revenue decline by 30 per cent compared to the same month in the previous year — would exclude many businesses, including new, growing or seasonal companies.
New criteria will help more small businesses qualify: Trudeau
Trudeau said under the proposed new rules, businesses can use January and February of 2020 as comparison months to measure their revenue drop — instead of just the same month last year — which should help new or scaled-up businesses qualify.
Another proposed adjustment reduces the required revenue drop to 15 per cent for the month of March, which is expected to capture the many businesses that were forced to shut down midway through that month.
Trudeau said the government aims to have the wage subsidy program up and running in three weeks.
Conservative finance critic Pierre Poilievre said billions of dollars have already been distributed to keep businesses in the U.S. afloat, yet small businesses in Canada have not yet received “a red cent.”
He said the situation has become more urgent and warned of a “social catastrophe” — increased demand on food banks and other social services and a rise in homelessness and poverty — if more businesses are forced to close.
“Time is running out. So is the money. And if the government does not act, it will see bankruptcies on a mass scale and massive social consequences for the working class … people who work at small businesses every day,” he said.
Legislation for the wage subsidy program must be passed in Parliament, but a date has not yet been set for MPs to be recalled.
Poilievre said the Conservatives are pushing for regular sessions of the House of Commons to hold the government to account.
Trudeau has said the government is looking into the possibility of virtual sessions, but Conservative Leader Andrew Scheer has said it would be better to have in-person meetings that respect rules around physical distancing.
The Canadian Federation of Independent Business (CFIB) said the proposed changes will help thousands more small businesses qualify for the subsidy, but it still wants to see the government drop the 30 per cent test altogether for small and medium-sized firms.
The CFIB also said the time frame between applying and receiving the subsidy — three to six weeks — is too long a wait for many businesses.
“CFIB urges all parties to quickly review and approve the legislation to ensure businesses can have confidence this much needed support measure will be in place as soon as possible,” it said in a statement.
Risk of delay if Parliament doesn’t sit soon
Finance Minister Bill Morneau said the subsidy could flow in two to three weeks but added there is a “risk” of further delay if political parties can’t agree on a path forward to pass the enabling legislation.
“It’s urgent. We need there to be an agreement as soon as possible,” he said.
With the proposed changes, Morneau said the wage subsidy program will be worth $73 billion, up from the previous cost estimate of $71 billion.
Morneau said any business applying for the benefit must designate someone with control over the company’s finances. He also warned that any business that subsequently is found not to have qualified will be required to repay the money, and those who deliberately abuse the program will face stiff fines of up to 225 per cent of the value of the subsidy or up to five years in prison.
“This is a huge trust program. We will not tolerate abuses,” he said.
Another measure to help small businesses weather the storm is a government-guaranteed $40,000 loan program. Morneau announced Wednesday that the program — which offers 25 per cent of the loan as a non-repayable grant if the rest of the loan is paid off by Dec. 31, 2022 — will be available as of Thursday.
The loans will be available through banks and credit unions “as the program unfolds,” he said.
Surge of CERB applications
As of today, 1.72 million Canadians have applied for the Canada emergency response benefit (CERB) since the process began on Monday morning.
Some people were reporting what they described as double payments this week on social media. Treasury Board President Jean-Yves Duclos said some people may be receiving a retroactive payment in addition to a monthly payment in a short period of time. (The CERB program is retroactive to March 15.)
“But let us be very clear. It’s $2,000 per month, so these people who have received two payments, one retroactively and one prospectively … everyone needs to manage his or her budget on the understanding that it’s $2,000 per month, regardless of when that $2,000 is actually deposited in his or her bank account,” he said.
Despite the high number of applications, the government has been criticized for setting eligibility criteria that excluded some.
Trudeau has said there will be adjustments to the program in the coming days to include more people, such as gig workers, contractors and volunteer firefighters who work 10 or fewer hours per week. He also has promised support for those who continue to work but are making less than they would through CERB, such as home care workers or people caring for vulnerable seniors in long-term care facilities.
“You need support now, and work is underway to get it to you as soon as possible,” he said.
“For people in all of these situations, we see you, we’re going to be there for you and we’re working as hard as we can to get you the support you need.”
Trudeau is attending a cabinet meeting in person today, the first time he has gone out of self-isolation since his wife Sophie Grégoire Trudeau was diagnosed with COVID-19 last month.