What happened: Recently revised wage subsidy will be applied to both large and small businesses
Why it matters: Workers at larger companies did not appear as if they’d be covered under the revised measures initially aimed at small businesses
The federal government is changing course on its 75% wage subsidy, revealing businesses both large and small will be eligible for the program if their revenue has declined 30%.
The Canada Emergency Wage Subsidy program was originally aimed at helping small businesses keep workers on the payroll.
But Ottawa will now cover up to 75% on first $58,700 an employee earns regardless of the size of the company he or she works for, Prime Minister Justin Trudeau said Monday (March 30) during his daily media briefing outside his home in Ottawa.
“I want to offer a word of caution to businesses: 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. And if you think this is a system you can take advantage of or game — don’t,” he said.
“There will be serious consequences for those who do.”
The prime minister said the wage subsidy program requires trust and good faith from all parties involved, and that a verification system will be developed in the coming weeks.
Government is still developing background documents explaining the technical details of the program.
The prime minister could not offer an estimate on the cost of the Canada Emergency Wage Subsidy program, but instead said Finance Minister Bill Morneau would offer more details of the total cost on Tuesday.
Non-profits and charities are also eligible for the program.
The federal government announced Friday it was boosting the wage subsidy up to 75% after originally unveiling a three-month, 10% subsidy March 18.
Ken Peacock, chief economist of the Business Council of B.C., told Business in Vancouverthe big boost will have the intended impact of retaining far more workers than what was previously on the table.
“I still think we’re going to see a nasty recession but the wage subsidies announced by the government do help mitigate a more dire economic outlook,” he said after the revisions were announced Friday.
“B.C. will leverage federal government packages to a greater extent in proportional terms than many other provinces just because of our orientation towards more small and medium-sized businesses.”
The revised wage subsidies will be backdated to March 15.
The federal government also introduced on Friday the $25 billion Canada Emergency Business Account, which allows banks to offer $40,000 loans guaranteed by government to eligible businesses that will come interest-free for the first year.
Under certain conditions, up to $10,000 of the loan will be forgivable.
Export Development Canada and the Business Development Bank of Canada will be receiving $12.5 billion in additional funding to help small businesses with cash flow, while the federal government said it’s deferring GST and HST payments as well as duties and taxes owed on imports until June 30.
The federal government said it would be the equivalent to $30 billion in interest-free loans for businesses.
Meanwhile, B.C. Health Minister Adrian Dix and provincial health officer Bonnie Henry will provide an update Monday on COVID-19’s spread throughout the province.
On Saturday the provincial government revealed B.C. had 92 confirmed new cases of COVID-19 for a total of 884.
There has been one new death, bringing the total to 17, and one additional long-term health-care facility has had an infection.
That's 12 long-term care homes now that have had at least one infection of either a resident or staff member.
As of Saturday, 81 patients with COVID-19 are in hospital and 52 in intensive care.
Henry said the spike since Friday is not unexpected and is partly a reflection of increased testing.
B.C. has been doing more than 3,000 tests per day.
—With files from Nelson Bennett