Talent Canada
Talent Canada

Features Economy
Businesses welcome government relief measures but want more – and quickly


March 26, 2020
By Tara Deschamps/The Canadian Press

Topics
(Steven Kriemadis/Getty Images)

When the federal government teased its $82-billion relief plan for Canadian businesses and workers impacted by COVID-19, Toronto jewelry manufacturer Jewels4Ever was anxious to hear more.

Chief executive Anita Agrawal had already closed her two locations and was fretting about whether she would have to lay off staff, some who have worked for her for 20 years. Now, she’s discovered the measures will help with affording salaries, but don’t cover some glaring challenges that companies like hers have.

“We got a letter from our landlord saying we still expect you to pay rent on time and there are maybe 200 businesses in our building,” she said of the Yonge and Queen Streets location she rents for about $5,000 a month. “Right now, that’s a big concern because that is quite a lot of money and we’re going to have to work around how we’re going to pay that.”

Aid helps, but won’t keep companies afloat

Advertisment

Agrawal is just one of the many business owners across the country who are desperately in need of any help they can get, but feel the federal government’s stimulus package likely won’t be enough to keep every company afloat.

Among the package’s offerings are a three-month temporary wage subsidy for small businesses that will be equal to 10 per cent of remuneration paid during that period, up to a maximum of $1,375 per employee and $25,000 per employer.

Companies are also being allowed to defer income tax payments until after Aug. 31.

The government has even increased credit available to farmers and the agri-food sector and rolled out the Business Credit Availability Program to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses, through the Business Development Bank of Canada and Export Development Canada.

Agrawal was glad to hear the government will give $2,000 a month for up to four months to workers who must stop working due to COVID-19 and do not have access to paid leave or other income support and workers who still have their employment but are not being paid because there is currently not sufficient work.

“We could probably only afford to pay people up to three weeks working for us and so this has really helped lighten the load quite a bit,” she said, noting that she hopes the government will allow the policy to be used retroactively.

Business Development Council has another idea

The Business Development Council of Canada, a not-for-profit organization that represents business leaders across the country who collectively employ 1.7 million workers, thought the federal government should offer some other help.

The organization would like to see the government tell employers that if they pay laid-off workers an amount equal to what they are entitled to receive in Employment Insurance benefits, the government will reimburse the employer at a future date.

“The key is to get money into the hands of individuals and families now rather than forcing them to wait in line when the EI system is overwhelmed,” it said in an email.

The council had looked towards the U.S. and saw its federal government extending $850 billion in loans and other direct support to distressed companies so they can continue to operate and pay their employees.

$75 billion more needed

The council figures a similar rescue package would require at least $75 billion more than the $10 billion Canada has already committed.

The council further called on the federal government to work with the provinces and territories to agree on a common definition of essential services, which has left some businesses able to operate in some places but not in others.

“Many large companies have supply chains that extend across multiple jurisdictions,” the council’s note said. “The fact that they may be deemed essential in one province is of little use if they are unable to secure supplies from other provinces where the definition of ‘essential’ is narrower.”

CFIB reaction mixed

The Canadian Federation of Independent Business, which represents 110,000 small and medium-sized businesses across the country, had a mixed reaction.

The organization said in a statement that it “welcomes” the federal government’s announcements, “particularly that the federal government has indicated an employer will not have to lay off a worker to allow them to qualify for the benefit.”

“However, CFIB believes that this new program does not replace the need to increase the 10 per cent wage subsidy to 75 per cent of wages for all employers, up to a cap of $5,000 per worker per month and calls on the government to expand the subsidy as soon as possible to keep employees connected to their workplaces,” it said.

Carol Popp, the owner of Salon Chateau in Sylvan Lake, Alberta, also had issues with the stimulus package

She temporarily shut down her hairdressing business when she started to worry that customers, who had recently been travelling, would expose her to the virus, which could be deadly to family members with autoimmune issues.

She is disappointed Trudeau’s plans won’t be the lifeline many companies need.

“We do our income tax every year and they know what our rent is? Why don’t they help pay that this month?”

“They’re deferring our utilities and taxes so what comes September, or August, when we all have bills of $2,000 each for all these bills that we didn’t pay in the last three months,” she said.

“A lot of people didn’t have the extra money because of the economy and what’s happened to oil and gas too. We’ve been struggling through a lot of stuff before this but this just put the icing on the cake.”