Trudeau urges employers to rehire laid-off workers as wage subsidy expanded to 75 per cent
Drop in revenue, not company size, is the deciding factor for employers in qualifying
Ottawa’s 75 per cent wage subsidy will be available to all employers, regardless of size.
The deciding factor for qualifying will be a 30 per cent drop in revenue, Prime Minister Justin Trudeau said this morning. That differs from earlier statements that it might only be available to small- and medium-sized employers impacted by the COVID-19 pandemic.
“We want people to be able to continue to be paid, whether they’re working for a business that has 10 employees or a thousand,” said Trudeau.
“Every business of every size is having to make some difficult decisions because of COVID-19, and that’s why the number of employees is not the eligibility criteria we’ve chosen.”
Rehire your employees now
Trudeau asked employers to reverse the layoffs that have already taken place in light of this new program.
“You should make every effort to hire back those workers who have been laid off in the past two weeks,” he said.
He also warned employers not to take advantage of the system.
“We are trusting you to do the right thing. If you have the means to pay the remaining 25 per cent that’s not covered by the subsidy, please do so,” he said. “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 this.”
For the program to work, every dollar needs to go back to the workers, he said.
How it works
The government will cover up to 75 per cent of a worker’s wages on the first $58,700 he or she earns.
That translates into a maximum subsidy of $847 per week, and the subsidy will be retroactive to March 15, said Trudeau.
How much this will cost the federal government is unknown at this point — but Trudeau said it can afford it.
“We have been making sure that we set aside money for a rainy day,” he said. “Well, it’s raining. And now we are able to invest in Canadians to support Canadians as we make the difficult decisions needed to get through this and come back stronger than ever before.”
Help for specific sectors
Trudeau was pressed on helping Alberta’s energy sector, with one reporter pointing out that oil opened at less than $5 a barrel today.
He said the plan is to help all sectors — and that the emergency wage subsidy is the primary way to help workers.
“At the same time, we recognize there are certain industries that have been extremely hard hit by both the drop in oil prices and the COVID-19 challenge, whether it’s airlines or oil and gas or tourism,” he said. “There are significant areas where we are going to have to do more and, as I said from the very beginning, we will be doing more.”
Bailout package worth $200 billion plus
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. Last week, 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.
“The decisions to make the wage subsidy widely available to employers of all sizes and structures is the right approach given the unique nature of the COVID-19 pandemic,” Kelly said in a statement.
“The wage subsidy is the single best measure to help Canada prepare for a quick recovery the minute the emergency phase of the pandemic is over.”
Financial issues mounting
But the CFIB also warned Monday 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.
Trudeau isn’t saying if the government is going to help with those costs, only that the Liberals will listen to businesses and non-profits that have problem and try to address them.
With files from the Canadian Press