Ottawa extends wage and rent subsidy programs until June

Small business group welcomes announcement, but ask for more fixes to help pandemic-hit entrepreneurs

Ottawa extends wage and rent subsidy programs until June

Despite the federal government’s devil-may-care approach to mitigating the fallout of the COVID-19 pandemic, Statistics Canada has reported that the Canadian economy shrank by 5.4% last year, representing the sharpest annual GDP decline in the post-World War II era.

Hawks and doves will argue over whether the deficit spending was worth it, but for now, turning off the taps seems low on the Liberal government’s priority list as it extends two key pandemic aid programs.

At a press conference in Ottawa yesterday, Prime Minister Justin Trudeau announced that the deadline for both the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) programs will be delayed from March 13 to June 5, reported CBC News.

“This isn't the time to pull back on support for workers or business owners,” Trudeau said. “It's the time to see people through what is hopefully the final stretch of this crisis.”

With the extension, eligible business can continue to get a subsidy of up to 75% of wages for workers who are kept on payroll under CEWS. Meanwhile, qualified businesses benefiting from CERS will see a continuation of direct government payments that would go toward covering up to 65% of their rental payments, as well as an additional top-up for those forced to close due to lockdowns.

As per CBC News, the program extensions are expected to represent and additional $16 billion bill for taxpayers – $13.9 billion for the wage subsidy and $2.1 billion for the rent subsidy.

"There is light at the end of the tunnel, but we cannot definitively say that we've turned the corner," said Finance Minister Chrystia Freeland. “That means that public health lockdowns and the supports that sustain them must continue to be available to Canadians where and when they are needed.”

“This is good news for small business owners and will help them plan staffing levels” Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), said in a tweet after the announcement.

In a statement, the CFIB welcomed the extensions as well as a clarification that businesses will be able to continue benchmarking their revenue losses against similar months in 2019 rather than 2020. Still, the organization urged the government to make further fixes to its support programs as many businesses still struggle to access critical government support.

Among other items, the CFIB asked that the federal government:

  • Commit to extending wage and rent subsidies for as long as restrictions are in place;
  • Allow businesses that started in March 2020 or later to access federal support programs; and
  • Do more to raise awareness of CERS among business owners, as well as expand eligibility for the program to include non-arms’ length entities.


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