Ottawa wants to loosen rules for the COVID-19 wage subsidy allowing more people to benefit
OTTAWA—The Liberal government’s latest COVID-19 emergency legislation could make it easier for more people to benefit from a wage subsidy that’s designed to keep workers on the payroll of companies hurt by the pandemic downturn.
According to a draft of the bill obtained by the Star, Ottawa is now willing to cover the majority of wages for businesses that lost 15 per cent of their revenue in March, instead of the steeper 30 per cent the government had proposed earlier.
But businesses still need to attest to the sharper 30 per cent drop in revenue to get the subsidy in April and May, compared with the same months one year earlier, the draft bill says.
The draft also includes new flexibility by allowing certain businesses to use January and February as the reference point for their falling revenue.
Groups like the Council of Canadian Innovators have argued the one-year reference is “not appropriate” for companies like tech startups and some smaller businesses that have fluctuating revenue that sometimes isn’t tracked on a monthly basis.
Despite the changes, the council expressed disappointment that the proposed legislation doesn’t include broader criteria so more businesses can get the support.
“We preferred that Canada omit the revenue test like the UK and U.S. have done, which would support more domestic high-growth companies,” the council’s executive director, Ben Bergen, said in an emailed statement Monday.
“We still need more targeted measures… to help Canada’s tech sector weather the current storm and capitalize on the rebound thereafter,” he said.
The draft bill would allow Ottawa to cover up to 75 per cent of the wage costs for eligible businesses and charities, based on the average weekly wages paid from Jan. 1 to March 15 of this year.
The government has estimated the measure as originally proposed would cost about $71 billion.
After receiving the draft legislation Monday night, opposition parties said their members were poring over it as representatives negotiated with the Liberal minority government about recalling Parliament to pass the bill in its second emergency session in just two weeks.
Speaking outside Rideau Cottage for his daily exchange with reporters, Prime Minister Justin Trudeau said he hoped the legislation would “quickly pass” through Parliament so businesses that have lost revenue because of the COVID-19 pandemic will get money to keep workers on the payroll.
“A lot of work has been done since we announced our plan to subsidize wages. We continue to rely on your input and… feedback as we refine it, and we’ll have more details to share very soon,” Trudeau said.
Simon Ross, press secretary to Government House Leader Pablo Rodriguez, said the minority Liberals are open to working with parties to make sure there is the unanimous consent required to rush the legislation through as soon as possible.
“The government is ready to collaborate,” Ross said. “Canadians need help right now; they need us to set politics aside.”
Peter Julian, an NDP MP from British Columbia and the party’s House Leader, said the New Democrats are carefully looking at the proposed bill after the Liberal government’s first emergency legislation — passed unanimously in the House of Commons on March 25 — contained a number of unacceptable “poison pills.”
Those included measures that would have given the Liberal minority special powers to tax and spend without parliamentary approval until the end of 2021. After opposition parties balked, the government agreed to limit its special powers to spending and borrowing, with a sunset clause that takes effect the end of September 2020.
That bill also created the Canada Emergency Response Benefit that will pay $2,000 per month to people who lost work because of the pandemic.
This time around, Julian said the NDP is looking to make sure the wage subsidy legislation does what Trudeau and his ministers promised it would: support businesses hit hard by the pandemic. The NDP has called for the government to drop the revenue-loss requirement for businesses with fewer than 50 employees, and for the government to do everything it can to speed up applications to get the money out quickly.
On top of that, NDP Leader Jagmeet Singh wrote to Trudeau on Tuesday, urging him to change the Canada Emergency Response Benefit during the upcoming session of Parliament so people working fewer hours can receive it. Singh also wants the government to make sure essential workers get at least $15 an hour, along with a 20 per cent bump in “danger pay” for working through the pandemic.
Trudeau committed Monday to expand the benefit for people with reduced hours or who are still working but earn less money than the benefit will pay.
“This crisis has too profound an economic impact on people, so we can’t leave gaping holes in benefits that really should be providing as much as possible to Canadians right across the country,” Julian told the Star by phone Tuesday.
“We want to make sure people get the help as quickly as possible, and I think with goodwill on all sides these are not problems that can’t be overcome,” he said.
Conservative MP Candice Bergen, the party’s House Leader, told the Star that the goal is to get money directly to Canadian businesses as soon as possible. Her party also wants the government to agree to weekly sessions in the House of Commons with reduced numbers of MPs, so the Opposition can question Trudeau and his cabinet about their response to the pandemic.
Like Julian, Bergen said it’s too soon to say when the House will be recalled to deal with the wage subsidy bill. She said it will be up to the government to show it is open to working with other parties to earn their support for the bill.
“We are not going in there saying: ‘our way or the highway,’” she said. “We’re there for more than just rubber-stamping their legislation.
“We want to be able to see small businesses supported directly and the money get to people immediately.”
With files from Heather Scoffield
Alex Ballingall is an Ottawa-based reporter covering national politics.
Follow him on Twitter: @aballinga