Yahoo Finance Trudeau's 10% wage subsidy for small business not enough to stop layoffs: CFIB
Small businesses will be eligible to receive a 10 per cent wage subsidy under Ottawa’s expanding plan to support the economy as it absorbs the impact of the COVID-19 virus.
Prime Minister Justin Trudeau announced the subsidy in a press conference on Wednesday as part of a slate of measures to insulate individuals and businesses.
The federal government will spend up to $82 billion on measures to counter the economic effects of COVID-19. The cost of the aid is equivalent to about three per cent of Canada’s GDP.
For the next 90 days, eligible small businesses can receive up to a maximum of $1,375 per employee, and $25,000 per employer.
“Employers benefiting from this measure would include corporations eligible for the small business deduction, as well as not-for-profit organizations and charities,” the federal government wrote in a release accompanying Wednesday’s announcement. The release did not include further details about eligibility.
“This will help employers keep people on their payroll and help Canadians keep their jobs.”
Canadian Federation of Independent Business president Dan Kelly praised the support for small businesses, but said more needs to be done to prevent layoffs.
“The 10 per cent wage subsidy for small business is the kind of program that we urgently need. But in order to prevent wide-spread layoffs, it needs to be 75 per cent or more as is the case in Europe,” he wrote in a series of tweets following the announcement.
The 10% wage subsidy for small business is the kind of program that we urgently need. But in order to prevent wide-spread layoffs, it needs to be 75% or more as is the case in Europe.
— Dan Kelly (@CFIB) March 18, 2020
The CFIB said as of last weekend, 50 per cent of small firms reported they’ve already experienced a drop in sales. The group said it will advocate for additional wage support for workers in Canadian small businesses.
Greg O’Brien of Hamilton, Ont. runs an independent news website covering Canada’s telecom industry. O’Brien relies on freelance writers, and said he had trouble sleeping on Tuesday night as he considered the “many what-ifs” his business and workers face.
“Overall, I’m feeling a little less anxious than yesterday, and am keeping my head down and working, knowing there’s something of a safety net being deployed,” he told Yahoo Finance Canada after Trudeau’s announcement on Wednesday.
“I feel better after the prime minister’s announcements this morning for business and consumers. It gives me a sense that we’re all not about to go careening out of business.”
O’Brien said the Emergency Care Benefit of up to $900 bi-weekly for up to 15 weeks to provide income support to workers who must stay home, and do not have access to paid sick leave, is another helpful new measure for his workforce.
“That will definitely help and is welcomed,” he said. “Some live month-to-month on what they produce for me and other publications, and so I am still worried about them and others like them.”
