Six weeks might be too long to wait for wage subsidy

This week, after some delay, Finance Minister Bill Morneau announced more information on the Canada Emergency Wage Subsidy program, which will require the recall of Parliament before it can be implemented.

The CEWS program is intended to provide financial assistance to Canada’s business community, who are in many cases facing significant economic losses as a result of the COVID-19 virus.

The program will subsidize wages of workers at a rate of

75% of the first $58,700 earned by employees, representing a benefit of up to $847 per week.

This program would be in place for a 12-week period, from March 15 to June 6.

To qualify, an employer must “suffer a drop in gross revenues of at least 30 per cent in March, April or May, when compared to the same month in 2019î to access the subsidy.”

Any new business created after this time frame does not qualify, although details may change.

There is no limit to the size of the employer who is eligible and non-profit organizations will also qualify.

Only public sector employers will not qualify.

Any eligible employer accessing this wage subsidy will have it based on the actual wages paid to employees.

Although employers are expected to demonstrate they will attempt to pay the remaining 25% of the wages, it is not required to access the program.

It is unclear how the government will define an attempt to pay the 25% wage top up.

For those that qualify and make application for the program, it is expected that there will be a sixweek delay before the subsidy will actually be available.

The application process for CEWS is also currently unavailable at this time.

The Canadian Federation of Independent Business has stated that for some business with small margins, there could be a massive loss of jobs without ever reaching the loss of 30% of gross revenue.

I am concerned that new businesses, of which we have many in our region, do not qualify for the program.

This is something I hope will change.

The six-week time frame is also a challenge given that all public information indicates our current public health restrictions are not expected to change over the next six weeks.

This means many businesses will lack the cash flow to hire staff and take advantage of this program.

My remaining concern is that the businesses who are most able to wait the six weeks are minimally impacted by the COVID-19 crisis and are not necessarily the businesses who most need the assistance.

Do you think the Canada Emergency Wage Subsidy will provide the support for those business most in need?