Small business owners applaud federal salary relief plan
The federal government’s move to increase the wage subsidy to 75 per cent from 10 per cent for small and medium-sized businesses affected by COVID-19 is a major development that will help staunch the bleeding in the country’s private sector, entrepreneurs and business groups said Friday.
The new subsidy, announced in Ottawa by Prime Minister Justin Trudeau, is “finally on the scale to make a difference” and will go a long way toward keeping more Canadians employed during the COVID -19 crisis, said Adam Legge, president of the Business Council of Alberta.
“Key to the success of this program will be the speed in getting this support to people and businesses,” Legge said. “We encourage the federal government to find ways to be able to deploy these funds within a matter of weeks.”
While the federal government had previously announced it would provide a 10-per-cent wage top-up for small business employers struggling with the effects of the pandemic, business groups and labour advocates had said that wouldn’t be enough to prevent more of the mass layoffs already occurring around the country.
Eighteen per cent of Alberta small-business owners who replied to a recent survey by the Canadian Federation of Independent Business said they’ve had to lay off their entire staffs since the start of the COVID-19 crisis, while an additional 33 per cent said they have laid off some staff, said Annie Dormuth, the CFIB’S Alberta director.
Dormuth said her organization had been calling on the federal government to do more and got that response on Friday.
“Definitely this won’t help everyone, but we do believe it will help a lot to avoid those layoffs and also possibly hire some of those employees back,” she said.
In making the announcement Friday, Trudeau said he hoped employers will now be able to “think again” before laying off workers, and potentially even rehire those who have already been let go.
At Triway Services Ltd., a commercial HVAC company in Calgary whose service and maintenance calls have dried up because many of its customers’ buildings are closed, owner Jeff Hesla has already had to let three of his 14 service technicians go. He said the new subsidy comes as a huge relief.
“With all of the stress of the last two weeks, it’s been difficult to sleep,” Hesla said. “If this (subsidy) is the case, I think I wouldn’t have to lay anyone else off.”
David Rousseau, owner of Ollia Macarons & Tea in Mount Royal Village, also praised Friday’s announcement but said it remains to be seen how many businesses will be helped.
“It’s a great move by the government, for sure,” Rousseau said. “But I can’t help wondering if it’s already too late for a lot of businesses.”
Rousseau said his shop has moved to pickups and deliveries only due to COVID-19, and laid off six of his 10 staff. With sales cratering, he’s not sure even a wage subsidy will allow him to rehire.
“We have to be logical and look at what income we’re bringing in right now. As you can imagine, the effect of this crisis on businesses in terms of income has been a terrible disaster.”
Assistance with paying wages also doesn’t address the other issue for Rousseau: the fact that commercial rent is due in days. His landlord is only offering a rent deferral if Ollia completely shuts down, which Rousseau hesitates to do because he wants to save the jobs of his remaining staff. He added he knows other business owners who are receiving no assistance from their landlords.
Mike Mcneil, executive director of the Alberta Small Brewers Association, said the wage subsidy is a “step in the right direction” and shows the federal government is listening to small businesses. However, he said business owners, including the breweries he represents, are far from out of the woods, with rent a top-of-mind problem.
“It’s a critical issue. What is the plan when it comes to rent? A lot of businesses just don’t have a lot of clarity, and it’s a precarious situation right now,” Mcneil said.
The CFIB is calling on the Alberta government to introduce measures to defer rents and lease payments for small businesses.
The new federal wage subsidy for qualifying businesses, for up to three months, will be retroactive to March 15. Further details about the program and how to apply are expected early next week.
Also on Friday, the Liberals said they’re working with banks to provide loans of up to $40,000 for small businesses. They will be interest free for the first year and up to $10,000 could be waived for repayment.
Asked about paying for the measures, the prime minister said the government’s economic foundations were strong before the pandemic and he expressed confidence the economy will bounce back after COVID-19 passes.