Impacts of COVID subsidy winding down
Federal government begins winding down COVID supports
Business operators in P.E.I. and across the country are still fighting for extensions as the federal government begins winding down recovery subsidies.
The Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy launched in March 2020 and were extended to September in the federal budget in April. But, starting last week, those benefits are shrinking until they end in September.
Without them, folks in industries like tourism will need help from somewhere else, said operator Matthew Jelley.
“I think, from the federal point of view, these programs are critical and I think that outside of them, then the province is going to have to see what it can do to see the industry through another year," said the president of the Maritime Fun Group – P.E.I.
NEW, NOT BETTER
The federal government is replacing the wage subsidy with the Canada Recovery Hiring Program, but for most P.E.I. operators it won’t be much, if any, help, said Corryn Clemence, CEO of the Tourism Industry Association of P.E.I.
“If you’ve sacrificed and you’ve kept some of your staff on payroll and kept them working throughout, you no longer become eligible for that program.”
The new program focuses on new hires or bringing back laid off workers and is calculated based on rates from March, whereas the wage subsidy had broader coverage and was based on pre-COVID rates.
Given the way the new benefit is calculated, it leaves year-round operators, like the Holman Grand Hotel in Charlottetown, in eligible.
“I don’t know why they tried to fix something that wasn’t broken,” said general manager John Cudmore.
NEED
Speaking to the SaltWire Network in April, before the extensions to the wage and rent subsidies were announced, Jelley said the supports were so needed he would have to close for the summer without them.
While he was able to hire staff back, Jelley said he’s operating with about 50 less people than a normal season and though the gradual reduction doesn’t mean he’ll have to lay anyone off, it will still affect his operation.
“For us, it’s going to impact how many days and how many hours our attractions are open, especially if the tourism traffic doesn’t start to recover.”
Given how slow uptick has been for visitors to the Island, given confusion over provincial border restrictions, Cudmore said he expects many operators will feel it.
“In P.E.I., the summertime is what pays your bills and keeps you running yearround,” he said. “It won’t be us, but I wouldn’t be surprised if you see some operations shutting down for the winter because they just haven’t made enough in the summer to carry them through the winter.”
NEXT YEAR
With the slow season so far, Cudmore said the focus now needs to be just surviving and gearing up for next year, which brings its own issues.
“We can’t worry about August, September,” he said. “Well, we have to worry about it, but at this point we have to start planning a little bit more towards how we’re
going to position ourselves and Prince Edward Island to welcome back tourists and how we get the word out.”
Part of that includes somehow helping operators invest back into their businesses, which is impossible when they haven’t had any surplus revenue, said Clemence.
“On top of trying to survive, they don’t have the hay in the barn to reinvest and redevelop and grow their businesses.”