Busi­ness groups push­ing for higher wage subsidies

Fi­nance min­is­ter de­fends plan, says its bet­ter than what’s of­fered over­seas

Toronto Star - - NEWS - BRUCE CAM­PION-SMITH

OTTAWA— The fed­eral gov­ern­ment is com­ing un­der in­creas­ing pres­sure to boost its promised wage subsidies to businesses to keep work­ers on their pay­rolls and en­sure the econ­omy can re­bound when the health cri­sis passes.

On Wed­nes­day, Ottawa rolled out a stream­lined ben­e­fit for work­ers hit by the fall­out of COVID-19, promis­ing $2,000 a month for four months to those who don’t qual­ify for em­ploy­ment in­sur­ance.

But a grow­ing num­ber of com­pa­nies are urg­ing Ottawa to make its pro­posed wage sub­sidy, an­other ben­e­fit promised last week, more gen­er­ous. They say that would keep work­ers em­ployed and avoid fur­ther bur­den­ing a bu­reau­cracy al­ready strug­gling to cope with a tsunami of EI ap­pli­ca­tions — close to a mil­lion in the last week.

In a joint state­ment Wed­nes­day, more than 60 busi­ness or­ga­ni­za­tions called for di­rect fund­ing from the fed­eral gov­ern­ment to em­ploy­ers in or­der to keep work­ers on the job rather than face lay­offs.

“It’s crit­i­cal at this point,” said Per­rin Beatty, pres­i­dent and

CEO of the Cana­dian Cham­ber of Com­merce. Small and medium-sized businesses that ac­count for most of the em­ploy­ment in Canada do not have the abil­ity to sur­vive an ex­tended shut­down, Beatty told the Star.

“We have to con­trol the spread of the virus, but the ques­tion is how do we do this in a way that min­i­mizes the eco­nomic dam­age to the country in the process,” he said.

“If we do not sub­stan­tially in­crease the sup­port for em­ploy­ers to keep their em­ploy­ees on the pay­roll, we will find that many of these businesses, thou­sands of them, will not re­open when we come out the other side of this.”

The eco­nomic aid pack­age un­veiled by the fed­eral gov­ern­ment last week promised small businesses a wage sub­sidy for three months equal to 10 per cent of salary, up to a max­i­mum of $1,375 per em­ployee and $25,000 per em­ployer.

But businesses have said that’s not enough and point to ju­ris­dic­tions such as Den­mark and the United King­dom, which of­fer subsidies of more than 70 per cent to com­pa­nies in re­turn for guar­an­tees that work­ers won’t be laid off.

“It’s im­por­tant we don’t leave our­selves with a mas­sive chronic unem­ploy­ment prob­lem be­cause the businesses have closed,” Beatty said.

The coali­tion of busi­ness or­ga­ni­za­tions in­cludes cham­bers of com­merce across the country, the Re­tail Coun­cil of Canada, the Cana­dian Con­struc­tion As­so­ci­a­tion and the Ho­tel As­so­ci­a­tion of Canada. The Con­ser­va­tives and New Democrats have also made the same ap­peal.

Dennis Darby, pres­i­dent and CEO of the Cana­dian Man­u­fac­tur­ers and Ex­porters or­ga­ni­za­tion, said more sup­ports are needed as the cri­sis wors­ens. “Di­rect wage subsidies through em­ploy­ers would en­able businesses keep pro­duc­tion work­ers em­ployed through­out the cri­sis,” Darby said.

An­other sig­na­tory, the Cana­dian Fed­er­a­tion of In­de­pen­dent Busi­ness, ap­plauded the emer­gency ben­e­fit an­nounced Wed­nes­day and the fact that an em­ployer will not have to lay off a worker to al­low them to qual­ify.

Still, the or­ga­ni­za­tion wants the gov­ern­ment to boost its wage sub­sidy to cover 75 per cent of a worker’s wages to a cap of $5,000 a month, say­ing such a pro­gram will de­liver money faster to em­ploy­ees than any gov­ern­ment ben­e­fit.

It would also main­tain con­nec­tions be­tween work­ers and em­ploy­ers. “This is im­per­a­tive to en­sure em­ploy­ees can go back to work the day af­ter the emer­gency ends, al­low­ing Canada’s econ­omy to re­turn to nor­mal as quickly as pos­si­ble,” the or­ga­ni­za­tion said in a state­ment.

But it seems Fi­nance Min­is­ter Bill Morneau and Prime Min­is­ter Justin Trudeau are split on the mer­its of en­hanc­ing the ben­e­fit.

Trudeau said Wed­nes­day that Ottawa is look­ing at ways to pro­vide more di­rect help to businesses and “look­ing very care­fully” at what is be­ing done in Den­mark and Ger­many, “and look­ing at how we can make that work or make equiv­a­lent things work here in Canada.”

But in a Se­nate ap­pear­ance Wed­nes­day, Morneau de­fended the gov­ern­ment’s ap­proach and said it was bet­ter than the over­seas ex­am­ples of­ten cited.

Sen. Pierre-Hugues Boisvenu chal­lenged Morneau, ask­ing why Canada did not fol­low the lead of Den­mark and sub­si­dize wages. Boisvenu said the ap­proach taken by the fed­eral gov­ern­ment in forc­ing com­pa­nies to shed em­ploy­ees will cause prob­lems.

“When this cri­sis will be over and things are go­ing bet­ter, those com­pa­nies will be fac­ing a ma­jor prob­lem in try­ing to re­cruit peo­ple,” he said.

Morneau in­sisted the gov­ern­ment ap­proach would main­tain ties be­tween com­pa­nies and their em­ploy­ees.

“Clearly we do not agree with you,” he told Boisvenu.

The goal, Morneau said, is to de­liver fi­nan­cial as­sis­tance to Cana­di­ans fac­ing “se­vere strain.”

“Peo­ple in short or­der won’t have enough money for gro­ceries. We need to find a way to make sure we get money to them, we need to find a way to make sure we bridge for these businesses so that em­ploy­ment will be there when we come back,” he said.

Still, he said the gov­ern­ment is open to ideas. “Trust me. Should we find we need to change, we will change.”

JUSTIN TANG THE CANA­DIAN PRESS FILE PHOTO

Fi­nance Min­is­ter Bill Morneau, left, speaks with Has­san Yus­suff, pres­i­dent of the Cana­dian Labour Congress, and Per­rin Beatty, pres­i­dent of the Cana­dian Cham­ber of Congress. Beatty is push­ing Morneau for more money to keep work­ers em­ployed.

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