Benefits package not enough, group says

CFIB welcomes federal government move, but calls for increase to wage subsidies

While businesses welcomed the federal government’s benefits package for Canadians losing income to the COVID-19 pandemic, what’s really needed is more help for employers to keep workers from having to be laid off at all, they say.

The benefit, announced Wednesday, will provide $2,000 a month for four months for eligible Canadians who have lost their income due to COVID-19, including self-employed people.

“This is an unprecedented situation with an overwhelming demand by Canadians to get money as quickly as possible,” Trudeau said Wednesday, telling reporters the government received almost a million employment insurance claims last week.

Finance Minister Bill Morneau said the measure allows companies to temporarily let go of workers to cut payroll costs and leave money in the affected employees’ pockets.

“Companies don’t need to separate their employee from their company. They just need to say, ‘We can’t pay you

during this time period.’ And when that happens, there is a direct wage subsidy to people, to employees, so that they can actually live their lives,” Morneau said. “When this is done, they can go back to work for their employers and that we think is critically important.” Trudeau said government employees are being reallocated to help deal with the demand for EI claims.

Brian DePratto, senior economist at Toronto Dominion Bank, told clients in a note that the new program will “hopefully simplify the application process,” but that the government should roll out more measures to help businesses survive COVID-19.

Business organizations say while the benefits are a start, they’re not enough.

Dan Kelly of the Canadian Federation of Independent Business said the CFIB believes the current 10 per cent wage subsidy for employers should be increased to 75 per cent, up to $5,000 per worker per month. The CFIB is calling on the government to expand this subsidy as soon as possible.

CFIB vice-president of national affairs Jasmin Guénette said giving employers a higher wage subsidy would help them preserve their relationships with their employees, meaning that they wouldn’t need to lay them off, necessitating employment insurance or other support.

Guénette said he also believes it will lead to a faster economic recovery, as workers can get back to their jobs faster.

“It’s less complicated,” he said, adding that it would mean fewer people going on employment insurance or other benefits and slowing down the system.

The CFIB isn’t the only group calling for the subsidy to be increased to 75 per cent — similar calls this week have come from the federal New Democrats and Greens. As well, the Canadian Chamber of Commerce put out a public statement asking for more support from the government for small businesses.

The statement calls on the government to cover up to 80 per cent of workers’ lost incomes.

The chamber’s chief economist, Trevin Stratton, said despite Wednesday’s announcement, the organization still wants to see wage subsidies go up. Stratton said not only would a wage subsidy help keep employers connected to their employees, ensuring a quicker recovery, it would also help the employees.

Psychologically, it would help people to know they still have a job throughout the pandemic, he said. As well, employees would still be able to access their benefits.

“Why not just avoid … as many people being laid off in the first place?” Stratton said.

Both Stratton and Guénette said they’re confident the federal government is considering hiking wage subsidies. But Stratton said the change needs to come sooner rather than later.

“I think we need to act fast,” he said. “There’s a lot more work to be done.”