Finance Minister Bill Morneau proposed sweeping changes to the federal government’s wage subsidy program that would extend the program until the end of the year and open the program to more businesses. Under the proposed changes, all Canadian companies that have experienced a revenue decline because of COVID-19 would qualify for financial support — doing away with the requirement that businesses prove a 30 per cent decrease in revenue in order to qualify.
That 30 per cent benchmark was a key sticking point for business groups which complained that the requirement excluded many companies and discouraged those receiving the subsidy from growing because of the risk of losing federal aid. “We are ensuring that Canadians are able to get back to work as quickly as possible,” Morneau said in a statement. “The adjustments we are proposing would ensure that the [wage subsidy] continues to address Canadians’ needs while also positioning them for growth as economies continue to gradually and safely reopen.” Morneau said the government already has shared the draft legislation with the opposition parties that would extend the program until Dec. 21. The new changes would take effect retroactively to July 5.
Under the proposed legislation, all qualifying businesses would receive a base subsidy that would vary according to how much revenue they lost. Harder-hit companies would receive larger subsidies. The businesses that have been hit hardest by the economic downturn caused by the COVID-19 pandemic — those that have experienced drops in revenue of at least 50 per cent — would receive additional top-up subsidies of up to 25 per cent. As of July 13, the wage subsidy had paid out $20.3 billion to 262,200 companies. Morneau said the changes were drafted following extensive consultations with businesses and employers reporting major flaws in the original program. Dan Kelly, president and CEO of the Canadian Federation of Independent Business, praised the proposed changes.