Business leaders urge Ottawa to ease conditions for 75% wage subsidy

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Former Blackberry CEO Jim Balsillie, seen here in Toronto on June 26, 2019, chairs the Council of Canadian Innovators, which urges federal officials to review the conditions of the government’s emergency wage subsidy.

Glenn Lowson / The Globe and Mail

Business leaders and social policy analysts warn that the conditions imposed by the federal government’s multibillion-dollar income support package will exclude many people and employers.

Canada’s tech startup community is particularly disappointed with the conditions announced this week for the federal government’s new emergency wage subsidy to help companies hard hit by COVID-19, which would give employers funds to cover 75 percent of salary costs up to $ 58,700 – or $ 847 per week.

Finance Minister Bill Morneau announced Wednesday that employers will have to demonstrate a 30% cut in their earnings every month compared to the same month a year earlier.

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Business groups claim that a business’s monthly income can vary widely, especially if it is relatively recent.

Jim Balsillie, former president and co-CEO of Research in Motion and current president of the Council of Canadian Innovators, said that many small and medium-sized businesses do not generate monthly income statements.

Balsillie’s group is advocating for Canadian tech companies and urging federal officials to review the rules when the law to implement the program is tabled in Parliament, likely next week. Balsillie said many tech entrepreneurs are also concerned that errors in the applications could result in severe penalties for program compliance.

“There is tremendous anxiety,” he said in an interview. His organization is calling for sanctions to be eased, an emphasis on faster processing, perhaps by outsourcing some of the work to Canadian tech companies, and changes to the 30% rule.

“This is not the right measure,” said Balsillie, noting that businesses are more likely to track activities such as reservations, new subscribers, units shipped or billable hours.

Other business owners and defense organizations have also criticized the 30% rule.

Goldy Hyder, President of the Canadian Business Council, which represents Canada’s largest corporations, expressed frustration that the federal government has chosen to offer a complicated wage subsidy program.

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“We have to act with some urgency, and we have to keep it simple and not complicate things in the event of a crisis,” he said.

Morneau generally responded to some of the concerns Thursday before the House of Commons finance committee, saying the government is looking for simplicity and speed.

“We are going as fast as possible,” he said after the three main opposition parties accused the government of creating delays and confusion. “It’s not as simple as pushing a button. … I can assure you that if we can do it faster, we will actually get there. ”

The government will need the support of opposition parties to quickly pass the law.

Bloc Quebecois leader Yves-François Blanchet said in a statement on Thursday that his party was calling for adjustments to the 30% rule and that Ottawa would cover some of the costs of operating businesses.

John Ruffolo, Vice-President of the Canadian Council of Innovators and former CEO of OMERS Ventures, said that the Department of Finance had miscalculated the fact that the Canada Revenue Agency managed the program.

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“He is going to be doomed to failure,” he said. “They will try to build this on the fly. It is likely that people submitting applications will be massively blocked and that they are not designed to understand the needs of different companies. “

He urged Ottawa to run the wage subsidy program through the banks, which it said could withdraw the money within 48 hours.

The government has also implemented a program called the Canadian Emergency Response Benefit (CERB) to provide up to $ 500 per week for 16 weeks to people who have lost all their income due to COVID-19.

Critics have noted that CERB excludes individuals such as entrepreneurs who may have lost most, but not all, of their income.

Also on Thursday, the Canadian Center for Policy Alternatives released a report that one-third of unemployed Canadians would not be eligible for EI or CERB. Some of the reasons include the fact that they are long-term unemployed or have not reached the income threshold of $ 5,000 in the past year to be eligible for CERB.

Prime Minister Justin Trudeau responded to the report at his daily press conference by saying that the two income support programs will help millions of Canadians, but acknowledged that the government has more to do.

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“We know that many vulnerable people who will not be able to access this support will need additional help,” he said. “We make sure we get it through shelters, not-for-profit and charitable organizations as well, but there is always more to be done.”

The federal government is expanding its promise to subsidize the wages of employers affected by COVID-19 to large businesses, nonprofits and charities if they have lost 30% or more of their earnings. But he warns them not to take advantage of the multi-billion dollar program and to see that the money is going to the workers, not the owners. The Canadian Press

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