What are the COVID-19 pandemic assistance programs currently in place for businesses?
The most popular pandemic relief programs for businesses are the Canada Emergency Rent Grant, or CERS, and the Canada Emergency Wage Subsidy, or SSUC, which expire for most industries on October 23.
The ESRB is available to Canadian businesses, nonprofits or charities that saw their income decline during the pandemic and need to cover part of their commercial rent or real estate expenses.
The SSUC is available to Canadian employers who experienced a drop in income during the pandemic and compensates employers based on the magnitude of those losses and the size of their payroll.
The purpose of these grants is to enable businesses to rehire workers, help prevent further job losses, and facilitate the return of businesses to normal operations.
The Liberal government campaigned to extend the SSUC for the hardest hit sectors of the economy until March 31. In addition, the government has the option of extending the full program until November 20. And employers will still be able to submit retroactive claims after October. 23.
Another program that many restaurateurs have relied on is the Canada Business Emergency Account, a loan of up to $ 60,000, one-third of which is repayable if repaid by December 31, 2022. .
One program will continue: the Restoration of Canada Hiring Program. This program, similar in many ways to the SSUC, provides subsidies to employers who increase their payroll, either by hiring, increasing the number of hours for workers, or increasing wages.
What about programs for individuals?
As with business grants, pandemic benefits for individuals are expected to begin ending on October 23.
The most important is the Canada Recovery Benefit, or UR, introduced last September to replace the Canada Emergency Benefit. The CRB gives eligible individuals $ 300 per week, although the actual payout is $ 270 after deducting a 10 percent withholding tax. The CRB is designed in part to support the self-employed who have lost at least 50 percent of their income.
According to the latest employment data, one of the few remaining weak points in the labor market is that of the self-employed. Existing claims would continue, but self-employed workers without a claim who lost their income after October 23 would be on their own.
The CRB is one of a series of programs for people who have lost their jobs or income due to COVID-19, including the Canada Illness Recovery Benefit and the Canada Caregiver Recovery Benefit. New claims under these programs are expected to end on October 23, although people with existing claims will still receive benefits.
Also last fall, the Liberal government established a minimum benefit of $ 300 for EI claimants. (This was lower than the previous minimum of $ 500 set at the start of the pandemic, but more generous in most cases than the pre-existing income replacement rule of 55 percent for the EI program.) The rate minimum benefit for new EI claims is in effect until November 20.
How many have used these pandemic assistance programs?
Business owners have said federal emergency support has been a lifeline for their industry. Many have relied on federal funds to fill deficits related to the pandemic. According to government data, the wage subsidy paid $ 93.4 billion to 4.4 million applicants, while the rent subsidy paid $ 6.5 billion to 1.7 million applicants.
In addition, CEWS and CERS have jointly invested billions of dollars in the accommodation and food services sectors. Federal data shows that at the start of the pandemic, the food industry accounted for about 10% of all wage subsidy applications. In spring 2021, it was around 20%.
Will the federal government extend the programs?
Wage and rental subsidies are due to expire on October 23, although the Liberal government has the legal authority to extend them for another four weeks, until November 20, without further parliamentary approval.
Deputy Prime Minister and Finance Minister Chrystia Freeland said the government was considering options to extend support for businesses beyond the October 23 expiration date.
Ms Freeland told reporters last week in Washington that she was continuing to consult with business leaders and government policy experts on the matter and that an announcement would be made shortly.
A press release from the Prime Minister’s Office on Friday said that “one of the areas of immediate focus for the next legislature will be the benefits of COVID-19 support that many Canadians and businesses still rely on, and the government will work on it. in collaboration with other parliamentarians. to continue to support Canadians.
Canadian Federation of Independent Business President Dan Kelly calls on the government to clarify the status of expiring support programs as soon as possible.
“We need the Prime Minister and the Deputy Prime Minister immediately to share their plans for these essential programs,” he said in a statement. “Small business owners must make decisions now that determine their lifespan and the number of employees they can afford to keep over the winter. “
Massive subsidies to workers and businesses during the pandemic are the main drivers of the large federal deficit, estimated at $ 354.2 billion in 2020-2021, according to the April federal budget. The budget predicted this year’s deficit to be $ 154.7 billion, while the Liberal Party’s platform estimated it at $ 156.9 billion. (The Liberals have proposed additional spending, along with compensatory tax hikes and other income increases.)
The Department of Finance and the Canada Revenue Agency declined to provide statistics on the hiring subsidy program.
Business groups that spoke to The Globe and Mail, including the Canadian Chamber of Commerce, the Canadian Federation of Independent Business, the Retail Council of Canada, Restaurants Canada and the Tourism Industry Association Canada, all suggested that most of their members preferred to access the wage subsidy instead of the hiring allowance.
What will the loss of these programs mean for businesses?
Restaurants Canada is pushing for subsidies to continue as long as restaurants are subject to public health restrictions, such as capacity limits.
“It will be catastrophic if this support does not continue,” said Todd Barclay, president of the industrial group.
Perrin Beatty, president of the Canadian Chamber of Commerce, said too many businesses still face public health limitations that prevent them from being self-sufficient. “It’s critical [the subsidies] continue, ”Mr. Beatty said. “Having brought them this far, we cannot allow people to drown 50 feet from shore. “
Canadian Labor Congress president Bea Bruske also said personal support programs should be extended. “There is certainly still a need. There are still a lot of people who cannot return to the workforce for various reasons, ”she said, adding that the grants should be complemented by new training programs.
Those supporting the extensions note that the Canadian economy has yet to fully recover from the pandemic and that parts of the country are experiencing an alarming fourth wave of the virus.
What does this mean for the resumption of employment in Canada?
Statistics Canada reported that employment in Canada has returned to pre-pandemic levels. The country added 157,100 jobs last month in September. The unemployment rate fell to 6.9 percent from 7.1 percent.
However, the job market is heading for an uncertain time as these federal programs are set to expire.
The hospitality industry, which has struggled to hire and retain workers, lost 26,700 people in September. Employment in this industry is down 14.8% from the pandemic. Only agriculture is doing less well, with a drop of 20.2%. In September, 389,000 people were continuously unemployed for 27 weeks or more, more than double since the start of the pandemic.
More than 300,000 people stopped receiving unemployment benefits thanks to EI in mid-September. Between September 13 and 19, about 1.37 million people were receiving regular EI benefits for job loss, according to a preliminary estimate released Monday by the federal government. The week before, there were 1.69 million EI claimants.
Business groups have complained about a labor shortage, saying the CRB and more generous EI benefits are to blame, at least in part.
- Ottawa in talks to extend pandemic aid beyond October 23 deadline
- Ottawa under pressure to extend COVID-19 benefits for businesses and workers before October 23 deadline
- Canada’s upscale restaurants struggle to survive
- “A remarkable milestone”: employment in Canada returns to pre-pandemic levels
- EI numbers plunge as benefit transition takes hold
With reports from Globe staff.
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