The Canadian government will continue to pay up to 75% of employee wages until the end of August for some businesses, acknowledging the possibility of mounting bankruptcies as reopening in Canada proceeds slowly.
“Business owners, please take confidence from this announcement. You now have some runway to catch your breath as you get restarted, so please, bring back your employees,” Prime Minister Justin Trudeau said at a news conference Friday.
While business organizations welcomed the extension, many say they are alarmed at the continuing damage being inflicted — especially on small and medium-sized businesses — during the economic shutdown.
Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), told CNN that “it has been absolutely soul crushing to see what has happened to entrepreneurs who pride themselves on being self-sufficient and resilient people.”
“If the current restrictions last until the until the end of May, 40% of small businesses are saying that they are not sure whether they would ever be able to reopen their doors, that’s how worrisome this current situation is,” Kelly said.
In surveys conducted over the last few weeks, the CFIB says more than 1 in 4 small and medium-sized business reported having lost 90 to 100% of revenue because of pandemic-related lockdowns.
And yet, in a problem acknowledged by both business groups and the Canadian government, the wage subsidy already on offer has not met expectations, with fewer businesses applying than expected.
Nearly 8 million Canadian workers now collect about $1,400 a month as part of an emergency benefit available to anyone who lost their job because of Covid-19. That program may now be keeping prospective employees at home.
Finance Minister Bill Morneau said the government will look “carefully at the relationship between these two benefits.”
Source: CNN News