Canadian Manufacturing

Trudeau pushes wage subsidy as another small business program delayed

CEBA to include companies with payrolls of less than $20,000 and with non-deferrable expenses.

June 19, 2020  The Canadian Press

OTTAWA — The federal government is delaying the start-date for another program that was supposed to help small businesses survive the COVID-19 pandemic.

Finance Minister Bill Morneau took to Twitter late on June 18 to announce that the promised expansion of the Canada Emergency Business Account to include small owner-operated businesses would not launch June 19 as scheduled.

The CEBA, which provides interest-free, partially forgivable loans of up to $40,000, has been expanded twice to include more businesses.

Several weeks ago, the government announced the program was to be expanded again to include companies with payrolls of less than $20,000 and with non-deferrable expenses, like rent, utilities and property taxes, of between $40,000 and $1.5 million.

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The change was intended to cover owner-operated small businesses that had been ineligible for the program due to their small payrolls, sole proprietors who receive business income directly and family-owned operations that pay family members in the form of dividends.

“Work continues around the clock to ensure the program can securely launch across over 230 financial institutions,” Morneau tweeted. “We know how important the program is to small businesses & want to launch as quickly as possible.”

Prime Minister Justin Trudeau’s visit to a Chelsea cafe in Quebec, just north of Ottawa, was meant to underscore how the 75% wage subsidy can help employers afford to rehire workers now that the economy is starting to slowly reopen after several months of pandemic-induced lockdown.

Biscotti & cie has used the program to hire back dozens of workers at the cafe and its sister operation, the Chelsea Pub.

This is the second company Trudeau has visited in as many weeks in a bid to persuade businesses to take advantage of the wage subsidy. He has been almost begging them to use it as the government tries to wean jobless Canadians off the $2,000-a-month Canada Emergency Response Benefit and transition back to work.

The wage subsidy, originally budgeted at $73 billion, has had far less take-up than the federal government had hoped. In the meantime, it has had to almost double the original budget for the CERB to $60 billion.