A federal wage subsidy for employees in businesses hit hard by COVID-19 will last at least through the summer and eligibility is also being expanded to more organizations to include tax-exempt Indigenous-owned corporations or partnerships, amateur athletic associations registered journalism organizations, and private colleges and training schools.
The $73-billion Canada Emergency Wage Subsidy was set to expire in the first week of June, only a few weeks after the first payments rolled out and with only a small fraction of its budget spent.
Subsidies will now be available through to the end of August, though the legislation that created the subsidy gave the government the authority to extend qualifying periods for help to the end of September.
Take-up for the program has been below federal expectations, with less than $4 billion in benefits to date for 1.7 million workers.
Speaking outside his Ottawa residence, Prime Minister Justin Trudeau said employers now have more runway and should have confidence to resume operations slowly if they have to.
Trudeau also said the government will make adjustments to the program, including changes to the threshold for how much qualifying companies’ revenues must have declined, to ensure employers can continue getting help as business kicks back up.
“As the economy reopens, there is a danger of unintended consequences,” Trudeau said.
“If part of the eligibility criteria for getting the wage subsidy is a decrease of 30 per cent of your business, we wouldn’t want people who are getting back their business going to feel like they have to hold back on their growth, on their expansion, on their rehiring in order to be able to continue benefiting from the wage subsidy.”
Finance Minister Bill Morneau was unable to say Friday how much the extension would cost. He said much of that will be determined by the changes to be debated with employer groups and labour organizations.
The most recent federal figures on the program show payouts of around $3.36 billion to 123,642 companies.
