A federal wage subsidy to cover three-quarters of salaries will help save local jobs, predicts the Red Deer and District Chambers of Commerce.
“It is important that the feds have included all small, medium and large businesses as well as our non-profits,” said chamber executive director Rick More.
“A very high percentage of businesses have experienced a 30 per cent reduction in revenue so will easily qualify.”
On Monday morning, Prime Minister Justin Trudeau announced that a wage subsidy for small- and medium-size companies that had lost 30 per cent of their revenues because of COVID-19 last week will be extended to large companies as well. Company size or number of employees will not matter, an approach other countries have taken with their plans.
The wages the subsidy covers will be capped at $847 a week and backdated to March 15.
Trudeau asked companies that get the subsidy to rehire workers laid off over the last two weeks, and ensure that all the money through the program goes to employees. Companies that can afford to pay their employees should continue to do so, warning of unspecified consequences for businesses caught abusing federal financial aid.
The program replaces a widely criticized 10 per cent, three-month wage subsidy initiative announced on March 18.
More expects the subsidy will help businesses with their short-term planning.
“With the unknowns of COVID-19 we can only attack the issues short term. Obviously business and their employees need assistance now which is taxing administration to get financial support effectively.”
The federal bailout package is so far is now valued at more than $200 billion, including $52 billion in direct spending, $85 billion in tax deferrals and $65 billion in loans. TD Economics estimated last week the wage subsidy could add $25 billion.
More said the government will have to step up with more help as the economy enters the recovery phase.
“As we come out of this, there will need to be other initiatives to regain economic confidence,” he said, adding preparations will also have to be made to reduce the impact of future challenges.
“We need to learn from this and have to be more diligent in preparedness to activate roles and scenarios politically, administratively, and personally.
“Yes, this is like no other situation we have ever encountered so reaction times are so crucial. We will beat this and come out stronger in the long run.”
Red Deer Construction Association Gary Geis also welcomed the wage support.
“Any support that our government provides during this time period is welcome to our local industry,” said Geis. “We will have to continue to sift through the details and ensure that the program supports all of those sized companies.”
Providing the wage subsidy to companies of all sizes that experience a decline in revenue should help prevent further layoffs and provide much-needed relief to employers and employees, said Goldy Hyder, president and CEO of the Business Council of Canada.
Dan Kelly, president of the Canadian Federation of Independent Business, said in a statement that keeping administrative requirements light should ensure support can get quickly to the businesses that need it.
Both groups said they would be looking for more details, including whether there will be a cap per employer over the duration of the program.
“The wage subsidy is the single best measure to help Canada prepare for a quick recovery the minute the emergency phase of the pandemic is over.”
But the CFIB also warned Monday that financial issues for other businesses are mounting. The organization suggested that one in five small and medium-sized businesses remain open during the economic shutdown linked to COVID-19, while two in five are worried about having to permanently close.
With files from The Canadian Press