Businesses call for wage subsidy increase as companies forced to close

Businesses call for wage subsidy increase as companies forced to close
Monday’s announcement that non-essential businesses in Ontario will be shut down due to the COVID-19 pandemic is prompting business organizations to reiterate their calls for a better wage subsidy for workers.

The shutdown, which takes effect Tuesday at 11:59 p.m., was announced by Premier Doug Ford. Essential services like grocery stores and pharmacies, as well as LCBO outlets, are expected to remain open. The government said it would release Tuesday a full list of businesses permitted to stay open.

The fact the government didn’t immediately release the list has led to chaos and confusion among businesses, said Julie Kwiecinski, director of provincial affairs (Ontario) for the Canadian Federation of Independent Business. She said Monday’s announcement had “precipitated a flood of calls” to her organization’s business counsellors who were unable to provide answers.

“We understand it’s a health crisis, but it’s also an economic crisis,” she said. “I can’t stress enough how much we want to work with government. We recognize the challenges, but this is important information that businesses need to know.”

The CFIB is one of four Canadian business organizations that called on governments over the weekend to cover a greater portion of the incomes of workers who have been laid off, in the form of a wage subsidy.

The federal government has proposed a 10 per cent wage subsidy for small businesses, but the business organizations said that Canada should be mirroring what has been done in some European countries, where governments cover up to 80 per cent.

“We also ask governments at all levels to support our efforts by postponing any increases in taxes, non-essential new regulations, and unnecessary consultations that take us away from this mission,” said a statement released over the weekend by the CFIB, Business Council of Canada, Canadian Chamber of Commerce and Canadian Manufacturers and Exporters.

“Businesses and governments need to be focused 100 per cent on the current crisis, leaving other priorities aside until the crisis abates.”

Kwiecinski told the Star that keeping employees on a business’s payroll ensures that the recovery happens that much faster once businesses are permitted to open again.

“You don’t want to start at ground zero where no one is working and has to be re-hired,” she said.

The call for a better wage subsidy is echoed by the Ontario Chamber of Commerce, where president and CEO Rocco Rossi said governments should also be looking at what countries like Denmark are doing, where the government is subsidizing 75 per cent.

“We want to make sure at the provincial and federal levels that as we starve the virus, we don’t starve the economy permanently,” he said. “This isn’t going to be a thing of weeks, it’s likely months.”

He said keeping workers on the payroll, rather than pushing them over to EI, is the most efficient way to keep people afloat.

“A 10 per cent wage subsidy is simply not moving the dial,” he said.

Canadian job losses could soon jump to almost 3 million, expert says

The Ontario government had already begun limiting the operations of some businesses prior to Monday’s announcement. For example, in-room dining was banned in restaurants and bars in a bid to limit the spread of COVID-19. Takeout from those establishments is expected to still be permitted during the shutdown.

The shutdown of non-essential businesses will last 14 days, but the government has the option of extending it.

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“This was a tough decision, but the right decision, as this is no time for half measures,” Ford said in a statement Monday. “But I have said from day one we will, and we must, take all steps necessary to slow the spread of COVID-19.”
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