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Large business, non-profits, charities eligible for wage subsidy, Trudeau says

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OTTAWA — Prime Minister Justin Trudeau says large and small businesses, non-profits and charities will all be eligible for a 75-per-cent subsidy on wages meant to cushion the blow from the COVID-19 pandemic.

Employers will have to show that their revenues have fallen by at least 30 per cent due to COVID-19.

The wages the subsidy covers will be capped at $847 a week, he says.

Speaking outside his Ottawa residence, Trudeau says the size of the company will not bear on whether it qualifies for the help, in line with what other countries have done.

He is asking 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.

Trudeau says companies that can pay their employees without federal help should do so, warning of consequences for businesses caught abusing federal financial aid — although he isn't providing details.

He says the program will have to rely in some measure on employers sticking to the honour system when applying for help. He adds there will be an oversight system, but isn't providing details today.

"We are trusting you to do the right thing. If you have the means to pay the remaining 25 per cent that's not covered by the subsidy, please do so," Trudeau said.

"And if you think this is a system you can take advantage of or game, don't. There will be serious consequences for those who do."

More of the details, including the estimated cost of the measure, will be available tomorrow, Trudeau said.

The details unveiled today came after days of criticism from a broad swath of business and labour groups over the original proposal of a 10 per cent subsidy, which they said fell well short of what was needed to avoid mass layoffs.

The federal bailout package to date is now valued at more than $200 billion, including $52 billion in direct spending, $85 billion in tax deferrals for individuals and businesses, and $65 billion in loans. Last week, TD Economics estimated the increased wage subsidy could add $25 billion in direct spending to the total.

Information from the Canadian Federation of Independent Business on Monday suggests 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.

The CFIB suggests one-quarter of its members don't think they can cover some of their fixed costs, such as rent and leases, for April.

Trudeau isn't saying if the government is going to help with those costs, only that the Liberals will listen to businesses and non-profits that have problem and try to address them.

This report by The Canadian Press was first published March 30, 2020.

The Canadian Press

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