Canada extends wage subsidy to end of August; reconsidering 30%-loss threshold

Ottawa will officially extend the wage subsidy program by three months to the end of August, Prime Minister Justin Trudeau said this morning.

Trudeau said the federal government decided on the move because of the coming reopening of the Canadian economy, which may require some companies to start rehiring employees in ernest.

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“Today, a lot of places are looking towards reopening,” he said at his daily press conference today. “And they need to be able to bring back workers or even hire more as this happens… Business owners, please take confidence from this announcement. You now have some runway to catch your breathe as you get restarted.”

Trudeau also urged businesses to seriously reconsider rehiring workers if any were let go during the COVID lockdown. Previous, there have been reports that Ottawa has not seen the level of rehiring it wanted to see through the emergency wage subsidy program, but Trudeau said it does not appear to an issue stemming from the program’s roll-out itself.

“I think it’s a reflection that this is an unprecedented situation, and there is a lot of uncertainty about what the coming months might bring,” Trudeau said. “As businesses figure out when they might be able to reopen… they are busy trying to juggle a whole bunch of different factors that they have very little window into.”

Also, Trudeau said Ottawa is looking at the potential impact of the wage subsidy program on companies expanding their staff where possible - and that government officials may revisit and adjust the 30%-revenue-loss threshold requirement currently needed for the program. Ottawa will consult business and labour leaders on the issue over the next month, Trudeau said.

“As businesses start up, needing a decline shouldn’t be a barrier to growth,” he noted.

The topic of the economic reopening dominated Trudeau’s Friday press conference, with questions focusing on Ottawa’s plan for rolling out wide-scale COVID testing and contact tracing as the movement of people increases.

Trudeau said he met with provincial premiers on Thursday evening on that topic, but did not announce any specific timeline for launching a national contact-tracing protocol.

“We all understand that moving forward with a massive scale up of testing capacity right across the country and contact tracing that goes beyond our own regions and jurisdictions will be important, particularly as the economy reopens and Canadians start to carefully travel across provincial borders,” Trudeau said. “… There will be more travel, and we need to make sure we do have coherence in our approach on both testing and contact-tracing.”

Ottawa also announced a separate 450 million in support of universities and educational institutions on wages. The funding will be distributed through existing federal grant mechanisms, Trudeau said.

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