OTTAWA - The federal government has unveiled a $7-billion redesign of pandemic aid for businesses and individuals that kicks in Sunday, which would cut support to almost 900,000 workers and potentially put thousands of jobs at risk in the near-term.
The Liberals have long said the federal wage and rent subsidies, along with benefits like the Canada Recovery Benefit, were always designed to be temporary to get the country through the economic crisis COVID-19 caused.
After a last-minute extension this summer, Finance Minister Chrystia Freeland said Thursday most would not be given an extra month of life past Oct. 23, but reshaped until late November.
The country is in a different phase of the COVID-19 pandemic, Freeland said, noting the labour market has recovered all the jobs lost last year and vaccination rates are rising.
But unemployment remains high, companies face labour shortages and some sectors are further from recovery, which is why aid is being redone and targeted based on need.
“The best possible support for a Canadian is actually a job,” Freeland said, “and that's what these programs are designed to really promote.”
Wage and rent subsidies for businesses will be more generous and targeted to still-hurting tourism and hospitality sectors, so long as they can prove a prolonged and deep revenue loss.
Restaurants Canada told its members it was happy for ongoing help, but disappointed that eligibility requirements will leave many operators out in the cold this winter.
The Canadian Federation of Independent Business said it would push the Liberals to let a wider array of businesses qualify for help, such as gyms, bowling alleys and dance studios, as well as businesses that launched after March 2020.
The government is also looking to extend to May a hiring credit for companies that add to their payrolls by boosting wages, rehiring laid-off workers or new hires, and doesn't require as deep a revenue loss to qualify.
“If economic growth is really as strong as (the Finance Department) forecasts, then there is not a strong need for the expansion of this program,” economist Miles Corak wrote on Twitter.
Income support measures for Canadians unable to work because of COVID-19 will only flow to those off the job because of a government-imposed lockdown, but not if a person refused to adhere to a vaccine mandate.
The $300 weekly lockdown benefit would equal what the CRB provides to unemployed workers, over two million of whom have used the CRB since last year and received $27 billion in aid.
An analysis from the Canadian Centre for Policy Alternatives said the end of the CRB would leave some 880,000 people without income support starting Sunday, which the Montreal-based National Council of Unemployed Workers noted would hit self-employed and gig workers hardest, since neither qualify for EI.
The Liberals have promised to help those workers access EI, but not until at least 2023.
“It's not so much that the CRB should continue, or shouldn't continue or that this lockdown benefit should exist or shouldn't exist, but rather that we should have a longer-term solution to this rather than a gap year in essence for self-employed workers, which is in essence what we're going to see,” said CCPA senior economist David Macdonald.
Macdonald also said thousands of jobs could be in peril as the wage subsidy is narrowed, but any layoffs would likely move workers onto employment insurance.
Freeland said there is still a need for the benefits to help parents stay home to care for a sick child, or to stay home themselves if sick, which is why the government wants to extend them past next month and add two more weeks of eligibility.
The new measures will exist until Nov. 20, after which the Liberals will need support from enough opposition MPs to enact the proposals unveiled Thursday that Freeland said would cost $7.4 billion through May 7.
NDP Leader Jagmeet Singh in a statement suggested his party would push back against an end to the CRB to make sure “people aren't left to fend for themselves.” Conservative finance critic Ed Fast said his party wouldn't support the CRB living past Nov. 20 because of “skyrocketing inflation and ongoing labour shortages across the country.”
The House of Commons returns Nov. 22, which doesn't leave much time for MPs to approve a new aid package before Parliament starts its winter break in mid-December.
“The last thing that we want to see is brinksmanship and games that are going to stretch this out to the 11th hour,” said Mark Agnew, senior vice-president policy with the Canadian Chamber of Commerce. “It needs to pass in a fairly expeditious manner.”
This report by The Canadian Press was first published Oct. 21, 2021.