Almost 40% of businesses say federal assistance won’t help them, CFIB poll says

by Morinville News Staff

A survey conducted over the weekend by the Canadian Federation of Independent Businesses indicates 37 per cent of businesses won’t be helped by the federal government’s Canada Emergency Wage Subsidy.

Twenty-nine per cent of businesses surveyed said the funding would help them avoid further layoffs or recall staff, while the remaining 21 per cent were unsure.

The Government of Canada’s CEWS program subsidizes approved employer’s payroll at 75% of wages earned by employees, up to a maximum of $847 per week.

The program runs from Mar. 15 to June 6, and employers who are individual, taxable corporation, partnership consisting of eligible employers, non-profit organization, or registered charity are eligible for the program. However, they must have seen a 30 per cent drop in revenues for March, April or May compared to 2019 to qualify.

“The federal government took a big step by increasing the wage subsidy to 75 per cent and opening it up to businesses of all sizes and structures. It will help many, but there are still a lot of businesses in dire need of help that report they will not be able to access it,” said CFIB president Dan Kelly. “In order to meet the program’s objective of helping businesses retain staff and avoid layoffs, more work remains to be done to make this program successful.”

For the 37 per cent of businesses reporting CEWS would not help them retain staff, more than a third said the program comes too late as layoffs have already happened and can’t be reversed easily. Almost a quarter said they are worried they may not be able to prove the 30 per cent drop in revenue required to qualify, and 17 per cent said they would not qualify based on the current conditions and that the wage support would not be enough to retain jobs.

Of the 29 per cent whol say the program will help their business, 44 per cent said it will help them retain some staff still on the payroll, and 35 per cent said it will help them retain all staff. Twenty-nine per cent of the businesses polled said they would be able to recall some laid off staff, and nine per cent said it would help them recall all laid off staff

“Businesses are facing a lot of cost pressures right now. Only 19 per cent remain fully open, down from 21 per cent last week. We’re hoping the government won’t be too prescriptive when it interprets who qualifies for the subsidy,” said CFIB’s senior vice-president of national affairs Corinne Pohlmann. “Some firms have very tight profit margins, which makes it very difficult to continue to operate with a 30 per cent drop in revenues. New businesses, seasonal businesses, firms facing increasing costs and high-growth firms believe it will also be difficult to prove they meet the requirement.”

CFIB is making several recommendations to the federal government, urging officials to take quick action.

The business organizations is asking the feds to eliminate the 30 per cent test for small and medium-sized firms or the need for a test for firms ordered by governments to fully or partially close. They are also asking the feds to create a different test to ensure that new or rapidly growing firms can access the support as well.

CFIB is also seeking flexibility for firms with special circumstances, including those affected by major events in 2019, where accounting rules do not allow access, or facing giant increases in costs.

The business group is also seekign a lowering of the 30 per cent test to 15 per cent for March to reflect that the major impacts on business began in mid-March.

“The vast majority of small businesses have been deeply affected by COVID-19. They are worried for their employees and about their ability to ever reopen,” Kelly said. “Right now, we need to quickly put in place the measures that will allow us to preserve our small businesses and keep them connected to their employees so we can recover once the crisis is over.”

A complete list of Federal government programs for businesses can be found at https://www.canada.ca/en/department-finance/economic-response-plan.html#businesses

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