Government to Spend $7.4 Billion Transitioning to New Pandemic Support Programs

The Liberal government says several existing pandemic support programs for individuals and businesses will end this weekend, while billions of dollars will be spent transitioning to new “targeted measures” leading into the spring.

Deputy Prime Minister and Finance Minister Chrystia Freeland said in Ottawa today that Canada is in a “new phase” following the darkest days of the pandemic and has recovered 100 percent of the jobs lost to the crisis.

Ms. Freeland said that with high vaccination rates and the economy rebounding, the new measures — which come with an estimated price tag of $7.4 billion between Oct. 24 to May 7, 2022 — should mean the “final pivot in delivering the support needed to deliver a robust recovery.”

Targeted support for the tourism and hospitality sector

Five key support programs were set to expire on Oct. 23.

Two that provide help to businesses — the Canada Emergency Rent Subsidy and the Canada Emergency Wage Subsidy — will come to an end as scheduled.

Ms. Freeland said the government will extend to May 7 the Canada Recovery Hiring Program — a subsidy that covers up to 50 percent of the extra salary costs of eligible businesses and was set to expire on Nov. 20.

Pointing to an “uneven recovery” that has seen the economic activity of some sectors restricted by “health measures that are saving lives,” Ms. Freeland said Liberals will bring in new targeted programs that will run until May.

The first would provide the hard-hit tourism and hospitality industry with wage and rent subsidies until May — something Liberals promised on the campaign trail this summer. The Tourism and Hospitality Recovery Program will provide support to hotels, restaurants, travel agencies and tour operators at a subsidy rate of up to 75 percent.

There will also be another measure — the Hardest-Hit Business Recovery Program — to provide wage and rent subsidies of up to 50 percent to businesses that can show “deep and enduring losses,” Ms. Freeland said.

Applicants for the tourism and hospitality program must show average monthly revenue losses of 40 percent over the course of 12 months of the pandemic and a loss of 40 percent in the current month.

Those applying for the “hardest-hit” program must demonstrate an average monthly revenue loss of 50 percent and a loss of 50 percent in the current month.

Businesses that face temporary new local lockdowns will also be eligible for “up to the maximum amount of the wage and rent subsidy programs” regardless of losses over the course of the pandemic, says the Department of Finance.

Canada Recovery Benefit to end

Of the three other existing programs that support individuals, one — the Canada Recovery Benefit —  will expire on Oct. 23.

The CRB largely replaced the Canada Emergency Response Benefit last year and provides income support for those not covered by employment insurance.

In its place, the federal government says it will launch a “Canada Worker Lockdown Benefit” which will pay $300 per week to eligible workers subject to a provincial lockdown, including those ineligible for EI.

Ms. Freeland said the new lockdown supports will act as an “insurance policy” so that provinces can make difficult choices when they need to and know workers will be supported.

“If the fourth wave or some unexpected additional wave were to hit us, we want public health authorities to know and we want workers to know that that support will be there,” she said. “It will be there and we’ll be able to snap back in place for workers.”

Two other existing supports for individuals  — the Canada Recovery Sickness Benefit and the Canada Recovery Caregiving Benefit — will be extended until May, she said, with two weeks added to the maximum duration of the benefits.

In an interview with CBC’s Power & Politics, Employment Minister Carla Qualtrough said circumstances have changed since the programs were introduced.

“We think that the CERB and the recovery benefits did what they were supposed to do,” she told host Katie Simpson.

“We think now that the public health and economic circumstances of today are quite different, and so we think it is an appropriate time to transition away from these broader measures to more targeted support and more kind of regional lockdown support for business and workers.”

She added that the government would be open to reintroducing broader benefits in the future if things change.

Business associations express relief, concern

The Canadian Federation of Independent Business (CFIB) praised the extension of the hiring program and said it’s relieved to learn that supports will stay in place. It also said in a media statement that it fears eligibility thresholds for new programs will put them “out of reach for many.”

“Small businesses that see revenues lower by one-third will not be able to access the previous wage and rent subsidies – potentially signing them up to lose money every single day they are open and putting them at risk of permanent closure,” said CFIB president Dan Kelly.

“CFIB will be pushing the federal government to be flexible in how it defines businesses in the tourism, restaurant and hospitality sectors for its targeted programs. Gyms, recreation facilities like bowling alleys, dance studios, dry cleaners all continue to suffer massive COVID-related losses but may be ineligible for the higher levels of support.”

Mark Agnew, a senior vice president at the Canadian Chamber of Commerce, said in a media statement that businesses in hard-hit sectors continue to face restrictions that keep them from operating at full capacity, and need continued support.

“The new retooled government support programs announced today will allow businesses who continue to be impacted by public health restrictions to survive until they can recover,” he said. “This is the fair thing to do for businesses that are playing their part to protect public health.”

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