OTTAWA (Reuters) – Canadian firms are showing less interest than expected in a government wage subsidy program to help them survive the coronavirus crisis because the application process is complex, a government minister said.
Prime Minister Justin Trudeau announced on March 30 that businesses able to show their revenues had dropped by 30% because of the outbreak could apply for the subsidy to help retain their workers amid massive shutdowns.
Although the Liberal government budgeted C$73 billion on the subsidy – just under half the C$152 billion in total direct spending on measures to dull the pain of the crisis – official data last week showed only C$3.4 billion had been dispensed.
“(The pickup) has been slower than expected,” Employment Minister Carla Qualtrough told CTV.
“I think businesses are having to put a lot of time and effort into their applications because you have to dig in to your payrolls – who earned what and when?” she said in an interview broadcast on Sunday.
Officials are looking at ways to streamline the process of providing data, she added.
Trudeau said on Friday the subsidy would be extended by 12 weeks until the end of August and suggested the threshold for revenue loss might be dropped to below 30% to encourage more firms to apply.
Air Canada said on Friday it would cut its workforce by up to 60%. Asked why the firm had not used the wage subsidy instead of issuing layoffs, a representative said normal traffic levels would not be returning anytime soon.
Finance Minister Bill Morneau declined to say how much more Ottawa has budgeted to cover the extension.
“I think the uptake is going to pick up. I don’t think that there’s a programmatic problem … it’s more a challenge to provide the data to the government,” said Qualtrough.
Ottawa is also promising unemployed Canadians up to C$2,000 a month under a separate program.
Most of Canada’s 10 provinces have slowly started reopening their economies as public health agency data show the outbreak is slowing significantly.
The total death toll edged up by 1.9% to 5,702 on Sunday, one of the smallest day-on-day increases.
(Reporting by David Ljunggren; Editing by Nick Zieminski)
