Ottawa says two of its key COVID-19 relief programs aimed at helping businesses – the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) – will continue at their current levels until June 5.
Prime Minister Justin Trudeau announced Wednesday that the wage and rent subsidies will continue at current support levels, as Canada is "not out of the woods yet" in the fight against the coronavirus pandemic.
"This isn’t the time to pull back on support for workers or business owners," Trudeau said.
"It’s the time to see people through what is hopefully the final stretch of this crisis and it’s the time to get the whole economy ready to come roaring back. So that’s exactly what we’re going to do."
The Canadian Federation of Independent Business (CFIB), an industry lobby group, had called on the federal government to provide more details about the future of the two programs earlier this week, as eligibility requirements for CEWS and CERS were scheduled to change on March 14. According to CFIB's most recent survey, more than half of members (53 per cent) are relying on CEWS, and 27 per cent are using CERS.
CFIB president Dan Kelly said Wednesday that the extension was "good news for small business owners."
"This gives businesses some level of certainty for the coming months in knowing how much support they may be able to access as they make business decisions amid continued restrictions," the CFIB said in a statement.
"Last month, CFIB revealed that one in six business owners is at risk of permanent closure, putting 2.4 million Canadian jobs in jeopardy. Today’s announcement gives those business owners a lifeline, but more needs to be done to help small businesses bridge to better times."
The Canadian Chamber of Commerce echoed the CFIB's statement. Alla Drigola, the Chamber's director of parliamentary affairs, said in a statement that the support provides businesses with much-needed certainty to get through the spring.
"Now, it will be important to ensure that these programs are not wound down too quickly for businesses in the sectors that have been hardest hit and will take longer to recover," Drigola said in a statement.
"These sectors include tourism, travel, food services, accommodations, and the events sector, among others."
CEWS, one of the government's most popular programs, covers up to 75 per cent of employee wages for eligible businesses. Finance Minister Chrystia Freeland said Wednesday that the estimated cost of the program up until March 13 will be $83.53 billion, and from March 13 to June 5 it will cost an additional $13.9 billion.
CERS funds up to 65 per cent of rent or mortgage interest payments for businesses that have seen revenue decline by at least 70 per cent. Companies that have had revenue fall by less than 70 per cent receive decreasing levels of support in line with revenue. The cost of the CERS program up until March 13 will be approximately $4.4 billion, Freeland said, and from March 14 to June 5 it will cost an extra $2.1 billion.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.