Minister of Finance Bill Morneau responds to a question during a news conference in Ottawa, Friday, March 27, 2020. THE CANADIAN PRESS/Adrian Wyld

Canada’s 75% wage subsidy is coming, but not for several weeks: finance minister

Subsidy will cost Canada $71 billion, but push down cost of emergency benefit, Morneau said

Businesses hoping to apply for Canada’s 75 per cent wage will have to wait several weeks to get that money, according to Finance Minister Bill Morneau.

Morneau unveiled more details about the wage subsidy that Prime Minister Justin Trudeau has announced, and then updated, in recent days.

The wage subsidy will provide 75 per cent of each employee’s salary for business – of any size – that has lost at least 30 per cent of its gross revenue since this time last year due to COVID-19. Companies will have to reapply every month and Morneau said there will be “severe” consequences for anyone who tries to take advantage of the system.

The subsidy will apply to the first $58,700 of each employee’s salary and provide up to $847 a week per employee for up to 12 weeks, with a possible extension if the crisis continues. The money is available to companies of all sizes, as well as charities and non-profits, and will be retroactive to March 15.

“Funds will be available in approximately six weeks,” the finance minister said Wednesday.

Businesses will be able to apply through a Canada Revenue Agency portal “soon,” Morneau said, and money is supposed to begin flowing in six weeks. For businesses that cannot show revenue from the previous year, the previous month’s revenue may be an option. Companies that are signed up for CRA direct deposit will receive funds faster.

Companies will be required to “show what the pre-crisis income was of an employee and show that they’re paying that employee an amount up to $847 and then they will get that money returned to them from the Canada Revenue Agency.”

Morneau urged businesses to rehire workers and to top up the extra 25 per cent not being provided by the wage subsidy.

“I know in the cases they can afford to pay their workers, they will do that,” he said. “We need to get through this intact.”

The point of the wage subsidy is to get employers to keep workers on the payroll, hopefully leading to a faster economic recovery, the finance minister said. It will not be available to those who receive the Canadian Emergency Response Benefit, which is for workers who remain laid-off, or are self-employed and have no income due to COVID-19.

The wage subsidy is expected to cost $71 billion. The CERB, which provides $2,000 to workers who’ve lost their jobs as a result of COVID-19, will cost an additional $24 billion. Altogether, Morneau said these direct measures will cost around $105 billion.

“As a result of this… the deficit will go up,” Morneau said, noting this equals to about five per cent of the country’s GDP.

READ MORE: Liberals delay release of 75% wage subsidy details, costs

READ MORE: Trudeau says Parliament needs to sit to pass expanded COVID-19 benefits


@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

No active confirmed COVID-19 cases in Interior Health: BCCDC

Numbers from the BCCDC’s dashboard show 193 of the 195 COVID-19 cases in the region have recovered

Historic Hat Creek finds novel way to keep part of site open

VIP shopping experience offers people private visit to site’s gift shop

Mobile harm reduction service making weekly trips to Cache Creek

Service provides free kits, instruction, information, and referrals to those who need it

Ashcroft food bank benefits from donation as demand increases

Community Futures Thompson Country provides much-needed cash donation

March dental conference key to many of B.C.’s COVID-19 cases

Early infections from China, Iran were quickly contained

MAP: Dr. Henry reveals which B.C. regions have seen most COVID-19 cases

B.C. health officials release a first look at how the novel coronavirus has reached all corners of the province

Tla-o-qui-aht First Nation woman, 26, fatally shot by police in Edmundston, N.B.

Police were conducting a well-being check at the time of the incident

Seniors to receive up to $500 in promised COVID-19 emergency aid in early July

The Liberal government first promised the extra help in mid-May, but had to create a new system to deliver the aid

VIDEO: Revelstoke bear wanders into Animal House pet store

Staff got ready to chase it out with a broom

New study is first full list of species that only exist in Canada

Almost 40 per cent of them are critically imperilled or imperilled and eight are already extinct

Federal aid for care home systems needed ahead of second wave, advocates say

Ontario Long Term Care Association calling for more action

Horgan calls for national anti-racism program; will pitch idea to PM, premiers

Premier John Horgan said he’s horrified by the death of George Floyd in the United States

Most Read