The federal government's wage subsidy for small and medium-sized businesses impacted by COVID-19 is jumping up to 75 per cent, Canada's Prime Minister Justin Trudeau said Friday (March 27th).
“It’s becoming clear that we need to do more — much more — so we’re bringing that percentage up to 75 per cent for qualifying businesses,” Trudeau said, speaking to reporters from his home in Ottawa. “This means people will continue to be paid even though their employers have to slow down or stop their businesses.”
Last week, Trudeau announced a 10 per cent wage subsidy but acknowledged on Friday that it wasn't sufficient.
The Canadian Chamber of Commerce is applauding the move, calling it “exactly what the doctor ordered, and what business groups have been asking for" on its Twitter account.
The PM said wage subsidies will be backdated to March 15th.
Keeping employees on the payroll
The enhanced measures will enable small to medium-sized business to keep employees on the payroll and avoid layoffs during the COVID-19 crisis.
Trudeau called small and medium-sized businesses the "backbone" of Canada's economy.
"We're thinking about that family-owned restaurant that's been around for years, [has] had many of the same employees for years. Employees who've been there through slowdowns, good times and bad times, and now in this moment of crisis they're having to lay these people off at their time of need," Trudeau told reporters.
Trudeau also said the government will guarantee bank loans of up to $40,000 for small businesses which will be interest-free for the first year.
In some conditions, up to $10,000 of the loan could be non-repayable, Trudeau said.
Additionally, GST and HST payments, and duties and taxes owed on imports, will be deferred until June, Trudeau said, noting that it amounts to $30 billion in interest-free loans to businesses.
"If you're struggling to get by right now and you have a payment due at the end of the quarter, we're going to give you more time. It will also allow you to keep the money that you would have sent to the government and use it instead for your immediate needs," Trudeau said.
Details of the program are still being worked out and more information will be released between now and Monday, Trudeau said.
Meanwhile, the Association of Canadian Travel Agencies (ACTA) is seeking $3 billion from the Canadian federal government to help support travel agency businesses and workers during the COVID-19 pandemic.
The move comes after the United States included travel agencies in a $25 billion-dollar Economic Stabilization Loan for airlines as part of a $2 trillion-dollar (USD) coronavirus relief package.
“While we are pleased with some of the financial supports announced by the Federal Government, ACTA is asking the Federal Government to support travel agency businesses and Workers in the amount of $3 billion in financial aid to weather the storm,” Wendy Paradis, president of ACTA, said in a statement on Friday. “ACTA has advised the government that it expects that Canadian travel agencies be treated equally in any sector specific aid packages."