In its throne speech Wednesday, the Liberal government promised to extend the pandemic wage subsidy, create a million new jobs and establish a national child-care strategy, signalling a shift toward longer-term support for Canadian business that was welcomed by business leaders.
Two of the more popular announcements with the business community included the extension of the wage subsidy into summer 2021, as well as the promised expansion of the Canada Emergency Business Account, which currently provides interest-free loans of up to $40,000 to small businesses and not-for-profits, with a certain part being forgivable.
Trevin Stratton, chief economist with the Canadian Chamber of Commerce, said he was pleased by the promise of a comprehensive child-care and early learning system, which he says will help get women, who have been hardest-hit by job loss, back into the workforce.
Recent data shows that women, especially marginalized women, have suffered higher levels of job loss than men, and are recovering at a slower rate.
Stratton was also happy to hear the speech, which was read by Gov. Gen. Julie Payette, mention support for devastated sectors like tourism and the arts.
Corinne Pohlmann, senior vice-president of national affairs with the Canadian Federation of Independent Business (CFIB), said she was open to the government’s promise to create a million jobs to undo the damage pandemic-related job loss has done, but added training will be important to ensure there are people qualified to fill those jobs.
Stratton also said the details on how the government does this will be important.
“What’s going to be necessary to get back those last million jobs is not just reopening, but job creation,” he said. “It’s going to require substantial private sector investment.”
The speech announced a campaign to create a million jobs using direct investment in the social sector and infrastructure, immediate training, and hiring and retention incentives.
The wage subsidy, which was set to shrink and then end by December, will be extended through the summer of 2021, and the Canada Emergency Business Account (CEBA) will be expanded.
Pohlmann said that many small businesses were dreading the end of the wage subsidy, and will be relieved to hear that it’s being extended, as well as the CEBA being expanded.
However, Pohlmann said she was concerned about a program that wasn’t mentioned — namely the Canada Emergency Commercial Rent Assistance (CECRA) program, which provides rent relief to small business.
After the government’s rent relief program failed to cover many small businesses due to its stringent eligibility criteria and requirement that landlords apply, the business community had been asking the government to find another way to distribute the unused funding to hard-hit businesses.
Pohlmann said she’s hopeful that the expansion of CEBA will address the issue of rent for businesses, especially as the summer season winds down.
Aleem Kanji, a political strategist who works with small businesses, agreed, saying that’s likely what will happen.
“I think the government is wanting to streamline programs, as we head into the second phase of the pandemic,” he said.
Rent is the number one fixed cost for small businesses, he said, so to have more accessible support to rent relief would be a big win for business owners.
Both Kanji and Pohlmann also said they were concerned that there was no mention in the speech of the tax increases for businesses scheduled for Jan. 2021.
“We’ve been pushing for them to delay it or put it off for another year,” said Pohlmann.
The speech echoed earlier indications that a reform of the Employment Insurance system is in the cards, saying that the pandemic “has shown that Canada needs an EI system for the 21st century, including for the self-employed, and those in the gig economy.”
At the beginning of the pandemic, it became obvious the outdated system couldn’t handle the unemployment caused by COVID-19, necessitating the creation of the Canada Emergency Response Benefit (CERB).
On Sept. 27, EI is scheduled to take on many of those CERB recipients, but with significant temporary changes.
But Pohlmann said while it’s clear that there needs to be more support for self-employed, freelance and gig workers, she’s unsure whether the EI system is the best place from which to administer that support.
“We’re going to have to sort of watch closely and obviously try to make sure the government doesn’t make rash decisions without proper consultation.”
Stratton said the business community will be looking at not just the economic promises made during the speech, but also the government’s strategy for preventing the spread of COVID-19.
“What the business community is looking for is a comprehensive strategy to get ahead of the pandemic, as opposed to reacting to it as we go along.”
The economic impact of COVID-19 has already been worse on Canadians than the 2008 crisis, the speech noted. “Canadians should not have to choose between health and their job. Just like Canadians should not have to take on debt that their government can better shoulder,” it said.
The speech included references to the “She-cession,” the fact that women’s participation in the workforce is at its lowest in three decades. The promise of nation-wide child care is one of several points meant to address that undoing of progress. As well, the government promised a task force aimed at facilitating a feminist and intersectional recovery.