‘Jobs at risk’: Experts fear wave of layoffs, business closures following end of federal wage and rent subsidy programs

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For nearly a year and a half as the COVID-19 pandemic raged, federal wage and rent subsidies put more than 600,000 people on employment.

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Now that those subsidies are being replaced by programs with more stringent eligibility standards, economists, business owners and industry groups worry that some of those jobs may soon disappear.

“Will all those people lose their jobs on Sunday? No, but it’s fair to say that some jobs will still be at risk,” said David MacDonald, senior economist at Canada’s Center for Policy Alternatives, as federal finance minister Chrystia Freeland announced Thursday that the Canada Emergency Wage Subsidy and Canada Emergency Rent subsidy expires on Saturday.


At the same time, Freeland announced the extension of the Canada Recovery Hiring Program until May 22. It also unveiled the Tourism and Hospitality Recovery Program, and the Hardest-Hit Business Recovery Program to help businesses in the worst-hit areas. But critics say the eligibility standards for the new programs will make it too difficult for many struggling businesses to assemble.

Small businesses such as restaurants and gyms, which are still subject to capacity restrictions in some parts of the country, are in dire need of help, said Ryan Maloof, Ontario regional director for the Canadian Federation of Independent Business. If they didn’t get it, they would ask themselves some tough questions, he said.

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“Can we afford to level our staff where they are? Can we afford to provide the same level of services that we do now?” Mallo said business owners are asking themselves.

Many, Mallow said, will weigh on whether or not to close for good.

“It will make some of those decisions very, very real,” Mallow said.

Mark Agnew, senior vice president of policy at the Canadian Chamber of Commerce, said the programs that are ending help prevent the complete collapse of many businesses across the country.

Agnew said, “While these subsidies have been important to our members, government support is still important for many businesses.

“There are still a lot of places with capacity restrictions,” he said. “We agree with the idea of ​​more help for the hardest-hit areas.”

Eric Joyal, president of Askari Hospitality Group, said Freeland’s announcement was a mixed blessing.

“It is great to get sector-specific assistance. But if they set the bar so high that only 20 or 30 percent of businesses qualify, it’s not going to accomplish what they wanted. The devil is in the details,” said Joyal.

Joel said businesses that need to show a 40 percent drop in revenue order to qualify for the hospitality and tourism subsidy, those who need it won’t get the money. (The hardest-hit-sector program requires businesses to show a 50 percent revenue decline.)

“A 30 per cent fall in revenue is a death knell in an industry with a five per cent profit margin. Forty is a very harsh standard,” Joyal said, adding that wage and rent subsidies were an important lifeline for Askari’s restaurants and bars during the pandemic.

“Wages and rent subsidies are the only things that have kept many places alive. Had they not been there, 80 percent of independent restaurants across the country would have gone,” Joyal said.

There’s no doubt that stricter qualification standards mean some restaurants will close for good, said Olivier Bourbeau, federal vice president of Restaurants Canada, an industry association.

“We have been seeking sector-specific assistance since the start of the pandemic, so in that sense, (Thursday) was a good announcement. But unfortunately, they set the bar too high for too many places to qualify. A lot of places will be closed,” Bourbeau said.

The idea of ​​collecting subsidies is very disappointing for restaurant owners, who take pride in their entrepreneurial spirit and independence, Bourbeau said.

“Our members don’t want charity. They just want to survive,” Bourbeau said.

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