Federal Government Passes Wage Subsidy Legislation

Wage Subsidy Legislation Passes

The federal government met for a rare emergency sitting on Saturday during the Easter long weekend to unanimously pass legislation bringing the Canada Emergency Wage Subsidy into law. The Bill passed the House of Commons around 6:00 pm on Saturday. The Senate concluded its review of the bill a few hours later and the bill received Royal Assent Saturday night.

The $73 billion measure is the largest Canadian economic policy since the Second World War, and will provide a 75% wage subsidy to businesses, not-for-profits and charities for the 12-week period between March 15 and June 6. The legislation confirms the changes to the program announced on April 8 (for detailed analysis, see StrategyCorp’s update).

With the passage of the Bill, the government can move on to launching the program, anticipated within the next two to five weeks, and revealing more details on the application process, which will be accepted through the Canada Revenue Agency’s My Business Account portal.

On the Floor in the House of Commons

The Prime Minister attended the session, using his speech to call on all Canadians to play a role in responding to the threat of COVID-19 and safeguard the collective future, particularly highlighting the vulnerability of Canada’s seniors.

Conservative Leader Andrew Scheer emphasized the need for regular opportunities to hold the government accountable for its response, noting concerns that the government was slow to respond to initial intelligence on COVID-19, and provide constructive solutions to improve the government’s response to the pandemic.

Bloc Quebecois Leader Yves-Francois Blanchet called for vigilant cooperation in the government’s response, as well as highlighting concerns regarding the arrival of Temporary Foreign Workers in Canada.  Ensuring a strong social safety net, including opening up eligibility of the CERB and ensuring capacity for Indigenous communities to respond to COVID-19, are key elements of the response for NDP Leader Jagmeet Singh, along with advocating for banks to reduce credit card interest and pause mortgages and working with the provinces to pause rent. The Green Party’s Elizabeth May applauded the spirit of collaboration in the response, observing that through the pandemic, Canadians have discovered what really matters.

Enhancing Parliamentary Accountability

The Saturday sitting was a result of negotiation between the government and opposition parties to address not only the legislation, but how the House of Commons, as an institution, will function as the pandemic continues. The House of Commons also unanimously supported additional measures to enhance Parliamentary oversight of the government’s COVID-19 response:

• Three more Standing Committees will be permitted to meet on a weekly basis on the COVID-19 response:
  • Government Operations and Estimates
  • Human Resources, Skills and Social Development and the Status of Persons with Disabilities
  • Industry, Science and Technology
• The Standing Committee on Procedure and House Affairs will study and report by May 15 on modifying Parliamentary procedures, including consideration of virtual sittings of Parliament
• The Auditor General will examine elements of the government’s response and report by June 1, 2021

Similarly, the Senate has established and mandated two of its committees – National Finance and Social Affairs – to meet by videoconference or teleconference to study the government’s response. The Senate also agreed to set up a special committee to study the impacts of the COVID-19 pandemic by October 2020.

Following today’s extraordinary sitting, the House of Commons remains adjourned until Monday, April 20 and the Senate until Tuesday, April 21. However, the House can be brought back at any time before then, if party leaders request it. The adjournment can also be extended until a future date, if all four party House Leaders agree to it.

Debate Reveals Outstanding Concerns with Government’s Response

Beyond the wage subsidy, the House has unanimously called on the government to address gaps in its support programs without delay, including:

• Addressing gaps in the Canada Emergency Response Benefit to address students, owner/operators, those who receive a modest income from part-time work, royalties and honoraria for volunteer emergency service, and that, in addition the government work to ensure essential workers who receive low wages will receive additional income support
• Implement, in the short-term, support measures for Canadian SMEs, which will be partially non-refundable, with the primary objective of maintaining jobs and reducing debt related to fixed costs, while maintaining access to liquidity in the form of loans.

In debate, these and other issues were discussed, identifying gaps in the government’s broad policy approaches to the pandemic.  Throughout, government reiterated its commitment to considering to additional measures to enhance the government’s economic response, indicating further commitment to iterative program development and adjustments in the coming days and weeks.

Canada Emergency Wage Subsidy

• In terms of timing, the program is expected to be made available within 2-5 weeks, with the government hoping to launch it sooner rather than later
• Finance Minister Bill Morneau also clarified that while businesses are encouraged to top up salaries, the legislation does not force them to do so in case it prevents businesses from keeping people on payroll or bringing back employees who have been laid off

Canada Emergency Response Benefit

• As addressed in the House motion, the federal government is working to address gaps in the CERB as quickly as possible, but the federal government was not able to give specific timelines on adjustments to the program
• Employment Minister Carla Qualtrough confirmed that any changes to the eligibility criteria would require a legislative change (which would involve recalling Parliament), while regulatory changes would be required to establish an income threshold for accessing CERB (i.e. to permit some part-time work, or reduced incomes)
• Additional considerations are being given to ensure that the CERB can be accessed by seasonal workers, as well as ensuring clarity around the interaction between CERB and EI

Canada Emergency Business Account

• Concerns were raised on the payroll requirements for the interest-free loans to small businesses, and ensuring that supports were available to sole proprietorships
• Government is also considering additional credit support in the coming days and will continue to listen to the needs of businesses to ensure they are supported throughout the crisis

Supporting Key Sectors

Despite the federal government promising action to support key sectors impacted by the economic downturn, the government has not yet implemented sector-specific strategies, instead highlighting access to the emergency benefit, wage subsidy and credit support for all sectors, and looking to see whether specific sector supports are required.

• Energy: Both the Conservatives and the Bloc Quebecois raised the issue of sector support. The federal government has indicated it is looking at other things they can do to support the sector, but did not make any commitments to support for the sector
• Tourism and Hospitality: The federal government has made changes to ensure that seasonal companies can access programs, but remain open to subsequent changes
• Agriculture: Concerns have been raised on both the challenges facing producers across sectors (dairy, livestock, horticulture, and canola exports) as well as the shortage of CFIA inspectors for processing plants