‘The pandemic is not over,’ but subsidies will soon be, and experts warn that both homeowners and workers will suffer

The pandemic has often seen employers and employees at odds with each other.

While government supports have provided a lifeline for businesses, they are also blamed for keeping workers at home. But the reality is more complicated.

With wage and rent subsidies running out on October 23, just four days before the Canada Recovery Benefit ends, labor advocates say the loss of these programs will affect both workers and their employers.

“It gave us a sense of security,” said Rena Kisfalvi, president of the Canadian Union of Public Employees (CUPE) Local 4055, which represents more than 1,000 Sunwing flight attendants.

Kisfalvi said Sunwing participated in the wage subsidy program until August, allowing many workers to stay home and care for children or other family members without fear of a major financial hit.

With the end of the grant, Kisfalvi said he is concerned about the impact of the fourth wave on the employees it represents.

“The pandemic is not over,” he said. “We fully agree at some point that supports like this should end, but should only end when the pandemic is over.”

As of late August, the Canada Emergency Wage Subsidy (CEWS) has provided more than $ 90 billion in support. In some claims periods, the subsidy supported the wages of up to five million Canadian employees, but that number has steadily declined as the economy reopens.

The most recent period for which the government has released data, July 4-31, had 855,380 employees whose salaries were supported by the subsidy, representing 54,370 companies. Meanwhile, the Canada Emergency Rental Grant (CERS) had delivered more than $ 6 billion as of the end of August, with 53,300 applications approved from July 4-31.

There’s also the newer hiring allowance, announced in June, that employers can access in place of the wage subsidy. The hiring allowance covers new employees or more hours for existing employees.

Unifor National Chairman Jerry Dias said it would be “foolish” for the party that is elected to end wage and rent subsidies and recovery benefits at this time.

“We are in a fourth wave,” he said. “Ending these subsidies would be incredibly irresponsible.”

Sheila Block, a senior economist at the Canadian Center for Policy Alternatives, said that when the wage subsidy ends in October, there are a number of factors that will determine the impact on workers whose wages have been supported by the subsidy.

At first glance, the answer seems simple: A loss of income for the employer means a loss of jobs or hours for employees, Block said. But there are some things that can soften the blow, he said.

One is the fact that, at least according to employers, Canada is facing a labor shortage. So, in theory at least, there will be plenty of jobs for recently laid off workers, Block said. (Of course, some experts argue that this is not a labor shortage, but a decent job shortage.)

But then there’s the unknown of the fourth wave powered by Delta, Block said.

It is particularly concerning that days after the wage and rent subsidies end, so is the CRB, he said.

“Removing the safety net at the same time that employers may be reducing employment … is absolutely a concern.”

However, the spokeswoman for the North American union UNITE HERE, Melissa Sobers, wants the subsidies to be modified to better support workers, if they are extended.

Some employers used the subsidy but still ended up laying off workers, Sobers said. He would like the requirements to be changed so that employers using the subsidy have to prioritize long-term employees.

Bea Bruske, president of the Canadian Labor Congress, agreed. He said that without the wage and rent subsidies, many more workers would have lost their jobs in the past year.

But the subsidies weren’t perfect, he said, and if extended, they should include more protections for workers.

“We want to make sure that existing employees are not replaced by new employees.”

It’s very possible that the subsidies will be extended again, Block said, a decision for a newly elected government.

Now is not the time for employers to rely on the hiring allowance, Dias said. Although things have improved in recent months, with the provinces loosening restrictions during the spring and summer, the fall and winter look bleak.

“It is as if we had peaked and now we are headed in the wrong direction,” he said, and the elections increased uncertainty. “At the very least, these elections should be forcing a discussion about visions of what the economy will look like after the pandemic.”

Block said extending trade subsidies is a difficult political issue. At some point, companies must move from life support to rehabilitation, he said, and it is difficult to know when or how to do it.

Business organizations such as Restaurants Canada, the Retail Council of Canada, and the Canadian Federation of Independent Business (CFIB) have been calling for some form of financial support for the worst-hit businesses to continue this past October.

Olivier Bourbeau, vice president of Quebec and federal affairs for Restaurants Canada, said the subsidies have allowed employers to stay open even as the industry is struggling to break even.

“These are policies that keep people working,” he said, adding that restaurants are struggling to hire people as many workers have found work in other industries.

Restaurants Canada is calling not only for subsidies to be expanded, but for sector-specific support as well. Without continued financial support, many restaurants will close permanently and many workers will lose their jobs, Bourbeau said.

“We are asking for subsidies to help us stay open and keep our employees until we can breathe.”

Corinne Pohlmann, CFIB’s senior vice president for national affairs, said that the companies that are most concerned about the termination of subsidies are, unsurprisingly, those in the sectors that have been most affected by the pandemic: arts and recreation. , tourism, hospitality. and food.

“We hear from business owners who are still quite concerned about the end of subsidies … because obviously then you have to rely more and more on incoming income to be able to keep those employees employed,” Pohlmann said.

Some employers will face tough decisions, he said, such as raising prices or cutting hours and staff.

It is not yet clear whether the hiring subsidy will be able to fill the gap left by the wage subsidy, Pohlmann said.

“I think for some it works quite well, and for others it may not be enough because they may not necessarily be in a position to add more (employees or hours).”


Leave a Comment