The Federal Government Will Extend Pandemic Lifelines Into September and Introduce a New Benefit for Struggling Companies

In the face of a catastrophic third wave of COVID-19, the federal budget will move to extend all the main pandemic support programs until the coming fall, and also create a completely new benefit that subsidizes employers for hiring more people or increasing the hours their employees work, the Star has learned. Finance Minister Chrystia Freeland will roll out a $12-billion extension to two key programs that have been a lifeline for many businesses hit by the pandemic: the emergency wage subsidy and the emergency rent subsidy and lockdown support. 

She is also setting up an exit strategy designed to wean companies off the supports and quickly into hiring mode once the pandemic restrictions ease. Starting in June, the Canada Recovery Hiring Program will be made available to recipients of the wage subsidy in the hopes of shifting them off the payroll support and into hiring new employees or increasing the hours of existing employees. It’s a strategic move that comes with a six-month timeline and pushes struggling companies and their employees to use that time to figure out how they’ll position themselves for a post-pandemic world. The program would replace the wage subsidy that companies are receiving and instead offer them up to $1,100 per new employee for every four-week period.

But it won’t last forever. The budget foresees an end to the program in November 2021, by which time the pandemic will be presumed to have been pushed aside enough for the hardest hit companies to get back to a more regular existence.

Still, government insiders point to frequent changes to the pandemic supports over the past year as proof that they’re willing to extend, redesign and enrich programs as the pandemic economy demands. For now, though, given the pace of contagion but also the pace of vaccination, they see a need to take the key programs that were set to expire in June and extend them for a few more months. The budget would have the wage subsidy and the rent subsidy expire at the end of September, with an option to extend the rent subsidy to the end of November if need be.

“At some point, there will be a tapering,” said a government source. But not until the pandemic abates.

In her first budget as finance minister, and after two years of not having a new fiscal plan despite all the hundreds of billions in pandemic spending, Freeland has devoted much of her attention to plotting a long-term recovery strategy for the country, with child-care funding, inclusivity and environmentally sustainable growth at the centre. But faced with brutal evidence that the pandemic is not done with us yet, and under pressure from small businesses that say they are about to collapse, Freeland is also highlighting the emergency aid that will be available.

“These programs are a major investment. They come at a significant cost. But they are worth it. They are preventing scarring,” said one of the government sources, referring to the permanent damage many analysts fear will result from the on-again, off-again restrictions that have gutted some sectors of the economy and sidelined hundreds of thousands of workers.

The new subsidy and the extension of the existing subsidies certainly won’t give the private sector everything it needs to get back on its feet for the long term. But for the short term, they are a necessary tool just to get through this thing.

Source: Toronto Star

Canada-U.S. Border Restrictions Extended as U.S. Congressman Pushes for Reopening Plan

The Canada-U.S. border will remain closed to non-essential travel until at least May 21. Public Safety Minister Bill Blair tweeted the extension on April 20.

The Canada-U.S. border agreement, which has been in place since March 2020, bars entry to most travellers who are not Canadian citizens, permanent residents or people entering from the U.S. for “essential” reasons. Most people who enter the country are required to self-isolate for 14 days after their arrival.

Marking the extension, U.S. Congressman Brian Higgins, co-chair of the northern border caucus, urged both governments to craft a plan to reopen the shared border. “It’s 395 days since the United States-Canadian border closed, and the closure was just extended another 30 days. Families on both sides of the border have been torn apart, people who love each other, parents, grandchildren, unable to see each other,” the Democratic member from Buffalo, N.Y. told the House of Representatives. “We need a plan to open the U.S.-Canadian border. With vaccines, face masks, and good physical distancing, we can do so safely and successfully.”

Source: CBC

CRA Has Nearly 1,200 Complaints of Companies Misusing Covid Money, but Has Issued No Fines

The Canada Revenue Agency has received nearly 1,200 complaints about companies allegedly misusing federal support money designed to protect jobs during the pandemic, CBC News has learned. Despite repeated threats from the federal finance minister’s office to come down hard on companies with large fines and even imprisonment of executives for misusing the Canada emergency wage subsidy (CEWS), the CRA hasn’t penalized a single company.

Critics say that’s in part because the CEWS program doesn’t expressly restrict how companies manage the profits that might result from receiving federal support for wages, so long as the government money was used for that purpose. There’s nothing that says a company receiving CEWS money can’t also pay or increase dividends to shareholders or hike executive pay. “The government dropped the ball,” said Richard Leblanc, a professor of governance, law and ethics at York University.

It’s not difficult to find examples of companies that appear to have fared well after receiving pandemic support money from Ottawa. Yellow Pages, for instance, collected $7.3 million in CEWS funds in 2020. It also paid out $8.8 million in dividends, the first such payment to its shareholders in several years. Between August and December, the company also bought back $3.3 million worth of its own stock.

“The criteria to qualify for the subsidy were clear, and Yellow Pages followed and met those criteria,” the company said in an email to CBC News. “With the assistance of the subsidy, Yellow Pages did not reduce employee wages, impose mass layoffs, or furlough its employees.”

Money in, money out
The CRA would not say which companies were the subject of complaints or provide any further details about the nature of the complaints. At a total cost of more than $74 billion, CEWS has now become the government’s most expensive COVID-19 relief program, surpassing the Canada emergency response benefit (CERB).

The program was launched in April 2020 to help Canadian companies keep staff on their payroll as strict COVID-19 restrictions were imposed. The basics were simple: the government would pay up to 75% of employees’ wages in order to encourage companies to avoid layoffs and rehire workers. To qualify, companies simply had to show a drop in revenue during the pandemic, either annually or over particular periods.

‘Improving free cash flow’
CBC News has found six examples of large, publicly listed corporations that qualified for and received CEWS and either initiated or increased payments to investors in the form of dividends.

“The average person will see that there was unjust enrichment as a result of a government program, and that money went to shareholders and went to executives,” said Leblanc. He argues corporations should have been required to restrict dividend increases, share buybacks and hikes to executive compensation as a condition for receiving CEWS. “It could have been so easy to restrict that at the beginning,” he said.

Others imposed restrictions
Those types of restrictions would not have been unprecedented in Canada. At the beginning of the pandemic, the Office of the Superintendent of Financial Institutions (OSFI), Canada’s banking regulator, barred banks and insurers from dividend increases, share buybacks and increases to executive compensation to ensure Canada’s financial institutions were economically stable and had adequate capital and liquidity.

Ari Pandes, associate professor of finance at the University of Calgary, says often those types of restrictions are driven by politics. “I can see the optics are bad,” Pandes said of companies that receive government subsidies and then increase payouts to shareholders or raise executive compensation. “But the intent of the wage subsidies was to make the companies as if the pandemic didn’t happen, going as they were. And if that was the intent, well, that’s good. Companies are healthy. A company would never increase a dividend unless they felt they could sustain that for the very long term.”

Falling through the cracks
As of this month, CEWS has been distributed to more than 440,000 businesses. But some businesses that say they desperately needed the subsidy found they didn’t qualify.

555 Brewing Co. in Prince Edward County, Ont., laid off most of its employees in March 2020, when the pandemic hit. The business qualified for a few CEWS payments and was able to rehire some of its workers. But the seasonal nature of the business meant it was not able to tap into the wage subsidy over a subsequent number of qualifying periods.

“Unfortunately, a few of the periods we didn’t qualify, we only just missed it, but we’re still down,” said co-owner Drew Wollenberg. “[Especially] when you take into consideration all the extra expenses that we’ve had, we’re operating with almost twice the overhead to try to keep everyone safe and to pivot the business to suit the current climate.”

Source: CBC

Ford Announces New Restrictions as Covid-19 Cases Threaten to Remain High All Summer Social Sharing

Ontario will step up enforcement powers for police and extend its stay-at-home order to a minimum of six weeks in a bid to stem the exponential rise in COVID-19 cases, but won’t institute paid sick days — despite modelling showing that cases will remain high through the summer without additional support for essential workers.

Premier Doug Ford announced that the stay-at-home order first instituted on April 8 for four weeks will now be extended until May 20. Effective 12:01 a.m. on April 17, outdoor gatherings will be prohibited except for members of the same household or one other person from outside that household who lives alone.

Non-essential construction will be shut down and outdoor amenities like golf and playgrounds will be restricted. Retail capacity will be limited to 25% in all settings where in-store shopping is still permitted. Inspectors will also visit law offices, accounting firms and other such locations to confirm that only essential workers are in the building.

Effective 12:01 a.m. on April 19, religious gatherings, weddings and funerals will be limited to 10 people, whether indoors or outdoors.

Also as of April 19 there will be checkpoints at provincial borders with Quebec and Manitoba with exceptions for essential travel. “Should an individual not have a valid reason to enter Ontario, they will be turned back,” said Health Minister Christine Elliott. Quebec Deputy Premier Geneviève Guilbault also announced that Quebec will be closed to travellers coming in from Ontario starting on the same day.

‘We’re losing the battle’
Ford, along with Solicitor General Sylvia Jones, told reporters the stricter measures are necessary because of a lack of vaccine supply. However, health experts have repeatedly said vaccines alone cannot stop the surge of the virus. “Without stronger system-level measures and immediate support for essential workers and high-risk communities, high case rates will persist through the summer,” Ontario’s COVID-19 science advisory table said.

The province did say it will boost vaccine supply by 25% in hot spots, but did not provide details on when that boost might take place.

Stricter Enforcement
The statement also mentions the new enforcement powers that would allow officers to ask individuals and motorists who are not at home their purpose for leaving home and to provide their home address. That includes stopping vehicles and potentially issuing tickets of approximately $750.

However, a majority of police services in the province said they do not intend to randomly stop people or vehicles. Public health experts also questioned the measure and civil liberties advocates warned that the move could lead to a rash of racial profiling. After the backlash, the order was revised on April 17, and now the province says that police may stop individuals only if they are suspected of participating in an organized event or social gathering.

Paid Sick Days Not Addressed
Meanwhile Unifor, Canada’s largest private-sector union, also issued a statement urging the province to legislate paid sick days and fast-track vaccinations for all workers deemed essential. “Workers are scared, and are looking to the province for leadership. Instead, Doug Ford is playing politics amid the crisis, and workers in essential jobs across the province are still waiting to be put on a fast-track to vaccination,” said Jerry Dias, Unifor’s national president.

The union says it first wrote to the premier at the start of the pandemic in March 2020, calling for the measure. “Yet as we enter this unprecedented and alarming stage in the pandemic, the provincial government continues to ask essential workers to put themselves and their families at risk,” said Naureen Rizvi, Unifor Ontario regional director. “This is unconscionable, no worker should be asked to risk their health and their life for their job.”

Source: CBC
Source: CP24
Source: CBC
Source: CBC

B.C.. Announces New Travel Restrictions to Contain Coronavirus

British Columbia announced strict travel restrictions at a press conference on April 19 while lowering the eligibility age for the AstraZeneca-Oxford COVID-19 vaccine to 40.

B.C. Premier John Horgan, Provincial Health Officer Dr. Bonnie Henry and Health Minister Adrian Dix provided a live update on the province’s COVID-19 situation. Horgan said new travel restrictions are coming to reduce the movement of people and prevent the spread of the coronavirus. The province has asked the tourism industry to reject bookings from people travelling outside their local areas, he added, saying he’s confident tourism businesses will comply, but the province is prepared to enforce new orders if they don’t.

Solicitor General Mike Farnworth is drafting orders to further restrict travel to stop people from leaving their health authority for non-essential reasons, he said. And there will be random audits of travellers to make sure people are complying with rules. BC Ferries is going to stop taking bookings for drivers with recreational vehicles and signs will be placed along the B.C.-Alberta border to remind travellers that they shouldn’t be coming to B.C. unless it is for essential reasons.

The restrictions are slated to last through the Victoria Day long weekend in May.

Source: CBC