Ottawa’s bailout measures for workers who have been laid off during the COVID-19 crisis are welcome, a sure sign of leadership in difficult times.
The next step must be a series of measures to ensure the companies that laid those people off are still there when the crisis passes.
There is every sign that the precautions every province, along with the federal government, have put in place over the past couple of weeks are working to slow the progress of this virus.
And the bailout will go some way toward helping those without work. If you’ve been laid off and you’re looking at two or three months without income, you can get up to $2,000 per month from Ottawa to tide you over.
Their employers, however, were lobbying Ottawa hard to improve measures designed to help them. The feds responded on Friday with promises of wage subsidies and HST deferrals that, on the surface, will go a long way.
Small businesses in particular, the backbone of Atlantic Canada’s economy, have been hit hard. More than half are closed or partially closed and Jordi Morgan of the Canadian Federation of Independent Business called the situation “carnage.”
Dalhousie university economist Melvin Cross warned this week that if governments don’t do more to help small businesses, many will not be able to re-open and that “could lead to a disaster.”
Cross suggests that banks provide access to as much credit as businesses need to get through the current cash crunch, backed by the federal government as a loan guarantor. That would be a good start.
The wage subsidies that Prime Minister Justin Trudeau announced on Friday were welcome news indeed. Details are still forthcoming, but Ottawa hiked the subsidy from 10 per cent to 75 per cent for small and medium-sized businesses. It will be back-dated until March 15.
As well, the feds will pump $12.5 billion more into programs that help with ‘’operational cash flow requirements’’ and will defer HST and GST payments until June. The HST deferral alone is a big boost, giving companies breathing room to operate for a few weeks until people can start moving around again, working and spending money.
Business owners need to know two things: Who qualifies and how soon the money can start flowing. Only then will it become clear to them whether they can continue in business and whether they can bring back some of the people they’ve laid off.
