Only the beginning of quantitative easing: BMO's Porter
OTTAWA - The federal government is increasing a payroll subsidy to small business to thwart layoffs due to COVID-19.
A broad swath of business and labour groups had criticized the original proposal of a 10 per cent subsidy for falling well short of what was needed to avoid mass layoffs.
The United Steelworkers welcomed the change, but noted the subsidy needed to be available to all employers and workers who need it. The Canadian Federation of Independent Business said that backdating the subsidy to March 15 will allow some small businesses that have had to lay off staff rehire them quickly.
As one example, the wage subsidy may let financial technology startup Borrowell Inc. keep all 80 of its employees, said chief executive Andrew Graham.
Canadians will get a better picture of the employment situation early next month when Statistics Canada releases its monthly labour force survey. Chief statistician Anil Arora issued a plea Friday for more companies to respond in multiple cities, including Toronto and Vancouver, to help get "the most accurate account of the situation."
The Liberals said they are also working with banks to provide loans of up to $40,000 for small businesses. They will be interest-free for the first year and up to $10,000 could be waived for repayment if the loan is paid off by Dec. 31, 2022.
Speaking outside his Ottawa residence, Prime Minister Justin Trudeau said the government needs to hammer out the details of the proposal, which he hoped to provide by Monday.
Asked about paying for the measures, the prime minister said the government would provide a full costing to Parliament of what he called "unprecedented investments in the economy," but didn't say when details would be public. He added that the spending was necessary to "get through these coming months of restricted economic activity."
The moves add to the value of the bailout package to date to more than $200 billion, including $52 billion in direct spending, $85 billion in tax deferrals for individuals and businesses, and $65 billion in loans. TD Economics, in a research note, estimated the boost to the wage subsidy could add $25 billion in direct spending to the total.
During an afternoon press conference alongside Poloz, Finance Minister Bill Morneau said the government hasn't put a cap on what it might need to spend to bridge the economic storm.
"We're going to do whatever it takes to support Canadians," Morneau said.
"We're always going to responsibly look at what these programs cost, but that is not the key issue right now. We've got literally millions of people who are worried about whether they're going to have the money to support their families in the coming weeks."