This story has been updated as of April 1 at 3 PM ET to reflect details provided by the prime minister and the finance minister.
If you’re a business struggling with the financial effects of the coronavirus pandemic, the government’s promised wage subsidies are on the way.
Prime Minister Justin Trudeau on Monday shared some of the details on the new subsidy program for businesses, which was significantly amended last week after criticisms that the initial plan to cover 10 per cent of wages wasn’t nearly enough to make a difference.
Trudeau said last week that plan would now cover up to 75 per cent of wages.
But there remain unanswered questions about how it all will work.
Here is what is and is not known.
Who is eligible?
It’s important to note right away that there isn’t a lot of information about the specifics of how the subsidies will work — and in particular, how those accessing them will be held accountable.
It is clear, however, that it won’t just be small and medium-sized businesses getting access to this.
Trudeau said on Monday that the subsidies will be open to any business, big or small, along with charities and not-for-profit organizations, so long as they are not publicly-funded.
Those applicants must have suffered at least a 30 per cent decline in revenue because of the coronavirus pandemic, he said, noting that the goal is to ensure as many people as possible can keep their jobs and paycheques.
“For people to get through this tough time and for the economy to rebound, people have to keep their jobs,” Trudeau said. “That’s why the number of employees is not the eligibility criteria we’ve chosen.”
Deputy Prime Minister Chrystia Freeland also explained the rationale behind including large corporations in the wage subsidy plan when questioned by journalists on Monday.
“We understand that coronavirus and the economic impact of coronavirus does not make any distinction between small companies, medium companies, large companies,” she said.
“The idea of this program is to conserve Canadian jobs.”
Freeland would not answer when asked whether any large companies that take the subsidy would face criteria such as not raising executive bonus pay.
How will it work?
For those that get the subsidy, the government will then cover “up to 75 per cent” of employees’ wages — but only for the first $58,700 worth of salary.
That means the maximum amount of subsidy would translate to $847 per week, unless an employer tops up any salary exceeding $58,700 from the business’s own funds.
That will be delivered via direct deposit from the Canada Revenue Agency into the business bank account, Finance Minister Bill Morneau said on Wednesday.
Originally, the plan had been to give the subsidy as a reduction in the income tax employers sent to the Canada Revenue Agency but when the subsidy was changed from 10 per cent to 75 per cent, Morneau said the plan on how to deliver it had to change as well.
Trudeau said on Wednesday he plans to recall Parliament for the second time in two weeks in order to pass the wage subsidy measures as a separate piece of legislation.
He added that applications will be made for the subsidy through the Canada Revenue Agency, which is the same agency administering the COVID-19 Emergency Response Benefit.
Canadians will be able to get one or the other, but not both.
He also said that “employers will need to attest that they are doing everything they can to pay the remaining 25 per cent of people’s wages.”
But whether they actually do so will be up to the businesses.
“We’re asking businesses, if they can, to pay that 25 per cent,” said Morneau.
“We’re recognizing not every business will be able to do that.”’
In order to prove the business has seen a decline in revenue of 30 per cent or more because of coronavirus, Morneau said they will be asked to submit year-over-year earnings comparisons in their application.
For businesses operating for less than a year, he said it’s possible they could provide a month-to-month comparison instead but that the details on that are still being worked out.
It’s not clear though whether those applications and revenue comparisons will be fully vetted before the subsidy is delivered. It’s also not clear what the punishment could be for companies that try to take advantage of the system, though Trudeau warned such consequences would be “severe.”
In other words: the big details are becoming more clear, but parts of the process itself remain opaque.
When will it roll out?
This is another big unknown.
Morneau said the online portal for the program should be up and running in between three to six weeks.
No specific date is set right now though for when it will be operational.
Trudeau had said earlier in the week that the Canada Revenue Agency is focused right now on rolling out the new COVID-19 Emergency Response Benefit.
That new benefit of $2,000 per month for individuals who aren’t able to work because of the coronavirus pandemic is set to roll out on April 6 and be sent to applicants around 10 days later.
Because of that, it’s not yet clear whether the wage subsidy launch will be pushed back until after that first program gets up and running, or whether it will overlap with the launch.
“This help will be getting to them soon,” Trudeau said.