The owner of one of Penticton’s most iconic eateries says he’s fallen through the cracks of Canada’s Emergency Wage Subsidy Program (CEWS) amid COVID-19 and no longer qualifies.
Gregory Condon, owner of Theo’s Restaurant, says the eligibility criteria for the wage subsidy, which covers 75 per cent of employee wages, is problematic for businesses under new ownership.
Business owners must prove a drop in revenue by calculating year-over-year revenue declines or by comparing the previous month’s revenue to the average earned in January and February 2020.
Condon purchased the restaurant in July 2019, so he said he is not allowed to compare restaurant sales each month to the same calendar month last year.
Condon said he must use January and February average sales as the benchmark comparison when business in the tourism town is typically very slow.
“Typically for the South Okanagan, in January and February, most companies lose money,” he said.
Condon said he did qualify for the wage subsidy in March, April and May but now that business is picking up, he no longer qualifies for June and beyond under the current framework.
“So I’ve literally fallen between the cracks and I’m not going to qualify,” he said.
“There’s thousands of people that bought businesses in 2019 and I’m hoping our voice can be heard to help those people too.”
Condon said he brought some employees back under the wage subsidy program, which covers up to $847 per worker per week, but now the future is uncertain.
“I had to beg some staff to come back to work because they were on the CERB program, so here I am on one hand saying ‘Guys, come back to work,’ and on the other hand saying, ‘Oh, we’re not going to get the wage subsidy so now I’ve got to trim the hours down,'” he said.
Condon said he is confident the business will survive, despite up to $130,000 in foregone wage subsidies and a projected year-over-year drop in sales of at least 40 to 50 per cent.
“We are doing our best to make sure guests can come in for safe dining and takeout and keep as many people working as possible,” he said.
South Okanagan-West Kootenays MP Richard Cannings raised the issue in the House of Commons on June 17.
“New businesses have a hard time qualifying for the emergency wage subsidy because they weren’t around last year and they can’t use that comparison,” Cannings told Global News.
Cannings said he has consulted with top bureaucrats about the loophole as “it’s just unfair,” he said.
“He’s having to compete with restaurants who do get this wage subsidy.”
Cannings’ question to Middle Class Prosperity Minister Mona Fortier about the subsidy shortfall went unanswered. Fortier, instead, repeated a political talking point.
“The Canada Emergency Wage Subsidy is supporting over 2.5 million workers across the country, and to help even more businesses support their workers and rehire people as they reopen, our government is extending the CEWS for an additional 12 weeks to August 29,” Fortier said.