The wage subsidy federal still raises questions

La subvention salariale fédérale soulève encore des questions

Photo: Paul Chiasson, The canadian Press
To take advantage of the program providing for the wage subsidy, a company must show that it has suffered a reduction in income of 30 % or more in march, April and may, compared to the corresponding month of 2019.

Three days after the details made by the minister of Finance, the federal program that provides subsidies of 75 % of the salary of employees in the companies heavily affected continues to raise questions, so that experts hope that Ottawa clarifies even more the rules of eligibility and operation of this flagship measure.

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“The definition that has been made for the eligibility of employers provides in practice a package of problems and issues,” says in the interview, Peter Guarantor, partner and leader of the national certification the firm of Raymond Chabot Grant Thornton, who is said to be based on the lived experience of clients these last few days. “Many are not eligible in view of this definition, that will probably change. This is the true challenge. […] The criteria are very simple, even too simple, and it leads to a lot of complexity. “

To take advantage of the program providing for the wage subsidy, a company must show that it has suffered a reduction in income of 30 % or more in march, April and may, compared to the corresponding month of 2019. For companies established after February 2019, according to Ottawa, ” eligibility would be determined by the comparison between the monthly income and a reference point is reasonable.”

The definition that has been made for the eligibility of employers provides in practice a package of problems and issues

Peter Garant

 

But Mr. Garant gives the example of a growing company whose sales of a million by 2019 had to pass 4 million this year. With the crisis, he is suddenly reduced to 1.5 million. However, its cost structure was built based on a higher income. “Therefore, it would suffer a significant financial loss, but would not be eligible, because we would compare his 1.5 million to the figure of 1 million. […] It excludes a lot of young growth companies. “

“Our puzzle master, at the present time, it is there. It has made presentations to the federal government on these points, and I think that a lot of people do also, ” said Mr. Garant.

On the side of the workers

Ottawa also unveiled a measure for the affected workers, Providing canadian emergency (PKU), which provides for $ 500 per week for a maximum of four months.

This measure, however, contains nothing that would oblige a person to return to the employer, said Luc Godbout, holder of the research Chair in taxation and public finance from the University of Sherbrooke. All the more that it is not impossible that the program had unforeseen effects. Suppose, he said, that a manufacturing company decides to produce (and to store the product in the warehouse) to take advantage of the wage subsidy for it to pass. That would make it once the program is finished ? Would it leave go of its employees ? “I’m pushing the extreme a little, but it is not neutral, as a measure, on the decisions of the company. The field of possibilities is quite vast. “

In the meantime, the canadian Centre for policy alternatives has estimated that 860 000 Canadians could find themselves in a situation where they will not have access either to insurance or employment of the PCU.

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