Ottawa faces pressure to extend COVID-19 benefits set to expire this month

Many of the federal government’s key pandemic supports are set to expire in a few weeks, prompting some business leaders to advocate for an extension.

Programs like the Canada Emergency Rent Subsidy (CERS) and the Canada Emergency Wage Subsidy (CEWS) are scheduled to terminate on Oct. 23, after being extended several times since their launch in 2020.

When asked on Wednesday whether the government is planning to prolong them once again, Deputy Prime Minister and Finance Minister Chrystia Freeland was noncommittal, saying that the pandemic continues to pose a challenge to businesses.

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“The fourth wave and the Delta variant are hitting parts of the country particularly hard, and we know government policy needs to be mindful of that. We will provide economic support as needed,” she said, pointing to campaign promises to target future supports at harder-hit industries.

“We’ll have more to say about the specifics soon,” Freeland said, telling reporters she and Prime Minister Justin Trudeau have spoken about the matter.

The passage of the Budget Implementation Act allows the government to extend CERS and the CEWS to Nov. 30. Beyond that timeline, the Liberals would need to introduce new legislation in Parliament.

“It comes down to the bottom line of the promise we made at the beginning of this pandemic to have Canadians’ backs as much as it took, for as long as it took… We’ll have more to say on in the coming weeks,” Trudeau said Wednesday.

The CERS provides support directly to qualifying tenants and property owners instead of requiring the involvement of landlords. Subsidy support is based on revenue declines in a specific claim period. The maximum base subsidy rate has dropped to 20 per cent of eligible expenses.

The CEWS helps cover employee wages, originally at a fixed rate of 75 per cent but more recently based on a business’s revenue drop in a given month in 2020 or 2021 compared to the same month in 2019.

Freeland said that she’s also been discussing the future of the benefits with Canadian Federation of Independent Business president Dan Kelly, who has been advocating for an extension of business benefits until March, 2022.

“I don’t want these programs to be around forever, but they need to be around until all of the COVID restrictions are lifted. They can always be extended but at least March 31 gives us a bit of breathing room,” said Kelly in an interview with CTVNews.ca on Thursday.

“January to March is already just a terrible season for most businesses and so having at least a little bit of assurance that they’re going to have programs to rely upon will allow them to plan.”

The federal government continues to point to vaccination as the key way to avoid future lockdowns and allow the economy to rebound.

Kelly said government-mandated vaccine passports have resulted in about a 20 per cent drop in sales for small businesses.

“This is now causing near panic because they’re seeing more restrictions being added at a time when the government is just weeks away from eliminating all of its major support programs,” he said.

On top of an extension, Kelly would also like to see the subsidy amount climb from 20 per cent of eligible expenses to 75 per cent.

“Only 40 per cent of small businesses are at normal levels of sales, 60 per cent are not there yet. I think a lot of people see businesses open and they just assume that we’re back to normal, but it’s definitely not the case,” he said.

As of Sept. 26, the government has paid out $93.97 billion to nearly 4.4 million CEWS applicants, and $6.6 billion to more than 1.6 million CERS applicants.

“We’ve spent $289 billion and counting on income support and business support. This has been a national trauma, and a very expensive national trauma,” Freeland said.