Deputy Prime Minister and Minister of Finance Chrystia Freeland on Parliament Hill in Ottawa, Feb. 23, 2021.Adrian Wyld/The Canadian Press
Federal subsidies for wages and rent will be extended at current levels until June 5, a move Finance Minister Chrystia Freeland said will cost about $16-billion.
The 12-week extension had previously been announced but it was not clear until Wednesday whether the size of the subsidies would be maintained. The Minister’s latest cost estimate is in line with a provisional costing that the government released as part of the fall economic update in November.
The Canada Emergency Wage Subsidy provides employers with up to 75 per cent of employee wages, while the maximum amount available under the Canada Emergency Rent Subsidy will remain at 65 per cent. A related Lockdown Support program for businesses subject to government-ordered shutdowns will remain at 25 per cent, meaning some businesses could qualify to have as much as 90 per cent of their rent covered by the federal government. The programs were previously set to expire on March 13.
Speaking at a news conference Wednesday, Ms. Freeland acknowledged the government’s emergency programs are adding to the national debt, but said failing to act would have caused long-lasting damage to the Canadian economy.
“Of course, we are constantly, carefully, evaluating government spending, government debt, jobs numbers and economic growth. We are prudent and we are responsible,” she said. “But sometimes the greatest danger is not to act and we understand that risk too.”
Ms. Freeland has not yet announced a date for the 2021 federal budget. The Minister’s fall economic update projected that the deficit for the current fiscal year, which ends March 31, could approach $400-billion.
National business organizations welcomed the government’s decision to extend the wage and rent subsidies at current rates.
Alla Drigola, director of parliamentary affairs at the Canadian Chamber of Commerce, said in a statement that the move gives much-needed certainty to business owners.
“Businesses can now plan with certainty this spring, knowing what level of support they’ll receive from these critical support programs through June of this year,” she said. “Now it will be important to ensure these programs are not wound down too quickly for businesses in the sectors that have been hardest hit and will take longer to recover.”
The Chamber listed tourism, travel, food services, accommodations and events as sectors that will need wage and rent subsidies beyond the June 5 cutoff.
The Canadian Federation of Independent Business said in a statement that wage and rent subsidies should be extended for as long as government-ordered restrictions are in place.
Know what is happening in the halls of power with the day’s top political headlines and commentary as selected by Globe editors (subscribers only). Sign up today.