Significant changes to wage subsidy and CERB programs required: CFIB
Small business owners face significant barriers hiring or recalling staff as they return to work.
TORONTO – Small business owners are eager to get back to work, but face significant barriers hiring or recalling staff, according to the Canadian Federation of Independent Business (CFIB). To get Canada’s economy back up and running, the federal government will need to implement key changes to the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Response Benefit (CERB).
“We’re in a pivotal period in the COVID-19 emergency – many economies are reopening and Canadians are looking forward to getting a haircut, enjoying a patio or revisiting their favourite stores,” said CFIB president Dan Kelly in a prepared statement. “However, despite the record unemployment numbers, many of these small business owners are now facing significant staffing challenges. While it’s too early to do away with CERB, it’s time to shift gears on the federal support programs to encourage people to rejoin the labour force,”
CFIB’s weekly COVID-19 survey found:
- 37% of small firms have concerns related to staffing (layoffs, retention, refusal to work)
- 48% of small businesses have laid-off staff temporarily, 10% permanently
- 26% have rehired some of their laid-off staff with 8% hiring new workers
- 31% have received the wage subsidy, with another 23% in process
- 76% of those using the wage subsidy said it was very helpful in addressing their challenges
“CFIB was very pleased with the federal government’s decision to extend the wage subsidy for June, July and August in order to help businesses recover from the COVID-19 emergency. Most expect their costs to return much more quickly than their revenues,” Kelly said. “But it should be noted that we are already in the new June subsidy period and businesses do not know whether the rules have changed yet.”
CFIB is pleased the government is proposing changes to CERB to end benefits if a worker is offered their job back barring health related issues. Such a move was supported by 87% of small business owners.
CFIB recently presented its recommendation on CEWS and CERB to the federal government, including:
- Lowering the 30% revenue drop test for CEWS to ensure more small firms can access the program and introducing a sliding scale, where firms would be able to qualify for a smaller wage subsidy with smaller revenue losses
- CFIB suggests all small firms should have access to a 10 per cent wage subsidy, with a subsidy of 25, 50 or 75% based on revenue losses of 5, 10 or 15%
- Including all employees in the payroll tax rebate, not just those who have been furloughed
- 82% of small firms believe CERB recipients should be required to be available and looking for work and 68% supported workers being permitted to earn more than $1,000 in additional income while retaining some of the CERB benefits.
CFIB warns that the uneven reopening of the economy will create additional barriers to workers going back to work – 44% of business owners indicated that their employees’ childcare challenges complicate their return to work.
“We fully expect this to be a messy recovery requiring flexibility and understanding on everyone’s part,” Kelly noted. “In order to get Canadians back to work, government needs to quickly announce its plans for CEWS changes as it puts additional guidance around the use of CERB.”