Finance Minister Bill Morneau was suppose to hold a news conference on March 31, 2020 to provide details of the subsidy program, but that was cancelled, in an April 1, 2020 story. (Photo by THE CANADIAN PRESS)

Finance Minister Bill Morneau was suppose to hold a news conference on March 31, 2020 to provide details of the subsidy program, but that was cancelled, in an April 1, 2020 story. (Photo by THE CANADIAN PRESS)

Federal wage subsidy payments to flow first week of May, officials tell MPs

Online applications will open April 27 and officials expect to have processed 90 per cent of claims by May 4

The first payments from a $73-billion federal wage subsidy program will flow by the end of the first week of May, acting as a buttress against the economic shock from COVID-19.

The Liberals are hoping the 75-per-cent wage subsidy will prompt companies to rehire vast swaths of the six million Canadian workers who have asked for emergency federal aid since the pandemic brought the global economy to a virtual standstill.

Online applications will open April 27 and officials expect to have processed 90 per cent of claims by May 4 with payments landing later that week, MPs on the House of Commons finance committee were told Thursday.

Canada’s top central banker told the committee the federal fiscal measure would help maintain employer-employee ties to aid in a recovery.

With expectations the freeze on the economy will be lifted before summer, Bank of Canada governor Stephen Poloz warned it might still be some time before the economy is back to its pre-crisis level.

ALSO READ: Trudeau unveils rental assistance for small businesses, loosens loan qualifications

“We’re going to get a V-shaped trajectory, so down very sharply, then of course back up, but not all the way,” Poloz said.

“That’s when it takes another, maybe a year for the economy to get back to the same path that it was on before all this started.”

The longer it takes for economic activity to resume, though, the more likely that businesses will close for good and the longer workers will face unemployment as they look for new jobs.

On Thursday morning, the government announced an expansion to a loan program for small and medium-sized businesses, and promised a new support for companies having trouble paying rent.

The Canadian Emergency Business Account will now provide up to $40,000 in government-guaranteed loans to businesses that had payrolls last year between $20,000 and $1.5 million. It previously offered loans to business with a narrower range of payrolls, between $50,000 and $1 million.

“Our government is here to help you through these challenging times. So when we hear the program is not reaching as many people as it should, we make changes,” Prime Minister Justin Trudeau said, acknowledging the criticism the government faced from companies who had felt left out.

Since the loan program was launched last month, businesses have taken out 220,000 loans worth $8.8 billion, Finance Minister Bill Morneau told the finance committee.

The loans are interest-free until Dec. 31, 2022 and if they’re paid off by then, up to 25 per cent will be forgiven.

Pushed about some small businesses that may still not qualify for the help because they pay in dividends or employ contractors, Morneau suggested those workers would qualify for the $2,000-a-month Canada Emergency Response Benefit.

The federal government is also working on a program to help businesses and commercial landlords cover their rents for at least three months, though the details still need to be worked out with the provinces and territories, Morneau said.

The federal government has upped its spending by over $105 billion to cover fiscal help, with monetary policy playing a supporting role as the economy went into a tailspin from COVID-19.

Adding to the shock has been plummeting oil prices — Alberta’s benchmark price is down 90 per cent from the start of the year due to declining demand and a glut of international supply.

Poloz said the central bank would likely have slashed its key interest rate in response to the oil price drop alone.

The Bank of Canada made three rate cuts — two unscheduled announcements — in March to reduce its target overnight rate from 1.75 per cent to 0.25 per cent, which Poloz said is effectively as low as it can go.

“Just on the basis of the drop in commodity prices alone, I would say we would have cut interest rates by at least 100 basis points, such as what we did in 2015,” he said during his final scheduled appearance before the committee before he leaves his post in June.

“Possibly we would have ended up doing all 150 basis points if that were the only shock we were facing.”

The economic shock from COVID-19 is unlike anything the country has ever seen, Poloz said.

A preliminary estimate by Statistics Canada suggested the economy contracted by nine per cent last month, which would be the worst one-month drop on record.

The central bank on Wednesday announced plans to start buying provincial and corporate bonds on the secondary market to reduce the risk those markets will lock up. Those measures are to inject up to $60 billion into the economy and will last, tentatively, for a year.

The bank is also increasing the quantity of federal treasury bills it’s willing to buy, beyond a $5-billion-a-week purchase, effectively making more low-interest loans to the government.

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Maple Ridge Community Foundation is hosting a trivia night fundraiser on Hit TV. (Special to The News)
Connie Werzun has taken up photography classes, and tok this picture along the dikes at Jerry Sulina Park one night recently. Using a seven-minute exposure, “a photo taken at night looks like it was taken during the day.” (Special to The News)
SHARE: Night photo of mountain range appears as day

Send us your photo showing how you view Maple Ridge or Pitt Meadows, and it could be featured soon.

Raphael Baruh of Slavic Rolls creates one of his Eastern European desserts at the Maple Ridge food truck festival on Saturday afternoon. (Neil Corbett/The News)
Food Truck Festival in Maple Ridge this weekend

Pick the drive-through lane for the food you like at Albion Fair Grounds

Coyotes walk down a Maple Ridge residential street. (Special to The News)
Security camera shows coyotes walking down Maple Ridge street

A warning to Silver Valley residents to keep their pets indoors, says home owner

Coach Ray Wakeman and the Maple Ridge Lawn Bowling Club are looking for new members. (Neil Corbett/The News)
Maple Ridge club looking for lawn bowlers

Games have been modified for safety during COVID-19

B.C. Health Minister Adrian Dix and Premier John Horgan describe vaccine rollout at the legislature, March 29, 2021. (B.C. government)
1,262 more COVID-19 infections in B.C. Friday, 9,574 active cases

Province’s mass vaccination reaches one million people

Two-year-old Ivy McLeod, seen here on April 9, 2021 with four-year-old sister Elena and mom Vanessa, was born with limb differences. The family, including husband/dad Sean McLeod, is looking for a family puppy that also has a limb difference. (Jenna Hauck/ Chilliwack Progress)
B.C. family looking for puppy with limb difference, just like 2-year-old Ivy

Ivy McLeod born as bilateral amputee, now her family wants to find ‘companion’ puppy for her

Emergency crews on scene after a small plane crashed in a grassy area on the northeast side of Boundary Bay Airport Saturday morning (April 10). A freelancer said the plane caught fire and one person was transported to hospital by BC Emergency Health Services. (Photo: Shane MacKichan)
1 taken to hospital after plane crash at Metro Vancouver airport

Plane appears to have suffered ‘significant’ damage, says freelancer

A vehicle that was driven through the wall of a parkade at Uptown Shopping Centre and into the nearby Walmart on April 9 was removed through another hole in the wall later that night. (Photo via Saanich Police Department and Ayush Kakkar)
Vehicle launched into B.C. Walmart removed following rescue of trapped workers

Crews cut new hole in parkade wall to remove vehicle safely

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Four members with Divers for Cleaner Lakes and Oceans were out at Cultus Lake on March 28 and 29 hauling trash out of the waters. (Henry Wang)
PHOTOS: Out-of-town divers remove 100s of pounds of trash from Cultus Lake

Members of Divers for Cleaner Lakes and Oceans hauled out 470 pounds of trash over two days

As of Saturday, April 10, people born in 1961 are the latest to be eligible for a COVID-19 vaccine. (Black Press files)
B.C. residents age 60+ can now register to get their COVID-19 vaccine

Vaccine registration is now open to people born in 1961 or earlier

A new saline gargle test, made in B.C., will soon be replacing COVID-19 nasal swab tests for kids. (PHSA screenshot)
Take-home COVID-19 tests available for some B.C. students who fall ill at school

BC Children’s Hospital plans to provide 1,200 kits to Vancouver district schools this April

Ruming Jiang and his dog Chiu Chiu are doing fine following a brush with hypothermia that saw several people work together to get them out of the Fraser River near Langley’s Derby Reach Park on March 25, 2021 (Special to the Advance Times)
Man finds men who rescued him from drowning in B.C.’s Fraser River

A grateful Ruming Jiang says he will thank them again, this time in person when the pandemic ends

Most Read