The federal government’s announcement of help for small and medium-sized buisnesses was hailed by tourism officials as a great step forward.
The Canadian government is helping small to medium-sized businesses by covering 75% of wages for qualifying companies during the COVID-19 crisis, Prime Minister Justin Trudeau said on Friday.
The move was quickly hailed by the Tourism Industry Association of Ontario. Later in the day, Finance Minister Bill Morneau said more details of government aid for industries hit hard by the coronavirus, including airlines, should be announced soon.
Trudeau said the 75% wage subsidy is for qualifying businesses and could be backdated to March 15. It’s an enormous change from last week, when the government said it would cover just 10% of wages.
The Prime Minister also announced small to medium-sized companies would be eligible for $40,000 loans, with the first year tax-free and $10,000 of that is forgivable in some cases. The loans will come from what’s called the Canada Emergency Business Account.
There also will be deferrals of HST and GST payments, the PM said.
Trudeau said he’ll rollout more details between now and Monday, presumably including what companies qualify. It’s worth nothing that the Conference Board of Canada states on its website that any company with less than 500 employees is considered a small or medium-sized business.
The Association of Canadian Travel Agencies last week called on agents to seek government help and noted that 90% of Canadian agencies are considered small businesses. Many others could qualify for government help as medium-sized companies.
More than 98% of businesses in Canada fit that description, the Conference Board states. And those businesses, excluding the agricultural sector, account for 52% of the nation’s Gross Domestic Product.
The Prime Minister said the wage subsidy is meant to allow companies to keep employees on the payroll or even re-hire some who’ve been temporarily laid off because of COVID-19.
“Small and medium-sized businesses are the backbone of our country,” he said. “You’re going to get the support you need.”
:The measures announced by the Prime Minister this afternoon are in line with what TIAO has been campaigning for since the COVID-19 crisis escalated,” the Tourism Industry Association of Ontario said in an email to TravelPulse Canada. “A significant rise in the proposed payroll support and access to credit is exactly what our members have asked for and the Federal Government have listened to our requests.”
“The tourism industry in Ontario is the backbone of our local economy, with small and medium businesses employing over 400,000 people in every corner of the province,” TIAO said. “Many are small family businesses representing the entire income of a family; in rural towns these businesses are the staple of the local economy and across the province new tourism businesses having be driving economic growth and expansion. Many of these businesses had already closed, laid off their staff or feared they couldn’t make their payroll in the coming weeks.
“The 75% wage subsidy backdated to March 15 will help businesses to retain and rehire staff and the business loans and deferral of GST and HST payments will be a major help in improving cash flow and crisis management. There is much more to do and we will be delving into the detail to ensure that no one is left behind. However, after weeks of uncertainly this is a major step forward in ensuring our industry survives these unprecedented times and we welcome the federal government’s willingness to listen to those on the front-line and act accordingly,” TIAO said.
Source: Travel Pulse