Coalition of Hardest Hit Businesses members from left: Keith Henry, CEO of the Indigenous Tourism Association of Canada, Barbara Barrett, executive director of Frontier Duty Free Association and Martin Roy, executive director of Festivals and Major Events Canada.Dave Chan/The Globe and Mail
Industry associations from the tourism, hospitality and live-event sectors are banding together to push Ottawa to extend the Canada Emergency Wage Subsidy pandemic support program.
The program initially covered 75 per cent of workers' wages if the employer had a pandemic-driven revenue decline of more than 30 per cent. Changes announced midsummer, which came into effect at the end of August, introduced a sliding scale of support that varied on the extent of an organization’s revenue loss.
The new rules also created a tiered system of support for active versus inactive employees that some companies said prompted them to stop using the program this month. The program’s supports are also gradually declining until a planned phase-out expected in November or December.
Statistics released this week from Canada Revenue Agency show that organizations have been abandoning the wage subsidy since early June, and that while complete data are not yet available for when the new changes came into effect, numerous medium- and large-sized organizations have walked away because the changes make the program less lucrative.
The new Coalition of Hardest Hit Businesses, announced Thursday morning, wants Ottawa to extend the wage subsidy. The tourism, hospitality and cultural-event sectors are beholden to seasonal trends, with revenues highest during the summer, and they fear the pandemic will lead to a devastating fall.
The new sliding-scale rules and planned phase-out mean businesses will receive a smaller subsidy in each application period through November. The coalition, however, is asking for guaranteed federal support for 75 per cent of workers' wages for employers whose revenues have declined from prepandemic levels by 50 per cent or more – and for the program to be extended through next spring, rather than being phased out this year.
“This phase-out comes at a time when our sectors, after seeing a slight bump in revenues during the summer month, will experience a significant drop-off once again this fall," said Charlotte Bell, president and chief executive of the Tourism Industry Association of Canada, at a news conference in Ottawa in Thursday. "Simply put, the hardest-hit businesses will not be able to keep their employees on payroll without the wage subsidy.”
The group said it represents 40 industry associations and more than two million Canadian workers. Member associations include representatives from the Tourism Industry Association of Canada, the Indigenous Tourism Association of Canada, the Hotel Association of Canada and Festivals and Major Events Canada.
Many of these industries' employees already face structural disadvantages in the work force, Ms. Bell said, as a significant proportion are women, Indigenous people, new Canadians and young Canadians.
Keith Henry, the Indigenous Tourism Association of Canada’s president and CEO, said businesses in his association have had an average 70-per-cent revenue loss this year because of the pandemic. “This loss in sales revenues translates to employee reductions," he said.
“Each day our businesses are losing our Indigenous staff," Mr. Henry continued. "These are individuals that have been trained, and dedicated their lives and careers to sharing their culture with the world. These Indigenous employees cannot simply be replaced.”
The federal government has signalled it will move away from emergency supports to longer-term recovery programs with next week’s Throne Speech. But Susie Grynol, who leads the Hotel Association of Canada, said the initial 75-per-cent wage subsidy program was “well-built" and should not be wound down.
The planned phase-out this year “simply does not align with the reality of the needs of these hard-hit businesses who rely on people to come together and be face to face, which is specifically what public-health officials are asking us not to do,” Ms. Grynol said.
The wage program, for which $82.3-billion is allocated, requires employers to submit applications for designated four-week periods.
There were 3,559,060 workers supported in the highest-uptake period, which ended June 6, 3,103,740 in the period ended July 4, and 2,221,850 in the period ended Aug. 1, according to data released this week by Canada Revenue Agency, which administers the program.
Because there is often a delay in applications, many are still rolling in for the most recent four-week period, ended Aug. 29, which has seen just 675,140 workers qualify for wage supports so far.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.