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Ottawa extends wage subsidy to December, dumps 30 per cent threshold

Finance Minister Bill Morneau. (via Glacier Media)

Ottawa will extend its wage-subsidy program to businesses through to Dec. 19 in a bid to ease workers back into the economy.

Finance Minister Bill Morneau announced today (July 17) the federal government will also nix the requirement that businesses show a 30 per cent decline in revenue to qualify for the program.

Instead, businesses that have experienced any decline in revenue regardless of how small will qualify for the program.

“Those changes will be quite important because they’ll give businesses the ability to know that they have the wage subsidy for longer,” Morneau told reporters during a media briefing in Toronto.

The government will also offer what the finance minister described as a “top-up” to businesses that can show their revenue has fallen 50 per cent in the wake of the pandemic.

The program originally offered a 75 per cent wage subsidy, but businesses that have experienced a 50 per cent decline can qualify for up to an additional 25 per cent.

But the retooling also means that businesses currently tapping the 75 per cent subsidy will face a “gradually decreasing base subsidy,” according to a release from the Department of Finance.

The finance minister said the subsidy will be in proportion to the reduction in revenue a business has experienced.

Businesses that have experienced a 30 per cent revenue decline will be able to tap the program as is throughout July and August.

“For those businesses, as I said, that are particularly hard it, it will be even more. It will go up to [an] 85 per cent wage subsidy, or $960 per person,” Morneau said.

The government said the jobs of “about 3 million” Canadians are being supported through the wage-subsidy program.

The program initially launched as a 12-week initiative to cover the period from March 15 to June 6.

It was later extended in May for an additional 12 weeks ending on August 29.

But the changes mean that the 75 per cent subsidy will no longer apply to previously eligible businesses in a blanket fashion.

The finance minister also acknowledged during his briefing an “error” in not recusing himself from cabinet-level decisions regarding the selection of the WE charity to facilitate the delivery of nearly $1 billion through the Canada Student Service Grants.

Morneau’s daughter works for the charity, which also shares ties to Prime Minister Justin Trudeau and some of his family members, the latter of whom have been paid to speak at WE events.

“I did not recuse myself and I think that was a mistake in judgment on my part,” the finance minister said.

“I sincerely regret for my error in that regard.”