Advocacy group says subsidy needs to change to help restaurants
One of the country's largest advocacy groups for restaurants is sounding the alarm over what could happen if things don't change within the federal wage subsidy program.
Right now, the program is in place for businesses until Aug. 29, and it applies to employers who have lost 30 per cent or more of their revenue in April and May due to COVID-19. The program offers businesses a 75 per cent top up of their payroll, in an incentive to keep employees on instead of laying them off through the pandemic.
David Lefebvre is the Federal Vice President of Restaurants Canada, and restaurants have been one of the hardest-hit industries during COVID-19.
"We just want to make sure that people understand it's really going to be a long road back to normal for restaurants, and we're going to need some more government support," Lefebvre says.
He's concerned that once businesses start to reopen and earn more profit, they'll no longer be eligible for the subsidy, even if they're still struggling.
"And we'd rather go to something that is more progressive or phased-in in terms of the extension of the wage subsidy rather than going from 100 to 0," he says. "We just want to make sure that the program can adapt as businesses slowly reopen."
Lefebvre says up to 30 per cent of restaurants in the country are at risk of permanently closing because of COVID-19 impacts.
"Now as we move in more to the reopening period, it's going to be important that the government transitions from emergency programs like, for example the CERB and those kinds of programs, to something that is more long-term like the wage subsidy incentives to work, to make sure that when restaurants reopen they can have the employee and the labour force back," he says. "So the wage subsidy really is a program that I've seen a lot of pick-up in the industry, and we find the program works well, so this is why we want to make sure it is extended."
Originally, the federal government announced the subsidy would be in place until June, but that's since been extended.
The federal government has committed to working with business owners to try and come up with a game plan for making the subsidy more versatile as the economy reopens.
As for the current eligibility of a 30 per cent drop in revenue, Lefebvre says that will have to change for restaurants to make it through to the other side.
"We would like this number to be lower as businesses are reopening because we don't want businesses to stop making revenues just to get the subsidy, so we want to make sure that everything is phased-in and that moving forward we can make sure to employ as many Canadians as possible."