Federal supports through COVID-19: Did they work?
Navigating relief for businesses during a pandemic – and beyond
This story was originally published by Talent Canada.
Federal government relief programs for businesses hard hit by the COVID-19 pandemic — while uneven at times — could prepare the way for future workplace supports.
Job losses have dominated the news cycle, along with infection numbers. Ottawa addressed the job shortage in the government’s Nov. 30 fall fiscal statement.
“The economic shock of the COVID-19 pandemic caused Canada’s working-age employment rate to go from record highs to record lows in a matter of weeks,” Finance Minister Chrystia Freeland said.
Her speech also called the “sudden economic contraction” the greatest since the Great Depression, with more than 30 per cent of the workforce losing their jobs entirely or having their hours significantly reduced.
“About 4.4 million Canadians (have regained) their job or lost hours as of October,” she said. “Still, 636,000 jobs still hadn’t recovered by October and 433,000 workers had less than half the hours they worked before the pandemic. And more Canadians could lose work because of the resurgence of COVID-19.”
Freeland’s address further acknowledged how re-entry into the workforce will become more difficult over time, noting the added challenges women, young workers and racialized workers face.
Small business running on ‘fumes’
Renewed restrictions during the 2020 holiday season, a time many businesses count on to help them balance their books, left many organizations — especially smaller-to medium-sized ones — running on “fumes,” said Dan Kelly, president of the Canadian Federation of Independent Business (CFIB).
“A strong wind could blow down some of these businesses, so locking them down a second time will be enough to kill them,” he said.
Even businesses that remain open have seen a drop in business because more people are following health orders and staying home, said Kelly.
People won’t shop in stores if they’re worried about their health, said Karl Littler, senior vice-president of public affairs at the Retail Council of Canada.
“Public confidence not only in the economic circumstances, but also in the health-care environment, is pretty critical.”
Assessing federal supports
Littler called the Canadian Emergency Wage Subsidy (CEWS), under which eligible businesses receive money to use for their employees’ salaries, “the crown jewel” of the federal relief benefits for businesses.
According to the federal government, a quarter of private-sector workers benefited from the program in August, with most applications coming from businesses with 25 employees or less.
In November, the government announced it was extending the CEWS until June 2021. The maximum subsidy will be 75 per cent from Dec. 20 to March 13. Businesses receive different amounts of assistance, depending on how much revenue they’ve lost.
Other relief efforts didn’t receive as much praise. The Canadian Emergency Commercial Rent Assistance (CECRA) program, which helped businesses pay rent, was a “complete disaster,” said Kelly.
Only landlords could apply; many didn’t. It’s successor, the Canada Emergency Rent Subsidy (CERS) allowed tenants to apply directly and expanded which businesses are eligible. In addition, businesses who have been negatively impacted by public health orders can receive another 25 per cent in rent support from the Lockdown Support program.
The government promised in November to keep the CERS and Lockdown Support running until June 2021.
“The initial round of programs were a very blunt instrument,” said Littler, calling some of the thresholds or ceilings for receiving support “unfair and seemingly unequitable.”
“The new ones are a lot more rational even if they’re somewhat less generous,” he said. “They’ve gotten better at designing their programs in the 2.0 version.”
Re-imagining support for workers
The pandemic may yet change how governments view providing sick days and financial supports for family caregivers.
The Canadian Recovery Sickness Benefit (CRSB) provides $500 weekly for eligible workers who lose at least half of their scheduled work because they have or might have COVID-19, are self-isolating because of COVID-19, or have an underlying health condition that increases their risk of contracting COVID-19.
Support lasts for a maximum of two workweeks.
“It’s unfortunate that it took COVID to really bring to light the challenges that many workers face on a day-to-day basis,” says Hassan Yussuff, president of the Canadian Labour Congress (CLC).
“Across the country, this has been a real vacuum on the policy front, because many jurisdictions don’t have clear legislated legal protection for workers to get sick days from their employer,” he said.
This means many work while sick, possibly infecting their colleagues. “If you’re not able to bargain for it, you don’t have access to it.”
Workers cannot receive paid leave from their employer for this same time.
Reconfiguring sick leave, EI
David Macdonald, senior economist at the Canadian Centre for Policy Alternatives, called the benefit the “best worst solution to sick leave in Canada.”
Businesses may decline to provide their employees with paid sick days if they know the federal government has this, he said. “However, it does put this idea of a more general sick leave on the table in Canada. And that is a piece that might survive (after the pandemic).”
The Canada Recovery Care Benefit (CRCB) might open the door to people receiving employment insurance (EI) even if they quit their jobs, said Macdonald.
Under the benefit, eligible workers can receive $500 a week for up to 26 weeks before Sept. 25, 2021, if they can’t work because their children under the age of 12 or family member who needs supervised care is sick or self-isolating because of COVID-19, or if their school or regular programs have been cancelled due to COVID-19.
“EI is based on the premise that you can’t quit — if you quit, you get no EI,” said Macdonald, noting people are often “forced” to stay in bad jobs because they don’t receive support if they choose to leave.
“With the caregiver benefit, you can quit, as long as it’s related to a closure of school or daycare. It does open up the door a little bit,” he said.
“It should be a legislated requirement for employers to provide flexibility for people to have a leave for family care,” added Yussuff, noting he hopes governments address this after the pandemic.
Once this benefit ends, workers will be “back into a place where workers will be in extreme hardship if they have to take time off and they’re not compensated if they’re sick or have to take care of a loved one,” he said.
Some of the most effective relief for workers may not come from governments, but from employers themselves.
“There’s no new trends that have started because of COVID,” said Leah Nord, senior director of workforce strategies and inclusive growth at the Canadian Chamber of Commerce. “COVID has accelerated them — work from home, upskilling or re-skilling.”
Providing flexible work hours for people when they’re working from home is one way to help workers take care of their family and work responsibilities, she said, noting this can especially benefit women who often do more household labour.
“You have to maintain business operations,” Nord said, while acknowledging the responsibilities workers have beyond their jobs is crucial.
Retaining workers is a key way that businesses can prepare for a rebound.
“Try to hang onto as much of your talent as you can,” said Kelly.
“COVID will end, and if you’ve gutted your workplace and you’ve lost all of your talent, it’s going to be way harder for you to bounce back quickly.”
Meagan Gillmore is a freelance writer in Toronto.