The extension is intended to stabilize companies during the country’s gradual economic rebound
The federal government has announced that it will be extending its wage subsidy program – which has proven instrumental to the continued survival of many households and businesses – to companies severely affected by the COVID-19 pandemic until at least December.
Earlier this week, Prime Minister Justin Trudeau said that this extension would provide “greater certainty and support to businesses as we restart the economy.” Trudeau said that more details, including eligibility requirements, will be available in the next few days.
Data from the Office of the Superintendent of Bankruptcy Canada indicated that the subsidy played a large part in insolvencies recently seeing their largest year-over-year decrease since 1988. The OSB’s figures showed that there were 6,111 insolvency filings in May, falling by 8.8% monthly and 51% annually.
However, market players expressed concern that the duration of the federal aid might need to be extended even further, all the way to 2021.
“I don’t think anybody expects that … everything is going to be fine [for affected industries] by December 31,” said Ross Laver, senior vice-president for strategy at the Business Council of Canada. “We need to bear in mind that some of them are going to need help for an extended period of time.”