Business groups in Canada are calling on Ottawa to extend federal pandemic-relief programs or face a massive wave of employee layoffs across the country.
Ending wage and rent subsidies as planned this Saturday (October 23) will force many businesses to reduce their hours, layoff staff or shut down for good, say the business groups.
The federal government introduced the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy to help businesses cope with pandemic restrictions, rehire workers and resume normal operations.
Business groups say cutting off the financial aid amid an unpredictable fourth wave, growing labour shortages and ongoing restrictions such as capacity limits and proof-of-vaccination rules could trigger an economic crash in Canada.
Restaurants Canada says 80% of restaurants are operating at a loss or barely scraping by currently. Without government subsidies, the industry group says many restaurants won't survive the fall and winter.
The Canadian Federation of Independent Business (CFIB) says only 40% of businesses are back to normal sales as the deadline for financial aid programs approaches. Without the pandemic support, the group warned that there could be another wave of business closures.
The CFIB is asking Ottawa to scale back the Canada Recovery Benefit, an income support program for workers who do not receive employment insurance benefits. The business group said the program is contributing to the labour shortage by creating a disincentive for some part-time employees to work.
However, a recent report by the Business Development Bank of Canada suggests the phaseout of government aid programs like it won't fix the issue of labour scarcity.
The Business Development Bank report said that while sectors like accommodation and food services, retail, and manufacturing have lost thousands of jobs, professional and business services, education, public administration, and health care have gained workers.
In fact, 20% of workers who lost their jobs during the pandemic are now working in an entirely different field.
