COVID will be over by the autumn. That’s the apparent assumption driving the Liberal government’s budget, tabled Monday afternoon.
Finance Minister Chrystia Freeland spoke of “finishing the fight” as she delivered the Liberal government’s first budget in two years as Canada goes through the third wave of the pandemic and the travel industry has been shut down for over a year.
Freeland spoke of “healing” and “creating more jobs and prosperity for Canadians,” including, “providing support where COVID has struck the hardest including small and medium businesses in tourism and hospitality.”
Canada Emergency Rent Subsidy (CERS) and Canada Emergency Wage Subsidy (CEWS) will be extended past their current June 5 deadline, but will be wound down by the end of September.
Currently, CEWS provides companies with up to 70% of an employee’s salary up to a maximum of $847/week. From mid-July, that will be gradually reduced every four weeks til the final period ending 25SEP, when companies will be able to claim only 20%, up to a maximum of $226.
CERS, the Canada Emergency Rent Subsidy (CERS), will be wound down on a similar schedule. It currently pays up to 65 per cent of a company’s rent, winding down to 20 per cent in the final period ending 25SEP.
Travel industry advocates, including ACTA, had been asking the federal government to extend supports to three months after the re-opening of travel. And one of Monday’s budget announcements may be attempting to address that request.
Canada Recovery Hiring Program
This new program will pay 50 per cent of an employee’s wage in JUN, JUL, and AUG, then winds down to 40 per cent in SEP, 30 percent in OCT and 20 per cent in NOV.
The government is allowing companies to choose between the winding down CEWS program or the new CRHP program, whichever benefits them and their employees more.
What Happens After That?
Analysts agree there seems to be a calculation by the government that Canada will be emerging from the pandemic this fall. However, not all sectors will recover at the same pace, and travel seems sure to be among the last to recover, even as it was among the first and hardest hit.
The Toronto Star on budget day reports Freeland saying at a press conference, “We are further prepared to extend supports if the course of the virus requires it.”
And during her presentation of the budget to the House of Commons, the Finance Minister used terms like “punch our way” out of COVID.
Relief for Tourism, Hospitality and Funding to Re-Open Borders
In addition to wage and rent support, the Star reports that the budget introduces a Tourism Relief Fund. $500 million will be administered by regional development agencies to help local tourism businesses rebound from the pandemic.
That will be supported by a $100 million marketing campaign urging Canadians to take staycations and spend their travel budgets at home.
Another $200 million will be spent supporting arts and cultural festivals via regional development agencies, and the same amount to smaller festivals via Heritage Canada.
CTV News also reports the tabled budget includes $424 million this year and next for “the safe re-opening” of Canada’s borders. The funds are allocated to “funding further air travel protections and mandatory quarantine measures.”