In an ideal world, every government would like its programs to play out with the confidence and elegance of time-tested classical music.
These COVID-19 days, though, it’s improvisational jazz, off-key at times, with lots of displeased patrons in the club.
Witness the performance of Bill Morneau, the finance minister, who tried to make sense Wednesday of the federal wage-subsidy program. What would take years to create as music to our ears is now being done in days and weeks, so he has to make do as he goes. There is much work to be done before his tune is coherent and critically acclaimed.
There is a long list of problems, but there are two honkers.
First, the program of 75% wage subsidies on the first $58,700 in income is only open to businesses whose gross revenues have fallen 30% year-over-year. This is an arbitrary line that makes little sense.
Many businesses losing even half that much of revenue are going to go under, and even those who can manage the decline in cash flow will find it very difficult with no subsidy. They ought to qualify at 15% and there should be a graduated system of sliding-scale subsidies for businesses losing less than 15%.
Second, you’d be really wrong as an employer if you think the cheque is in the mail. We are about to have a true application of the term snail mail. Morneau says the system for businesses to apply might be ready in about three weeks, but money will not start to flow for six to eight weeks. How many more small, medium-sized and large firms will fail by then?
There is an easy solution: have businesses request from Canada Revenue Agency an advance on their income tax, then let the paperwork catch up later to make it square.
As if to compound the delays, employers will need to apply every month. That means they will need to await their month-end financial statements – usually they aren’t produced until near mid-month – then file the application. Time and time again they will have to do this.
Again, send the money first, get the paperwork to make it whole. There are always audits if the government suspects a cooking of the books.
At the very earliest, it sounds like the first funds won’t be forthcoming until mid-May. During that time, Morneau sprightly suggested, business should “hire your laid-off workers back.” Sure.
It appears the government is legally overreaching with the program, so Parliament needs to be summoned to pass amendments to make the subsidy law of the land. That Ottawa didn’t bake this program into last week’s emergency session of Parliament indicates just how it didn’t anticipate a need that other countries have for many weeks known and addressed. They don’t seem to be having the impediments we have.
Somehow, too, Morneau calculates that the wage-subsidy program will cost $71 billion. How he does that is anyone’s guess, because that suggests he knows how many businesses are losing more than 30% and, thus, how much they can claim as a wage subsidy.
If he knows that, why not send the money today?
The finance minister repeated the prime minister’s warning that this is not the time to game the system. But businesses have to wonder whether funds in nearly two months’ time will keep them from collapse; for them, there might not be a system.
OK, we get that mistakes are going to be made in the messy business of a wartime-style effort to mitigate the economic ravages of COVID-19. But please, knock it off with the jazz.
Kirk LaPointe is publisher and editor-in-chief of Business in Vancouver and vice-president, editorial, of Glacier Media.
