As the Covid-19 outbreak threatens small businesses, the Canadian Federation of Independent Business (CFIB) is calling for a greater subsidy to help cover wages, relative to what the federal government has proposed.
In a release on Tuesday, the federation proposed a job retention program that would subsidize the wages paid by employers able to retain their staffs. The program would cover at least 75% of wages for employers, up to a cap of $5,000 per worker per month. The program would include the self-employed and small-business owners.
“It is essential that governments move quickly to safeguard local jobs and our economy by putting in place measures that will allow businesses to survive these unprecedented circumstances,” said Dan Kelly, CFIB president, in the release.
“Announcing a wage subsidy now will protect many jobs and keep employees connected to their employers, helping to speed the recovery when the Covid-19 emergency phase is over,” he said.
The federal government has announced provisions for a 10% wage subsidy for 90 days, up to a maximum of $1,375 per employee and $25,000 per business.
A survey conducted by the CFIB shed light on the state of small business. It found that 60% have seen a significant drop in sales, with more than one-third reporting a reduction in gross sales revenues of more than 75%.
As as result, more than half of survey respondents have started to lay off staff, and one-quarter (25%) have laid off their entire workforces.
Further, more than half of survey respondents (53%) said they’ll be forced to consider more layoffs in the next two weeks.
“At this rate, the only way to prevent massive additional unemployment is for government to introduce a much larger wage subsidy program,” Kelly said in the release.
Nearly one in three businesses said they wouldn’t survive a month under current conditions, up from one-quarter the previous week, the survey found.
The national average cost of the outbreak for affected businesses was about $136,000, it said.
In addition to the wage subsidy, the CFIB is calling on the government to provide such things as income support for the self-employed, as well as various tax relief measures.
For more details on how the outbreak has affected small businesses, read the CFIB survey results.
About the CFIB survey: The survey was based on responses received online from more than 11,000 small-business owners across the country since March 20.