PM Trudeau Announces Federal Wage Subsidy Program to Be Extended to December As Canada-US Border Remains Closed

During his press conference on Monday, Prime Minister Justin Trudeau announced that the federal government’s wage subsidy program for businesses will be extended till December.

The program which covers 75 percent of wages, up to a weekly maximum of $847, for workers at eligible companies and non-profit organizations is part of the government’s plan to get Canadians back to work. 

“This week we’ll be announcing an extension to the wage subsidy program until December, to give greater certainty and support to businesses as we restart the economy,” said the Prime Minister.

As of July 6, it was reported that the wage subsidy program has paid out $18.01 billion to 252,370 companies across Canada in payroll help. 

Following the announcements from Monday, the government will be boosting the budget of the wage subsidy program to $82.3 billion to extend the program to the end of the year. 

The federal government originally saw the wage subsidy program as a key tool to help Canada cushion the economic impacts from COVID-19 by helping workers keep their jobs even though businesses remained closed due to the pandemic. 

However, the budget for the wage subsidy program lagged behind the spending for the Canada Emergency Response Benefit (CERB) program.

The CERB was designed to help Canadians who lost their jobs and or faced reduced hours of work due to the pandemic restrictions.

As of July 5, the $500-a-week CERB program paid out $54.8 billion to 8.25 million people, approximately $35 billion more in funding than the federal government’s wage subsidy program. 

Another difference to note between the programs is that CERB benefit has a budget of $80 billion and it is scheduled to close in the fall. 

Following criticisms of the eligibility rules for the federal wage subsidy program, Finance Minister Bill Morneau spent weeks to gain input from businesses, labour groups, and other stakeholders on how to reshape the wage subsidy program. 

With the information from these stakeholders, the government hinted that changes are coming to the revenue-reduction thresholds that may discourage companies from growing.  

“We need to reduce disincentives to growth,” said the Finance Minister last week. 

“We need to make sure the subsidy is appropriate for the challenges facing enterprises in actually rehiring and getting people back to work.”

Canada and the United States agree to keep borders closed for another 30 days

On Tuesday morning, Canadian and U.S officials have agreed to keep its borders closed to non-essential travel for another 30 days until August 21. 

The ban was first introduced in March when reports of the COVID-19 pandemic was first announced as a measure aimed to control the spread of the virus.  

Since then the measure was extended each month with the latest extension set to expire on July 21, one week from today. 

The agreement to keep the borders closed continues to exempt the flow of trade and commerce as well as temporary foreign workers and vital health care workers who live and work on opposite sides of the borders. 

Earlier this week, following a call with U.S President Donald Trump, Prime Minister Justin Trudeau briefly mentioned that a decision on the border closures would be coming this week. 

The Prime Minister said that talks were “ongoing” and vowed to “continue to work hard to keep Canadians safe and to keep our economies flowing”. 

Announcements for the border closures extensions come after some U.S political figures have pressed Canada to begin a phased reopening of the shared border, despite the surging numbers of new cases of COVID-19 in parts of the United States. 

A news site in the United States reported that nearly 1 in every 100 Americans tested positive for COVID-19 as the country reported 3.3 million confirmed cases of the virus. 

With the COVID-19 situation worsening in the United States, Canadians have expressed their fears of having the Canada-US borders reopened too soon and the risk of a second wave of the pandemic.

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