Small business owners are eager to get back to work, but face significant barriers hiring or recalling staff according to the Canadian Federation of Independent Business (CFIB).
To get Canada’s economy back up and running, the federal government will need to implement key changes to the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Response Benefit (CERB).
“We’re in a pivotal period in the COVID-19 emergency – many economies are reopening and Canadians are looking forward to getting a haircut, enjoying a patio, or revisiting their favourite stores. However, despite the record unemployment numbers, many of these small business owners are now facing significant staffing challenges. While it’s too early to do away with CERB, it’s time to shift gears on the federal support programs to encourage people to rejoin the labour force,” said CFIB president Dan Kelly.
CFIB’s weekly COVID-19 survey found 37 per cent of small firms had concerns related to staffing (layoffs, retention, refusal to work). Also, 48 per cent of small businesses had laid-off their staff temporarily, 10 per cent permanently and 26 per cent have rehired some of their laid-off staff with 8 per cent hiring new workers. In the CFIB survey, 31 per cent received the wage subsidy, with another 23 per cent in process and 76 per cent of those using the wage subsidy said this financial aid package was helpful in addressing their challenges.
“CFIB was very pleased with the federal government’s decision to extend the wage subsidy for June, July and August in order to help businesses recover from the COVID-19 emergency. Most expect their costs to return much more quickly than their revenues,” Kelly said. “But it should be noted that we are already in the new June subsidy period and businesses do not know whether the rules have changed yet.”
CFIB is also pleased the government is proposing changes to CERB to end benefits if a worker is offered their job back barring health-related issues. Such a move was supported by 87 per cent of small business owners.
CFIB recently presented its recommendation on CEWS and CERB to the federal government, including: lowering the 30 per cent revenue drop test for CEWS to ensure more small firms can access the program and introducing a sliding scale, where firms would be able to qualify for a smaller wage subsidy with smaller revenue losses.
CFIB suggested all small firms should have access to a 10 per cent wage subsidy, with a subsidy of 25, 50 or 75 per cent based on revenue losses of 5, 10 or 15 per cent, including all employees in the payroll tax rebate, not just those who have been furloughed.
In the survey, 82 per cent of small firms believe CERB recipients should be required to be available and looking for work and 68 per cent supported workers being permitted to earn more than $1,000 in additional income while retaining some of the CERB benefits.
CFIB warned that the uneven reopening of the economy would create additional barriers to workers going back to work – 44 per cent of business owners indicated that their employees’ childcare challenges would complicate their return to work.
“We fully expect this to be a messy recovery requiring flexibility and understanding on everyone’s part,” noted Marilyn Braun-Pollon, CFIB vice-president, Western Canada and Agri-business. “In order to get Canadians back to work, government needs to quickly announce its plans for CEWS changes, as it puts additional guidance around the use of CERB.”