Sask. businesses await further details on 75% per cent federal wage subsidy

Saskatchewan businesses owners are awaiting the details of a new federal wage subsidy that aims to provide relief to small and medium-sized businesses struggling due to COVID-19. 

Businesses seeing a 30 per cent drop in revenue are qualified for a subsidy of 75 per cent of an employee's pay cheque.

The government had previously announced a 10 per cent wage subsidy for businesses, but Prime Minister Justin Trudeau acknowledged that was not enough.

Matt Pinch, president and CEO of the Leo's Hospitality Management Group, says business owners need more information to determine if the subsidy will work for their needs.

The hospitality management group oversees restaurants, including Leopold's Tavern and Victoria's Tavern in Regina.

"I'm going to spend the week with advisers and others just evaluating what [the wage subsidy] means to us and if it would be helpful and how it would apply," Pinch said.

Pinch says the 75 per cent subsidy is a major improvement from the 10 per cent subsidy previously announced.

"It was just pretty much immaterial and meaningless and wouldn't have helped us at all.... Frankly our revenue has come to a complete standstill."

But there are still too many unknowns as to how the new subsidy will work, says Pinch.

"We understand that we qualify and we just need to understand now what that means for our business, and I think we also need to circle back to our first priority which is the well-being of our staff and what's best for them. I don't think a wage subsidy of any amount helps if people are still feeling uncomfortable about coming to work. So that's that's the key issue we have to resolve now."

Leo's Hospitality Management Group businesses are now closed, including for takeout and delivery. The group issued public health emergency leave to all its employees across Canada, approximately 400 people.

"As much as we would have liked to have kept paying our staff effectively, we just didn't feel it was in their best interest to be there and we could tell that they were scared."

'We're still left in limbo'

Melissa Wihlidal, owner of Coco Nail Lounge in Regina, has had to lay off all three of her employees during the COVID-19 pandemic. She says that even if she hired her employees back and paid them the 75 per cent subsidy, the business would have no way of providing them with work or providing the remaining 25 per cent of wage. 

"We have no income coming in at all. We're not a business that can do deliveries," Whilidal said.

Whilidal says all her employees have applied for employment insurance.

Derrick Swanson, president of OpenSail Digital Agency in Saskatoon, says that while his marketing business qualified for the previous 10 per cent wage subsidy, he is unsure if it qualifies for the new subsidy.

"It really depends how they measure it. We're still left in limbo as to what kind of decisions we should be making around staffing until we know those details," Swanson said. 

OpenSail chose to make sweeping cutbacks rather than layoffs. Some employees went down to part-time positions from full-time, and all employees are working from home.  

Swanson says he hopes to see clear and consistent guidelines from the federal government about who qualifies. 

The subsidy will run for three months and is retroactive to March 15. 

April rent and mortgage payments are a struggle

A quarter of small businesses are not able to pay April's commercial lease or mortgage payments due to COVID-19 disruptions, according to a survey conducted by the Canadian Federation of Independent Business (CFIB).

"Last week brought good news for many with respect to an increased wage subsidy, but the next big bill looming for many is commercial rent," said Laura Jones, CFIB's executive vice-president.

"Business owners — both leasers and landlords — are worried, as everyone has bills to pay."

Hospitality was hit the hardest, with 44 per cent saying they cannot pay rent. The survey found that 32 per cent of personal service businesses, such as nail and hair salons, cannot pay rent either. 

Wihlidal says her nail salon's landlord is still expecting her to pay rent for April, as of Monday. 

"We want to be promised that if we aren't able to pay the rent that we won't be forced out of our spaces," she said. 

The CFIB recommends the federal government ensure that $10,000 of its Canada Emergency Business Account is able to cover rent and other fixed costs. The organization also recommends that the eligibility for funds criteria apply to businesses hardest hit and most at risk of closing permanently.