OTTAWA -- Canada’s Employment Minister Carla Qualtrough says the slow implementation of the government’s wage subsidy program is a reflection of the strenuous application process and in part why the Liberal’s have chosen to extend it by another three months.
In an interview on CTV’s Question Period airing Sunday, Minister Qualtrough said she is hoping an extension to August will give more businesses an opportunity to tap into the program – a process she admits is extensive.
"It’s been slower than expected. I think businesses are having to put a lot of time and effort into their applications because you have to dig into your payroll – who earned what and when," she said.
"We’re looking at the back-end; how the CRA [Canadian Revenue Agency] can be more streamlined in taking the data from businesses and I think the uptake is going to pick up. I don’t think there’s a programmatic problem; I think it’s more a challenge to provide the data to the government."
The Canada Emergency Wage Subsidy covers 75 per cent of the first $58,700 of an employee’s salary for charities and small- and medium-sized businesses. For the first period – between March 15 and April 11 – employers had to show a 15 per cent loss in revenue and a 30 per cent drop from April 12 through to June 6, when it was set to expire.
Prime Minister Justin Trudeau on Friday said among the eligibility criteria they are reviewing during this next phase is the 30 per cent threshold. Opposition MPs and experts in the business community have argued the target is too high and prevents a swath of companies from accessing federal support.
"Over the next month, we’ll work with business and labour stakeholders on any adjustments that might be needed," said Trudeau. "As businesses start up, needing a decline shouldn’t be a barrier to growth. I know we’ll figure out solutions where needed, while continuing to support employers and employees because that’s who this is all about."
According to the Government of Canada website, the Canada Emergency Wage Subsidy (CEWS) has received 132,481 applications for salary relief and the department has processed and approved 123,642. Over a million Canadians’ salaries are currently being supported by the CEWS, which has so far cost $3.36 billion of the budgeted $71 billion.
When asked whether the budget projection will duplicate with a three-month extension, Qualtrough said "that remains to be seen."
"I know that the finance minister is going to spend some time over the next month working with the business community to figure out what changes could possibly incentivize job creation, what changes could better position businesses as we come out of this crisis."
The government was criticized for being slow to act on business support in the form of wage relief, resulting in millions of layoffs before the program got out the door.
Qualtrough on CERB fraud
The minister also responded to reports of thousands of fraudulent claims to other government aid programs, including the Canada Emergency Response Benefit (CERB), which grants those who’ve been laid off or unable to find work because of COVID-19 $2,000 a month for up to 16 weeks.
The reports, first published in the National Post, state the government instructed bureaucrats processing and issuing cheques to disregard red flags or warnings of abuse of the system.
However, Qualtrough said while the department did provide a guidance document on how to streamline the process to get money out to Canadians as quickly as possible, they "were not turning a blind eye to anything."
"It was really operational direction to Service Canada employees about how to temporarily process EI claims in the new reality of the CERB," she said.
"You have to understand that Service Canada employees went from processing EI claims that are very front-end heavy on integrity measures to processing automated claims through the CERB that really pushed integrity measures to the back end."
She reinforced what the prime minister has said that had they adhered to normal procedural oversight, it would have taken 12 to 18 months to issue funds.
"I can ensure you we know what we’re doing. We have a very sophisticated framework, everything that needs to be flagged is being flagged," Qualtrough said. "It’s not a matter of red flag, green flag. The Conservatives are over simplifying and not trusting Canadians like I do."
Defending the process, she gave an example of an individual applying with a SIN number associated with a deceased person, which she said wouldn’t be accepted. However, she adds someone who applies with a SIN number associated with an 80-year-old, would be granted federal aid but also flagged and subject to review down the road.
"We’re still going to make the payment but we’re going to look into that at some point and make sure that 80-year-old is actually working, actually making the $5,000 in employment income last year. There are so many levels of this," she said.
Trudeau has said in light of these instances, the CRA is being equipped with the necessary resources to better safeguard the system. The agency will require more detailed information about an applicant’s previous and current employment status and whether they’ve earned any income during the pandemic. The agency will also implement a stricter alert system to flag suspicious or unusual claims.
