Wage subsidy extension into 2021 critical for tourism sector to survive: industry

OTTAWA — A coalition of organizations representing the tourism sector says the federal government must keep its wage-subsidy program in place well into next year to help businesses with dire prospects for recovery from the COVID-19 pandemic.

Forty organizations have banded together to form a “coalition of hardest hit businesses” to place public pressure on the Liberal government to rethink the planned phaseout of the Canada Emergency Wage Subsidy program beginning this month.

The program sees the federal government cover as much as 75 per cent of wages depending on how much revenue a business has lost due to COVID-19.

But the government intends to start scaling back the program with an eye toward eliminating it in entirely at the end of the year. 

“Winding down and phasing out the CEWS program for all businesses at the same time does not make sense,” Susie Grynol, president of the Hotel Association of Canada, said during a press conference Thursday.

“It must be acknowledged that while some are allowed to recover, others are not and this supports program should reflect this reality.”

Grynol said in a recent survey of tourism-industry operators, the vast majority pegged their ability to remain solvent in the coming months on government supports, given ongoing restrictions designed to slow the spread of COVID-19. 

“Our sectors are different, we cannot offer curbside pickup (or) e-commerce or pivot to manufacturing new products,” Grynol said. 

“We are fundamentally people-facing businesses, we bring people together, which limits our ability to function during a global pandemic.”

As of Sept. 13, the federal government says it has provided subsidies worth $35.31 billion to businesses. The parliamentary budget office reported last month that by year’s end, the program could cost as much as $67.9 billion.

The intention of the CEWS program was to keep employees connected to their jobs so they’d be ready to work as soon as conditions improved, but Grynol and others said for the tourism sector, a return to something approaching normal won’t happen until next summer.

“In a post-COVID-19 reality, Canadians will still want a Calgary Stampede, a Toronto International Film Festival, a jazz festival in Montreal, a Carnaval in Quebec, an Ottawa Bluesfest and so on,” said Martin Roy, executive director of Major Events and Festivals Canada

“Festivals and events are part of our identity and we need employees to organize them now and in the coming months.”

When asked Thursday whether the federal government is considering further wage subsidy extensions, Economic Development Minister Melanie Joly’s office was non-committal, saying one of the reasons the program was extended until year-end was to help the tourism industry.

In a statement, her office also pointed to various regional funds, as well as $110 million in dedicated funding for the tourism sector, as measures being taken to help.

“Our message to Canada’s tourism sector and those whose livelihoods depend on it is clear: we’ve been here for you with immediate measures, we’re here for you as our economy reopens and we’ll get through this together,” spokesman Alexander Cohen said in an email.

Many eyes are on next week’s throne speech to see how the Liberal government intends to move forward with pandemic-related programs, given the increased number of COVID-19 cases in Canada and the threat that could pose to economic recovery.

On Thursday, the Canadian Federation of Independent Business issued its wish-list for the throne speech as well.

That organization estimates that one in seven businesses is at risk of permanent closure.

It’s are calling for an expansion to an existing business-loan program and an overhaul to rent assistance that would allow tenants to access the funds directly, rather than relying on landlord participation.

This report by The Canadian Press was first published Sept. 17, 2020.

Stephanie Levitz, The Canadian Press