Wage subsidy not quite in nick of time for some As employers scramble to apply for program, some fear they'll fall between the cracks By: Dylan Robertson Posted: 7:00 PM CDT Tuesday, Apr. 28, 2020

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This article was published 27/04/2020 (1705 days ago), so information in it may no longer be current.

OTTAWA — Manitoba businesses joined a Monday rush to access the new federal wage subsidy, but the program has come too late for some of the province’s employers.

“It’s like a tsunami that just came out of right field,” said Ken Walford, head of WR Display & Packaging, a Winnipeg-based firm with operations across Canada.

The company has endured downturns and recessions since the 1940s, but none compare to the COVID-19 shutdown.

“This is impossible to muscle through,” said Walford.

WR is among at least 30,000 businesses that applied for the Canada Emergency Wage Subsidy (CEWS) on Monday, the day applications opened.

CEWS covers 75 per cent of an employee’s wages, up to $847 per week, for businesses that can prove a sharp decline in revenue caused by the coronavirus pandemic. The program is retroactive to mid-March, but funds only start to flow May 7.

Estimated at $73 billion, it’s the largest chunk of Ottawa’s spending to keep the economy on life support during the COVID-19 slowdown.

Walford hopes the funding can support his 41 employees, 30 of whom work out of Manitoba. Currently, only 17 are on the payroll, with business down by roughly 60 per cent.

Applying for all those employees took Walford five hours, and the CEWS forms estimated he could get $84,000 for the period between March 15 and April 13. During that period, he gradually laid off employees and cut hours.

“This is critical to keeping my company going,” said Walford, who plans to bring back employees on a part-time basis.

Instead of making signs, his firm has shifted largely into packaging and labels, as entrepreneurs try to keep above water by delivering goods directly to customers.

Others want crowd-control posts, acrylic cashier barriers and floor stickers asking people to stand back. That business doesn’t make up for the costs of rent, internet and wages.

Diner chain Salisbury House hopes the wage subsidy will bring back employees, along with an uptick in “heat-and-eat” meals.

Company controller Renan Pires spent an hour and 45 minutes on the phone Monday with the Canada Revenue Agency, over issues with the online forms.

But rather than getting frustrated or despondent, Pires felt positive.

“That is the least of our problems,” Pires said. “These are unprecedented times.”

Before COVID-19, Sals had about 400 employees, which dropped to 382 by late March, and 53 as of the last payroll.

Of its 13 locations, six are active, while the Steinbach branch is set reopen soon.

“This 75 per cent wage subsidy from the government was a great lifeline they threw us. The rent subsidy was the last thing we really needed,” said company CEO Brad Kramble.

In a poll this past weekend, the Canadian Federation of Independent Business (CFIB) found a quarter of 350 surveyed Manitoba small businesses won’t apply for the CEWS, of whom 27 per cent said they don’t qualify and one-fifth said it’s too late to bring back laid-off workers.

The poll found 70 per cent of Manitoba businesses had seen a drop in revenues of 30 per cent or more since the start of the outbreak — the main criteria for qualifying for CEWS — while one-tenth made no sales at all.

In Osborne Village, the owner of Rooster Shoes and Silver Lotus said she’s hoping to get five of her 13 employees onto the wage subsidy. Judy Coy said that includes her three daughters, who are collecting the emergency benefit and working without a salary.

Customers are buying gift cards, as well as small gifts, jewelry and fresh flowers. Coy’s landlord has put off rent payments until the end of the year.

“We haven’t shut the doors, and we’re feeling positive — so far,” Coy said.

“The government is doing a pretty good job; it is panic mode.”

Across the road, the owner of East Asian gift store Unique Bunny, Fiona Zhao, says she is waiting for her bookkeeper to determine whether she qualifies for the wage subsidy.

She fears falling into a crack between having too much business to qualify, but not enough to be long-term sustainable, particularly rent.

“Nobody is going out and nobody’s having a birthday,” said Zhao, who’s had a huge increase in Asian-snack purchases online that help make up for a near collapse in skincare and stationery sales.

“We’re trying to hang in here by ourselves.”

— with files from Martin Cash

dylan.robertson@freepress.mb.ca