Wage subsidy a lifeline for local businesses

As some local businesses call back staff after emergency orders were lifted in Hamilton last week, many continue to rely on federal support for employee wages.

For local businesses, a decline in sales or in-person customer interactions does not necessarily translate to less work, especially with a skeleton staff" left, said Mark Furukawa, owner of Dr. Disc record store.

With the wage subsidy, that's the only way we really could have kept going during curbside service, because there just wasn't enough revenue coming in to cover all the bills," he said.

Since April, the Canada Emergency Wage Subsidy (CEWS) has provided more than $65.6 billion to businesses, non-profits, charities, and other organizations to back 75 per cent of wages.

As of Feb. 14, at least 426,200 employers have received the benefit, with more than 2.6 million applications approved by the Canada Revenue Agency (CRA) so far. Of those, about 2.5 million applications were approved for claims under $100,000, and at the top end, about 450 applications greenlit for more than $5 million.

The amount that each organization has received is not listed in the CEWS registry - a CRA-hosted, public database that launched on Dec. 21 - which lists the legal business name and operating name of benefit recipients. As of last month, the CRA had reviewed about 1,100 tips regarding suspected misuse or benefit cheating, spokesperson Sylvie Branch said in an email.

Branch said the CRA could not provide The Spec a list of businesses registered to a Hamilton address due to privacy provisions in the Income Tax Act, which was amended to allow the agency to publish applicant names only.

Some of Hamilton's well-known employers, including Stelco and the charitable arms of St. Joseph's Healthcare and Hamilton Health Sciences, appear on the list, alongside Forge FC soccer club, local arts councils, manufacturing companies, houses of worship, and others.

Torstar Local Ltd. and Torstar Group, that company that owns The Hamilton Spectator, also received funding through the CEWS.

Some companies have drawn public ire for receiving the money while making staff cuts, amplifying calls for increased transparency from the CRA on funding amounts. These cases underscore how the benefit distribution is more a question of the spirit of the rules, than the letter of the rules," said Aaron Wudrick, director of the Canadian Taxpayers Federation.

The wage subsidy is a very blunt instrument. They had to pick a line," for an eligibility threshold, Wudrick said. The problem is the line doesn't take into account a lot of other factors," such as profitability after the application period, he said, pointing to employers like Bell Media, which came under fire for continuing to pay out dividends to shareholders despite receiving CEWS and laying off staff.

For another cornerstone to the local arts community, the CEWS program was a lifeline.

I can't say much more than thank God that we have that, because it would be a sad story," said Vitek Wincza, artistic director at the Hamilton Conservatory for the Arts.

The federal subsidy has allowed him to bring back staff and a pay-as-you-can program to support the school, which runs dance, music, theatre and visual arts programs.

The side effect of that help was that it was directed to the parents and to the children of our community," he said.

Vjosa Isai is a Hamilton-based business reporter at The Spectator. Reach her via email: visai@thespec.com.