Conservative leader demands changes to COVID-19 business support programs
Erin O'Toole also requests pause on tax audits for small businesses facing lost revenue because of COVID-19
Conservative Leader Erin O'Toole says federal support programs still aren't doing enough to help businesses and workers survive the COVID-19 pandemic and is calling for changes so that more can access federal aid going forward.
O'Toole is using his party's third Opposition Day in Parliament — days where opposition parties get to set the agenda of the House of Commons — to present a motion demanding the government provide "additional flexibility" in the commercial rent subsidy, wage subsidy and other support programs.
The effort comes one day after the Liberal government introduced a suite of changes to those programs.
"We aren't talking about enriching businesses here," O'Toole told reporters at a press conference this morning. "We want to make sure requirements are made more flexible so businesses can simply stay open and their employees don't lose their jobs."
The motion also calls for a pause of all audits of small businesses that have received the emergency wage subsidy, until June 2021 at the earliest. O'Toole said "a large number of businesses" have been placed under audit by the Canada Revenue Agency (CRA) since September, placing onerous requirements on them while many are struggling to survive the pandemic's second wave.
"Once again, the Liberals had branded small businesses as potential tax cheats and wanted to investigate them amid a crisis," O'Toole said. "Can you imagine a small business holding on by a thread and having the tax collector descend on you with an audit? I think it's horrible. It's unfair."
O'Toole's position represents something of a reversal for the Conservative party, whose MPs heavily criticized the Liberals during the first phase of the pandemic and called on the government to crack down on fraudulent claims for the Canada emergency response benefit for individuals.
Business groups have responded positively to the Conservative motion. Dan Kelly of the Canadian Federation of Independent Business, which represents thousands of small and medium-sized companies, said the CRA audits have become "fishing expeditions," while the Canadian Chamber of Commerce said pausing them would reduce the burden on businesses while they focus on their economic survival.
CFIB is grateful to <a href="https://twitter.com/erinotoole?ref_src=twsrc%5Etfw">@erinotoole</a> & Conservative MPs for putting forward a motion today to delay small business wage subsidy audits until at least June 2021. These audits have turned into massive fishing expeditions at the worst possible time for small firms.—@CFIB
Government tables subsidy changes
O'Toole's motion comes one day after Finance Minister Chrystia Freeland tabled legislation containing long-awaited changes to the commercial rent subsidy. The previous program was widely criticized as poorly designed and insufficient.
Freeland's changes include the introduction of the Canada emergency rent subsidy (CERS), which replaces the Canada emergency commercial rent assistance (CECRA) program.
The previous rent support scheme, CECRA, relied on landlords to apply for help, which they didn't do in great numbers.
"As much of our country is fighting a second wave of the coronavirus, this support is especially important now for our businesses and our economy," Freeland said at a press conference today. "This is the right thing for us to do and it is the economically smart thing for us to do."
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The new rent subsidy allows businesses, charities and non-profits that have seen their revenues drop to apply directly for the benefit. Businesses that receive support will have up to a maximum of 65 per cent of their eligible expenses covered until Dec. 19.
The draft legislation also includes new "lockdown support" to aid businesses ordered to close by a public health order.
"If our public health officials believe that limited lockdowns are the best way for us to fight the coronavirus, the federal government will step in with additional support for affected businesses," Freeland said.
The legislation also extends the Canada emergency wage subsidy until June 2021.
O'Toole didn't specify what changes his party wants to see to existing programs, beyond those already proposed by the Liberals.
"We're trying to show that we can improve the response and I hope the government sees this," he said.
While NDP Leader Jagmeet Singh said that he's encouraged by the Liberals' proposed changes to the rent subsidy, he signalled his party would support the Conservative motion.
"We would have added that the large, profitable businesses should be audited with a clear view to making sure they pay their fair share," said Singh.
Mixed reaction from business groups
The finance minister's draft legislation has been met with mixed reactions from business groups that have been begging the government for extra aid to help cover costs.
The federal program will cover up to 65 per cent of rent or commercial mortgage interest on a sliding scale based on revenue declines, with an extra 25 per cent available to the hardest-hit firms.
The Canadian Federation of Independent Business sounded a positive note about the legislation but said it wanted to make sure all firms subject to lockdowns or restrictions would qualify for the extra help.
The association is also asking the government to allow companies to apply for rent relief retroactively if their landlords failed to apply in the last few months.
"Rent relief is critical to the survival of many Canadian small businesses, especially with some provinces entering a second lockdown and requiring businesses to close again," said Laura Jones, the association's executive vice-president.
Alla Drigola of the Canadian Chamber of Commerce said that, as written, the legislation doesn't remove arbitrary caps on rent relief that had been a key concern raised with the Liberals when the government revamped the program.
"Unfortunately, businesses in the hardest-hit sectors operating multiple locations continue to be unfairly restricted under this new subsidy cap," said Drigola, the chamber's director of parliamentary affairs and policy for small and medium enterprises.
Drigola added that there appears to be some openness among all parties to amend this part of the bill, known as C-9, before it becomes law.
With files from The Canadian Press