OTTAWA – The federal Liberals are facing calls from some of the hardest-hit businesses in the pandemic to make use of the coming budget to extend emergency relief programs beyond June, saying most still need help even as the economy picks up.

The government has targeted June 5 for an end to the federal wage and rent subsidies, and this week extended applications for a popular loan program towards the same time.

The idea would be to see how the economy is faring because the summer arrives, and tweak programs targeting businesses and workers as needed.

Business groups on Wednesday argued that sectors relying on in-person customers aren’t going to recover by the summer and called on the Liberals to extend the wage and rent subsidies until the end of the year.

The Coalition of Hardest Hit Businesses, addressing hotel, tourism, arts, culture and hospitality industries, said about 60 percent of the almost 6,000 companies it represents believe they’ll go under without sustained access to federal support programs.

Susie Grynol, president from the Hotel Association of Canada, said the demise of these companies would hurt rural and remote communities, downtown cores and native economies that rely on tourism.

\”The cost of doing nothing would be far greater compared to cost of supporting these businesses and keeping them intact until they can get to the other side,” she said during a virtual press conference.

Hospitality, travel and tourism saw some of the largest drops in business activities last year as public health restrictions forced their closure, or severely curtailed in-person customers.

The sectors continue to lag behind in recovering from last year’s downturn, slowed by continuing public health measures, including ongoing bans on mass gatherings.

Beth Potter, president from the Tourism Industry Association of Canada, said receipts earned over the suite of sectors represented by the coalition are likely to be down 35 per cent from 2021 figures, meaning a $105-billion industry 2 yrs ago would be down to $68 billion this year.

For those companies, the wage and rent subsidies happen to be a lifeline, Grynol said.

The newest federal figures show the wage subsidy has handed out over $70.2 billion in aid since its launch last year. The latest number of employees whose wages are now being subsidized stood at over 1.3 million, which is the lowest among the program’s 12 pay periods.

The government has additionally provided $1.82 billion in rent relief to 143,110 businesses, including 59,420 companies that received $300 million in lockdown top-ups.

The Canadian Chamber of Commerce said Wednesday that the budget should extend the aid programs, but redesign them to target businesses that need the most help.

The chamber suggested the government adjust eligibility criteria to account for seasonal businesses, and develop targeted policies to help the longer recovery time for sectors relying on face-to-face interactions.

Many businesses have come to depend on federal aid for their financial survival, said Craig Alexander, chief economist at Deloitte Canada.

He also expected purchase of the accommodation sector to drag back this year.

\”When the government programs end or are wound down, I believe we’re going to see a rise of insolvencies and bankruptcies. I actually think that there’s been a lot of damage done that we can’t see,” Alexander said.

\”One of the things that we need to do to promote new investment is to make it easier to launch a business, to encourage entrepreneurs to launch businesses to exchange the businesses that have been lost by the downturn.”

He said governments can alleviate regulations for anyone wanting to open a company, which doesn’t hit the bottom line for politicians worried about ballooning deficits.


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