Canada’s official fiscal watchdog says the federal wage subsidy program may cost more than $14 billion less than what the government estimated. Canada’s Minister of Finance Bill Morneau speaks to media during a press conference in Toronto, Friday, July 17, 2020. THE CANADIAN PRESS/Cole Burston

Budget watchdog says COVID-19 wage subsidy might cost less than predicted

Canada Emergency Wage Subsidy encourages employers to keep their workers on the payroll

Canada’s official fiscal watchdog says the federal wage subsidy program might cost $14 billion less than the government predicted.

A new report today by Parliamentary Budget Office analyst Ben Segel-Brown estimates subsidizing wages for companies during the COVID-19 pandemic will cost $67.9 billion through the end of December.

Finance Minister Bill Morneau estimated in his July fiscal report it would cost $82.3 billion.

Segel-Brown says that figure was prudent at the time because of economic uncertainty and ongoing work to update the program’s rules.

The Canada Emergency Wage Subsidy encourages employers to keep their workers on the payroll even as work slows because of the pandemic by offering to cover as much as 75 per cent of wages.

The program was initially just for three months but it has since been extended and the amount of the subsidy now ranges from 10 per cent to 75 per cent depending on how much a company’s revenues have dropped each month.

The report also expects another $500 million in foregone payroll contributions such as employment insurance, but the costs are offset by an expected $9.1 billion in corporate taxes on the wage subsidy.

That would mean the ultimate cost of the program could be around $59.2 billion.

More than 285,000 employers have been approved for the subsidy as of Aug. 9, and Ottawa has paid out $26.5 billion to date. More than 800,000 employees have seen their wages subsidized.

The maximum weekly benefit in the first four months was $847. That amount will get smaller for most employers each month, until it hits $226 in November. Some companies whose revenues are most affected by the economic shutdowns can apply for a top-up that could increase the amount.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

One person treated for smoke inhalation after Langley fire

Township firefighters were called to Deer Creek Estates Wednesday night

Aldergrove Credit Union and G&F Financial Group announce plans to merge

Combined organization would operate under the name Gulf and Fraser Fishermen’s Credit Union

Tree protection advisory committee members appointed in Langley Township

Volunteers will provide guidance on protection, preservation, and planting of trees in township

Langley4Langley food bank fundraiser extends deadline to Sept. 30

Participants can log activity online and take part in 10 km virtual fun run in Derby Reach

Legion to hold private Remembrance Day ceremony at Cloverdale Cenotaph

General public will not be allowed in Veterans Square for Nov. 11 services this year

BC Liberal Leader talks drug addiction in the Lower Mainland

Drug addiction and public safety a top priority says Andrew Wilkinson

Pandemic derails CP Holiday Train

Canadian Pacific will work to get donations to food banks while also producing an online music concert

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Vanderhoof’s Brian Frenkel takes on top job in tough times

We can get through this, new local government leader says

Mounties cleared by watchdog in fatal shooting of man with schizophrenia in Maple Ridge

Kyaw Din was killed by the RCMP during a mental health incident in August 2019

Local councils important, Horgan says as municipal conference ends

B.C. NDP leader says ‘speed dating’ vital, online or in person

Penticton woman sentenced to one year in prison for manslaughter of teen boyfriend

Kiera Bourque, 24, was sentenced for manslaughter in the 2017 death of Penticton’s Devon Blackmore

Most Read