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

NDP calls snap election, Milobar running for re-election

B.C. Premier John Horgan announced on Monday that he will officially terminate… Continue reading

Citing stability, B.C. Premier calls snap election for Oct. 24

John Horgan meets with Lieutenant Governor to request vote

Williams Lake First Nation inks historic cannabis deal with B.C. government

The agreement paves the way for WLFN to sell cannabis to the government, and open stores across B.C.

Unofficial holidays: Here’s what people are celebrating for the week of Sept. 20 to 26

Rabbit Day, Hobbit Day and One-Hit Wonder Day are all coming up this week

Interior Health reports three additional COVID-19 cases in region

The number of cases in the region since the beginning of the pandemic are now at 492

COVID-19: 4 more deaths, 366 new cases in B.C. since Friday

A total of 8,208 people in B.C. have tested positive for COVID-19 since January

First full day of B.C.’s election campaign begins amid COVID-19 pandemic

B.C. Liberal Leader Andrew Wilkinson and the Green party’s Sonia Furstenau criticized John Horgan’s decision

RCMP issue two $2,300 COVID fines at same Metro Vancouver vacation rental within 24 hours

Cpl. Mike Kalanj said it was ‘quite frankly appalling’ to see parties breaking COVID-19 rules

Here’s how voting amid a pandemic will happen in B.C.

Elections BC has worked with the provincial health office to determine safety protocols for voting

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

B.C. privacy commissioner will hear First Nations complaints about COVID

The hearing will rely on written submissions from the Indigenous governments as well as the Ministry of Health

Majority of Canadians support wearing masks during COVID-19, oppose protests: poll

Nearly 90 per cent felt wearing a mask was a civic duty because it protects others from COVID-19

Paper towel in short supply as people stay home, clean more, industry leader says

While toilet paper consumption has returned to normal levels, paper towel sales continue to outpace pre-COVID levels

Most Read