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

New video takes viewers soaring over Cultus Lake

Posted to YouTube, the vid showcases the natural beauty of the lake and its surroundings

Chilliwack Community Services ends Community Driver program

The volunteer-driven offering helped clients get to important medical appointments

CRIME STOPPERS: ‘Most wanted’ for the week of Sept. 27

Crime Stoppers’ weekly list based on information provided by police investigators

Action demanded over death of First Nations youth in Abbotsford group home

Family and Indigenous organizations push for thorough investigation

COVID-19 testing centre opens at Fraser Canyon Hospital

30 tests can be done at the collection centre each day, health authority reccommends booking ahead

105 new COVID-19 cases, 1 death as health officials urge B.C. to remember safety protocols

There are currently 1268 active cases, with 3,337 people under public health monitoring

Another death as COVID-19 outbreak at Delta Hospital climbs to 18 cases

Total of 12 patients and six staff in one unit have tested positive for COVID-19: Fraser Health

B.C. nurses report rise in depression, anxiety, exhaustion due to pandemic

A new UBC study looks into how the COVID-19 response has impacted frontline nurses

National child-care plan could help Canada rebound from COVID-induced economic crisis: prof

A $2 billion investment this year could help parents during second wave of pandemic

Search suspended for Indigenous elder last seen mushroom picking in northwest B.C.

Mushroom picker Thomas (Tommy) Dennis has been missing since Sept. 16

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

16 MLAs retiring from B.C. politics add up to $20M in pensions: Taxpayers Federation

Taxpayers pay $4 for every dollar MLAs contribute to their pensions

‘Bonnie’ and ‘Henry’ among latest litter of service dog puppies

B.C. Alberta Guide Dogs names two pups after provincial health officer

Permanent fish-passage solutions considered at Big Bar landslide

151,000 salmon detected this year north of site

Most Read