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

Four exhibits on display at Penticton Art Gallery

Indigenous art and art inspired by the pandemic are on display until Nov. 7

Two new COVID-19 cases announced in Interior Health region

The total number of cases in the region is at 533

Regional District of Okanagan-Similkameen compost project receives recognition

Federation of Canadian Municipalities names regional district for environmental leadership

More wildfire smoke to fill the Okanagan

The smoke is coming from wildfires in California but is expected to be much lighter

B.C. counts 125 new COVID-19 cases, up to 1,284 active

No new deaths or health care facility outbreaks

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Winter tires, chains now mandatory along most B.C. highways

Drivers without the proper winter tires – which must also be in good condition – can be fined $109

Documentary to celebrate the Shuswap’s music scene

Local initiative to feature several of the region’s artists

Guns seized in relation to southeast Kelowna murder investigation

RCMP seized several firearms from a West Kelowna home on Tuesday

Health Canada green-lights rapid COVID-19 test

Health Canada approved the BCube test from Hyris Ltd. in the United Kingdom Sept. 23

First Nations Health Authority chief medical officer concerned with rising COVID-19 cases

“There’s still so much we don’t know and we’re learning everyday about this particular virus.”

FINLAYSON: COVID-related job losses concentrated in urban areas… especially Metro Vancouver

The biggest job losses, in absolute terms, have been in Metro Vancouver

6 puppies rescued in mass seizure on Princeton farm die from illness: BC SPCA

Of the 97 distressed horses, cats and dogs seized, most of the puppies suffered from parvo

Most Read