The peak season for many businesses is winding down, and the COVID-19 pandemic remains an ongoing concern when it comes to the bottom line.
With all this in mind, a coalition has formed to convince the federal government to extend the life of a wage subsidy program that has helped many of those businesses stay open.
Dubbed the Coalition of Hardest Hit Businesses, the group includes national associations representing the hospitality, tourism, performing arts and events sectors, among others. It wants government to extend the Canada Emergency Wage Subsidy (CEWS) program all the way through to the spring and summer of 2021. The program offers a subsidy of 75 per cent of eligible remuneration an employer pays to an employee, so long as the employer is experiencing a drop in qualifying revenue. As it stands, a planned phase-out of the program begins this month, with the final claim period wrapping up Nov. 21.
According to the coalition’s website — hardesthit.ca— those industries it represents were employing more than two million Canadians prior to the pandemic.
Making the case
Several East Coast organizations are among the coalition’s partners, including Hospitality Newfoundland and Labrador (HNL), Discover Halifax, the Hotel Association of Nova Scotia (HANS), Destination St. John’s and the Tourism Industry Association of Prince Edward Island. Steve Denty, HNL’s board chair, said there’s a strong case to be made for extending the program.
“Ours is an industry that COVID has hit particularly and specifically hard,” Denty told The Telegram. “The regulations and legislation and rules around mass gatherings, we’re very much an industry that operates on face-to-face business. That is the nature of the service industry and hospitality and tourism. By removal of that, whether it’s festivals and events, conferences, meetings — all those things are impacted. The fall and the winter is the time when those are the things that help us navigate the slower months when tourist traffic is down.”
According to a recent Discover Halifax ship survey, from the start of the pandemic in mid-March through to the opening of the Atlantic bubble in early July three-quarters of responding businesses in Halifax reported seeing their revenue cut in half, with almost 60 per cent reporting revenue down by at least 75 per cent. Over 75 per cent of those businesses used the CEWS program.
HANS president Megan Delaney considers the tourism sector to be among the earliest the pandemic impacted, adding it’s been suggested it could be years before the industry fully recovers. In Atlantic Canada, a low coronavirus caseload has allowed businesses to at least open their doors, but operations are not fully back to normal by any means.
“The wage subsidy really enables businesses — whether their capacity is down because the restaurant needs to do social distancing or the hotel that has fewer rooms (occupied) from less people being out there — to remain open and keep their employees on the payroll,” said Delaney, also the general manager at Cambridge Suites Hotel Halifax.
Better alternative
Denty and Ross Jefferson, Discover Halifax’s president and CEO, would both argue that remaining on the job is better for workers than the alternative of collecting Employment Insurance.
“Personally, I think the money by government would be better spent on things like the (CEWS) program than EI,” said Denty, who also manages the Murray Premises Hotel in St. John’s. “This is a program that helps everyone. It gets employees working and contributing to the economy, while also giving businesses a chance to come out of this on the other end.”
“That opportunity for somebody to still be contributing, to have their work reshaped in ways that can still help the company and still financially help the employee, we believe it’s the preferred model,” Jefferson said.
Even with staycations and the Atlantic bubble helping some, Delaney said business was still largely down, and the forecast for the fall and winter does not look great to her. If the wage subsidy does disappear, she would expect to see layoffs.
“I can’t speak for other properties and their specifics,” she said. “Just in regard to business levels and us leaving peak season, I would anticipate that yes, more extensive layoffs would occur.”
Denty credits the federal government for acting quickly to create the program, but added there’s a need to consider what’s at stake when it comes to ensuring the sustainability of the tourism and hospitality sectors. He said businesses in Newfoundland and Labrador within those sectors are still unfortunately in a position to qualify for the CEWS program given the economic realities they’re facing.
“Extending that program to spring and summer of 2021 for hardest hit businesses just makes sense,” Denty said. “We’ve been disproportionately hit. Our workforce has been disproportionately depleted, and this crisis is very serious. Wage subsidy is one tool that can allow businesses to maintain their key employees and have a chance to come out of this and maybe thrive on the other end.”
