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

Okanagan whisky lottery adds new twists

Winners of Okanagan Spirits’ Laird of Fintry lottery announced in four batches beginning Sept. 28

QUIZ: Do you know what’s on TV?

Fall is normally the time when new television shows are released

Fuel Good Day pumps up Okanagan-Shuswap organizations

Thousands raised by annual Armstrong Regional Co-op fundraiser Sept. 15

Unofficial holidays: Here’s what people are celebrating for the week of Sept. 27 to Oct. 3

World Farm Animals Day, Drink Beer Day and Virus Appreciation Day are all coming up this week

United Way celebrates seven decades of impact in Southern Interior

Organization sees issues with poverty, mental health and addictions, heighten during the pandemic

B.C. records 98 more COVID-19 cases, most in Lower Mainland

One new senior home outbreak, Surrey Memorial outbreak over

Canadian ski resorts wrestle with pandemic-vs.-profit dilemma as COVID-19 persists

Few are actually restricting the total number of skiers they allow on the hill

Three arrested after Keremeos shooting that severely injured one man

The victim was transported by air ambulance to a regional hospital

Victoria-area RCMP locate high-risk sex offender thanks to help of taxi cab driver

Scott Jones wanted on a Canada-wide warrant, ‘a risk to women and girls,’ police say

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

UPDATE: One dead after motorcycle collision on Highway 97 near Peachland

The collision closed Highway 97 off-and-on throughout Sunday afternoon

A (virtual) walk around the world by 88-year-old B.C. man

George Doi says it’s simple: ‘I like walking’

End of CERB means uncertainty for some, new system for others

As of a week ago, the CERB had paid out $79.3 billion to 8.8 million people

West Kelowna Warriors complete sweep of Vernon Vipers

Warriors edge Snakes 2-1 as Okanagan Cup BCHL exhibition tournament begins

Most Read