The new Canadian Emergency Wage Subsidy is a brand new program created by the Liberal Party of Canada that would provide 75% of a workers wage to workers who have had significant cuts in hours due to the current Covid 19 crisis. Originally planned to be a 10% payment, calls from Jagmeet Singh to raise the subsidy to 75% were eventually implemented and businesses can now apply. The bill finally passed in the House of Commons, although businesses wont likely see payments for at least another month.
While the Canadian Emergency Response Benefit and changes to Employment Insurance were finalized quickly, it is the wage subsidy program that should have been implemented first.
During the financial crash of 2008, Germany implemented a similar program, and it was very successful. This program, called the Kurzarbeit—German for “short-work”— had been in place since the early 1900’s as a worker protection and because it was already set up and ready to go, is credited for Germany’s relatively swift recovery from the financial crash.
The reason why these programs work so well is twofold: they allow steady income for workers who are required to stay home or work fewer hours, and they eliminate the need for workers to be laid off and then find another job once the economy picks up again. Workers can stay on the payroll and gradually increase hours as the company ramps up production again. It is estimated that over 1 million jobs were lost during March of 2020, the highest amount of job loss ever in Canada. Overall, 3.1 million Canadians either lost their jobs or were forced to work significantly less than usual, if at all, because of COVID-19.
The 1 million jobs lost could have been completely avoided if the wage subsidy program was already in place.
The program should also be expanded to cover those that fall through the cracks such as students looking to gain summer work and gig economy workers who are often self employed.
If the current government wants to avoid monstrous job loss figures in the future, the current wage subsidy program should be expanded and bolstered up to catch those who fall through the cracks. This way, when the next pandemic hits, or the next recession happens, we will be prepared and the program will already be in place.