Thank you.
I also don't think the wage subsidy is needed for every employee across all sectors. If an organization only requires support for a few employees, just support what is needed, not the entire organization.
Those are what I think are my imperfect solutions.
Turning now to the proposed 75% wage subsidy, unfortunately draft legislation is still not available to the public and I would encourage its release ASAP. It is critical. I am not sure why it's being restricted to such a small group of people and media.
Based on the releases by the Department of Finance to date, there are significant problems with these proposals. Unfortunately, given my time limitations the problems are too numerous to list today, but interested readers or listeners can look to our firm's blog on the topic. In my written notes I've provided a hyperlink to that blog.
The long list of issues that we discussed in the blog can be put into two very general camps. The first camp is the speed of the delivery of the needed financial assistance. Three to six weeks is simply way too long. However, I appreciate the predicament the government is likely in. I loosely understand that the government's ability to deliver funding cannot easily be accelerated given the constraints with technology, and there is likely not enough time to come to an effective agreement with our Canadian banks to help accelerate the delivery of such funds.
The speed lever is likely not one that can be easily pulled, but creative out-of-the-box thinking can help here. For example, allow reductions against the payroll income tax remittances like the 10% wage subsidy provides for, or immediately refund previously remitted payroll and/or GST-HST remittances for a limited period. These can all likely assist in speeding up delivery of funds.
The second camp is the complexity camp for the 75% wage subsidy program. The revenue decline test, with various amendments announced yesterday by the Department of Finance, is far too complex with more questions than answers for the average business owner to figure out on their own. For example, such a revenue decline test does not deal with many businesses that are start-ups, such as technology companies, which may not have any revenue but have many employees. These companies operate with the expectations that they'll have revenue later in their business cycle, but they will not meet the revenue decline test as currently outlined.
The revenue decline test, without a doubt, will require professional help for many to ensure that their attestations are correct to confirm their eligibility and to avoid the harsh penalties if they get it wrong.
There is plenty of opportunity to pull the reduced complexity lever, in my opinion. Of course, pulling that lever will result in imperfect solutions and some leakage, but I ask you, what is worse: one, putting immediate financial assistance in the hands of desperate small business owners with a system that is a little rough around the edges in terms of eligibility and delivery, but cuts a wide swath; or two, crafting a more perfect system that will deliver funds to people who perhaps need it more than others and that can reduce the incidence of bad actors, but comes with tremendous complexity?
In these very challenging times I choose the simple, but less perfect solution. There will be plenty of time for perfect or better solutions later. Implementing a complex system like the proposed 75% wage subsidy will prohibit the success of what I believe should be the intention of government, which is to provide financial assistance to business owners who need it now.
Canadian small business owners, who are obviously the lifeblood of our country's economy, need financial help now. Like most Canadians, small business owners are worried and scared, and in some cases their lifelong efforts, which required blood, sweat and tears to build, are in danger of disappearing along with their employees' ability to earn a living. If they were provided with real and simple assistance to get them through this difficult time, they would be in a much better position to ensure that their lives would remain intact, along with their employees, and they would be in a much better position to get themselves and our country ready for the economic recovery that will inevitably occur.
Thank you.