Business organizations said they were pleased with details announced Monday about the federal government’s proposed wage subsidy, but also said more information is needed fast.

Prime Minister Justin Trudeau elaborated Monday on a wage subsidy first announced last Friday. He said the subsidy will apply to large and small businesses as well as charities, and will cover 75 per cent of the first $58,700 of an employee’s salary. That works out to a maximum of $847 a week, Trudeau said.

Businesses will need to demonstrate a 30 per cent loss of revenue due to the COVID-19 pandemic in order to qualify.

“We’re already hearing from members who feel 30 per cent may be a big hill,” said Dan Kelly, president of the Canadian Federation of Independent Business.

He said it’s reasonable for the government to implement a test for businesses to show that the pandemic is having an impact on them, but that 30 per cent loss may be too high a bar. He pointed out that there have been businesses that are not so much struggling with major losses of revenue, but with skyrocketing expenses, as the price of supplies goes up.

“The government is open to feedback,” Kelly said, “and I think the government will need to be open to a variety of tests.”

The business community had been urging government to implement a wage subsidy similar to some countries in Europe that have also been dealing with massive job losses due to the COVID-19 pandemic. The Liberals had initially announced a 10 per cent wage subsidy for small businesses, which was roundly criticized as too low.

Trudeau then announced the 75 per cent wage subsidy on Friday. Business leaders say a substantial wage subsidy offers the best chance for a business to rebound once the pandemic is over, as it allows businesses to keep employees on the payroll rather than push workers onto EI.

“I think it averted a lot of layoff decisions that were pending this week,” said Karl Littler, senior-vice president of public affairs at the Retail Council of Canada.

The president and CEO of the Ontario Chamber of Commerce, Rocco Rossi, said a wage subsidy also ensures that the money gets into employees’ pockets faster than the EI system.

He said the mechanism to make this all happen still needs to be spelled out, such as how money for the subsidy will flow from government to employers. More details were expected to be announced Tuesday.

“The quicker this all happens, the more confusion is eliminated and the more efficiency is created,” he said. “The system is already being overwhelmed by a lack of clarity.”

Trudeau repeated Monday that payments will be retroactive to March 15. He urged companies eligible for the subsidy to rehire employees who have already been laid off, and also asked businesses to pay the 25 per cent not covered by the subsidy if they’re able to do so.

“And if you think this is a system you can take advantage of or game, don’t. There will be serious consequences for those who do,” Trudeau said at his daily briefing to reporters outside his home in Ottawa on Monday.

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The estimated cost of the subsidy is also expected to be revealed Tuesday.

The federal bailout package to date is now valued at more than $200 billion, including $52 billion in direct spending, $85 billion in tax deferrals for individuals and businesses, and $65 billion in loans. Last week, TD Economics estimated the increased wage subsidy could add $25 billion in direct spending to the total.

With files from The Canadian Press

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