Canada

Which companies are benefiting from Ottawa’s multi-billion-dollar wage subsidy program? The government won’t say — yet

OTTAWA—Billions of dollars are flying out of federal coffers as part of the government’s COVID-19 wage support program.

But which companies are getting the money? Ottawa won’t say — at least not yet.

According to Jeremy Bellefeuille, press secretary to National Revenue Minister Diane Lebouthillier, it’s only a matter of time until it does.

Bellefeuille pointed out that the law passed in April to create the Canada Emergency Wage Subsidy allows the government to publish the names of employers receiving it. He said the government will release a list of them at some unspecified point in time, along with the amount of public money each has received.

“The process for making this information available is still under consideration,” Bellefeuille said by email Monday. He referred further questions to the CRA’s media relations department.

Agency spokesperson Christopher Doody told the Star by email that the CRA plans to “provide an update” on the publication of this information by the end of August. Doody did not answer questions about why it hasn’t been released yet, or what factors are being considered before it is published, but said the CRA “is focusing” on recent changes to extend and expand eligibility for the wage subsidy.

Federal statistics show the government paid out more than $25 billion in wage subsidies to almost 800,000 applicants as of Aug. 2. That included 190 entities that received more than $5 million.

James Cohen, executive director of the anti-corruption group Transparency International Canada, said the government should be as open as possible about how it is spending huge amounts of public money during the pandemic crisis. For the wage subsidy, that transparency would be increased if Canada created a registry that makes it easier to see who owns companies in this country.

“Additional transparency is key during this time,” Cohen said. “Canadians are hurting and need help, but they also need to trust the process, that the help is being distributed correctly, is being overseen correctly.”

Others questioned the need for the government to release which companies are receiving how much from the wage subsidy.

Kevin Page, the former Parliamentary Budget Officer and president of the University of Ottawa’s Institute of Fiscal Studies and Democracy, said Monday that “a case can be made that we do not need company-specific information” about the wage subsidy.

He said general information about company sizes and industries could be enough to evaluate the program’s performance, and regular government audits “should be sufficient” to monitor how the money is spent.

“To qualify, firms need to demonstrate significant year over year declines in revenues. While this should not be surprising in an economy that is shrinking by record amounts (post Depression) in 2020, it may be sensitive to business and employees,” Page wrote by email.

Billed as a key plank in the federal government’s response to the COVID-19 pandemic, the wage subsidy is designed to help businesses, non-profits, political parties and other entities keep workers on their payrolls as revenues are battered amid this year’s economic turbulence. In recent months, applications for the wage subsidy trailed those of the more-popular Canada Emergency Response Benefit for people who lost work during the pandemic.

Last month, Parliament extended the life of the subsidy program and broadened its eligibility criteria, so that companies that have lost less than 30 per cent revenue during the pandemic can now qualify for the subsidy.

Allan Lanthier, a former government adviser and retired partner of an international accounting firm, argues the expanded wage subsidy — and the loosening of the requirement to have experienced a 30-per-cent revenue decline — lets corporations that don’t need Ottawa’s help receive public money anyway during the crisis.

But Lanthier questioned whether the government could release how much companies get from the wage subsidy without breaching confidentiality rules in the Income Tax Act. He said he would rather see a better designed program that doesn’t “open the door to major corporations” that don’t need government help.

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“Rather than publishing the names, I think they should have written the rules in a sensible way,” he said.

NDP MP Gord Johns said Monday that his party’s main priority is to pressure the government to ensure more entities can get the wage subsidy to protect jobs during the pandemic. At the same time, however, “we should know where the funds are going when it comes to all of the spending for the pandemic,” he said.

“We need more transparency, and that’s something that we’ve been asking the government for.”

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