VANCOUVER — In politics, it’s called a pivot. And in politics, a weekend is an eternity.
Thus the move Monday by the Justin Trudeau government to widen the breadth of its proposed wage subsidy. Plan A was faulty, Plan B is likely less so.
Its initial concept last Friday was to limit the subsidies to small and medium-sized businesses – those with fewer than 500 employees. On the surface that might sound like help for the neediest, but it would have created two artificial classes of Canadian commerce – those underwritten, those left to their own devices.
Now there will be two more natural classes of Canadian commerce – those in severe decline will get help, while those faring short of triage or even prospering will not. Still feels like we might need a Plan C.
Plan B focuses on a magical 30% mark. If a company’s revenues have fallen that much since March 15, the federal government will provide 75% of wages on the first $58,700 per employee. Which means a subsidy of about $44,000. Anything above that is the employer’s to bear.
Why $58,700? It’s an arbitrary number. I couldn’t find any rhyme nor reason for it and not, say, $60,000, but it happens to be the same ceiling for pensionable earnings under the Canada Pension Plan. Trudeau noted a couple of times it means $847 a week for employees via their employers.
But not for every company. Ottawa doesn’t see fit to support those losing 29% or less. It’s an odd way of rewarding those few firms that have lost heavily but found wise ways to not completely crater, or those who know the darkest period is ahead and there is nothing to be done about it. It is also, in a bizarre way, almost an incentive to tank. A graduated system would be fairer if the threshold isn't done away with. The nation’s financial officers and accountants are definitely in the saddle as we speak, and relief for a different threshold of pain seems to be in order.
Trudeau has been treating his daily briefings on support measures the way a political party leader treats an election campaign, with an announcement a day and a news cycle with one message track.
The track Monday could have been that the government is here to help and will not stop until we are smothered in it. Instead it was that big, bad old business had better not monkey around with the numbers and the system. (Which, it might be noted, was what would have easily happened with Plan A; companies of 510 employees would have found themselves magically at a 499 headcount.)
“We are trusting you to do the right thing,” he said, moving into mannerisms cultivated in an earlier career, eventually adding, “And if you think this is a system you can game or take advantage of, don’t.” There will be “serious consequences.”
This had the same stab at gravitas that “stay home” and “the blockades must come down, now.” As message tracks go, we could have used a little more elegance and empathy and slightly less stageplay.
Businesses have been in general freefall for weeks, even months. Most engines are running on fumes or sputtered out. The sudden shock to the demand end of our economics is unprecedented and indefinite. A couple of extra nods in that direction would have been better than to be made grateful to have our money spent on us.
We are all in a trust relationship at the moment. We are having to trust that our authorities have done the right thing by our health. We are having to trust our institutions to lead. We are having to assume companies will do the right thing in this crisis. We are having to trust our friends and families not to have taken unnecessary risks with their health or with ours. We are having to trust ourselves to act ethically and sensibly in this absurdly dangerous time.
We all know there are “serious consequences” for any lapse by anyone. We will remember how each of us behaved during this disastrous period.
It’s the Canadian way to accept these articles of faith at face value, no need to be reminded.
Kirk LaPointe is publisher and editor-in-chief of Business in Vancouver and vice-president, editorial, of Glacier Media.
