As the federal government responds to the COVID-19 crisis, rapid substantial support for jobs is a critical piece. Across the economy, businesses and not-for-profits are losing revenue and laying workers off. A chain reaction from job loss would be a major reason why people anticipate a deep recession and double-digit unemployment.
In this edition of Graphic Intelligence, we show how Ottawa’s announcement to cover wage costs alters the chain reaction and mitigates the economic impacts of COVID-19.
Ottawa has delivered up to 75 percent on wage support for workers still on the job. This would complement the Canada Emergency Response Benefit (CERB), and reduce the number of people who need that assistance. As a practical matter for design details to come soon, the mechanics of sending money to employers will take time. So the federal government’s creation of the Canada Emergency Business Account with government-backed lines of credit is a bridge until then. This government guarantee of up to $40,000 means companies can have access to critical funds within days, and allow an employer to access credit equal to the wage subsidy from a bank or credit union.
For more details on how this 1-2 punch works together, see "An Ounce of Layoff Prevention is Worth a Pound of Income-Support Cure."