Conservative Shadow Minister for Finance Pierre Poilievre, spoke with the Minister of Finance, Bill Morneau on Monday April 20thto suggest fixes to the COVID-19 rescue package.
Below is a readout of the issues raised:
Canada Emergency Business Account
- Problem: Sole Proprietors and other entrepreneurs that use a personal checking account for business operations are not eligible for the Canada Emergency Business Account. Only incorporated businesses with pre-existing business bank accounts are eligible. Many real estate agents and other owner-operators use their personal checking accounts for all business transactions. For this reason, they cannot get the emergency business account. The government should remove this restriction.
- Problem: Many legitimate small businesses do not have the $20,000 in payroll to qualify of the Canadian Emergency Business Account. Small family businesses often run without a payroll. Family members are paid in equity in the business and they all agree to put all revenues back into the company instead of paying themselves in wages or dividends.
Canada Emergency Wage Subsidy
- Problem: Businesses that have acquired another enterprise, experience an artificial revenue increase, disqualifying them from the wage subsidy.
- Example: Company A has $100 in revenue and buys Company B which has $100 revenue ($200 combined). Because of the COVID-19 lockdown the revenue of the combined entity is down to $125, a loss of $75. However, Company A appears to have a 25% artificial revenue increase (from $100 to $125) even though there is a real loss. The result is that a company with a massive revenue decline is not eligible for the wage subsidy and needs to lay people off.
- Conservatives are asking for the government to provide solutions for companies in this situation.
- We continue to call on the government to refund small businesses the GST they have remitted to the government over the last 12 months. This would leave a small business with tens of thousands of extra dollars for rent, property taxes or loan payments to stay alive.