The majority of The Logic’s subscribers have applied for government COVID-19 assistance, our most recent survey has found.
Sixty-five per cent of respondents indicated that either they or their company had applied to at least one of the government programs listed in a survey conducted between June 24 and 30. Twenty-eight per cent had not applied to any programs, and seven per cent said they weren’t sure.
The Logic’s subscribers were emailed a private link to an online survey on Wednesday, June 24, and the survey closed Tuesday, June 30. Respondents’ identities were kept anonymous and duplicates were removed as needed. Subscribers were asked whether, to the best of their knowledge, they or their company had applied for any of the following programs: Canada Emergency Response Benefit (CERB), Canada Emergency Wage Subsidy (CEWS), Canada Emergency Business Account (CEBA) interest-free loans, Export Development Canada (EDC) loan guarantee, Business Development Canada (BDC) co-lending program, Regional Relief and Recovery Fund (RRRF), Canada Emergency Commercial Rent Assistance (CECRA), Large Employer Employer Emergency Financing Facility (LEEFF), Canada Emergency Student Benefit (CESB), or “other,” which they were asked to specify. Their choices were: yes, no, I don’t know, prefer not to say. Secondly, they were asked, “How optimistic or pessimistic are you feeling about the Canadian economy’s ability to recover from the pandemic?” They were given the choices: very optimistic, somewhat optimistic, neither optimistic nor pessimistic, somewhat pessimistic, very pessimistic, I don’t know. Thirdly, they were asked whether they agreed or disagreed with the statement “COVID-19 will lead to a prolonged, structural reorganization of the global economy.” Their choices were: strongly disagree, somewhat disagree, neither disagree nor agree, somewhat agree, strongly agree. Finally, they were asked, “Is your company making or anticipating structural changes related to COVID-19?” They were given the choices: yes, no, I don’t know.
And subscribers have been largely satisfied with the relief Ottawa has provided.
“While not perfect, perfect should not be an enemy of good,” one subscriber wrote.
The Canada Emergency Wage Subsidy (CEWS) has seen the greatest uptake among The Logic’s subscribers, with almost half of all respondents applying for the program.
The Canada Revenue Agency has paid out $17.09 billion to date across 555,860 applicants to the program, which provides up to $847 per employee per week to firms whose revenue has significantly declined during the pandemic.
Many subscribers reported positive experiences with the wage subsidy, despite early criticism from innovation-economy executives that the program’s 30 per cent loss-of-business threshold would exclude high-growth, pre-revenue and software-as-a-service firms. In April, Ottawa announced several changes to the program to ensure more high-growth firms qualify.
“CEWS has been invaluable in allowing us to maintain our full employee base,” one subscriber wrote.
Some subscribers mentioned that the wage subsidy was rolled out slowly. Air Canada and WestJet, two of the few Canadian firms that have publicly disclosed using CEWS, had both laid off workers before the program was introduced. They said they were able to bring back workers via the program, although Air Canada has since stopped.
“I think that the federal government was remarkably responsive in getting these programs off of the ground in such short order, and should be commended for the attempt. They have also shown flexibility to adapt the programs to changing information,” one wrote.
Finance Canada has sought feedback from businesses, labour representatives and non-profits on the wage subsidy while seeing slow uptake: the program has paid out only a small fraction of its $73-billion budget. It has since been extended until the end of August, with tech executives calling for it to be further extended until December.
“The government programs [are] optimized for speed rather than precision, but overall I’m satisfied with the effort,” wrote another subscriber.
The $250-million Industrial Research Assistance Program (IRAP) Innovation Assistance Program was introduced in response to initial concern from innovation-economy executives whose firms weren’t eligible for the CEWS. Three respondents to The Logic’s subscriber survey wrote in to say they have applied for the program, including one who said they weren’t ineligible for the CEWS as a high-growth tech firm.
That subscriber still hasn’t seen funds from IRAP, although they said their application was approved.
Thirty-one per cent of respondents to The Logic’s subscriber survey have applied for the Canada Emergency Business Account (CEBA), which provides interest-free, partially forgivable loans up to $40,000.
“The loan was super easy to access and has been really helpful,” one subscriber said. “I’m disappointed to see it’s still not available to sole proprietors.”
The federal government announced in May that it would extend the program to some small businesses with less than $20,000 in 2019 payroll, provided they can prove non-deferrable expenses like rent, utilities and property taxes between $40,000 and $1.5 million. That rollout was planned for June 19, but has been delayed.
One subscriber said that their company doesn’t qualify because their expenses aren’t high enough. “Offering a $40,000 loan to those with at least $40,000 in eligible expenses ignored knowledge workers with limited overhead,” they wrote. “It would have been more helpful to me to receive a smaller loan to cover my smaller expense base, rather than making it all or nothing at the $40,000 hurdle.”
Nineteen per cent of subscribers who responded to the survey have applied for the Canada Emergency Response Benefit (CERB), which has paid out $52.14 billion to 8.06 million applicants as of last count.
“CERB has been a lifesaver,” one subscriber wrote.
Several subscribers pointed out that the benefit, which was recently extended from 16 to 24 weeks, could lay the foundation for a universal basic income (UBI).
“Just make it a UBI and let’s be done with it,” one subscriber said.
“Hope there’s a way to explore how income support like this could continue beyond [the] pandemic period,” another wrote.
Another subscriber was unsure what phasing the program out might look like.
“It’s unclear to me how the government can end the CERB without causing massive devastation,” they wrote.
Nine per cent of respondents have applied to the Business Development Bank of Canada (BDC)’s co-lending program, one of several that have seen slow uptake. Last month, BDC Capital doubled the budget of its Bridge Financing Program to $300 million. CEO Michael Denhem told the House of Commons committee that the Crown corporation had done 23 deals worth $45 million.
Only four per cent of subscribers have applied for the Canada Emergency Commercial Rent Assistance (CECRA) program. Several subscribers said that they’ve been unable to access the rent subsidy because their landlords choose not to participate. Many small businesses have decried the program’s criteria, which provides landlords with forgivable loans if they opt in to cutting tenants’ rent by 75 per cent.
“We have tried on the lease/rent subsidy, but no movement from our landlord,” one subscriber wrote.
As of June 8, the federal government had paid out $39 million in rent relief, a small fraction of the nearly $3 billion budgeted for the program.
Several subscribers said they’ve had difficulty qualifying for programs beyond the CEWS. “Overall, the announcements were large dollars but programs have proven very hard to access,” one respondent wrote.
The Logic also asked subscribers about the Canadian economy’s ability to recover from the pandemic, a recurring survey question we first posed in April. Forty-five per cent of respondents were optimistic about economic recovery; 38 per cent were pessimistic; and 16 per cent were neither optimistic nor pessimistic.
“This is unlike anything our economy (or the world’s economy) has ever had to endure. With so many businesses impacted by COVID-19, it’s hard to predict how, when, or if our economy will recover,” one subscriber said.
Subscribers predicted that recovery will be sector- and region-specific, a theme we’ve seen in previous surveys. Many felt optimistic that the knowledge economy will thrive, while tourism, transportation and the resource-based economy will recover more slowly. But for some, the idea of “recovery” misses the point.
“I don’t think we should recover, if recovery is what it looked like pre-pandemic. I think we have a great opportunity to shape a better economy,” one wrote.
Several subscribers pointed to specific aspects of the government’s response that could affect the economic outlook. “The failure to address childcare/schools will impede our ability in the near/medium term to recover,” one respondent said.
“I have concerns that support will be disproportionately allocated to larger industries or businesses like Air Canada and Bombardier,” another wrote.
For the fourth time since the pandemic began, The Logic asked subscribers whether they believed COVID-19 will lead to a prolonged, structural reorganization of the global economy. Eighty per cent of respondents agreed with that statement, up from 74 per cent in May and 71 per cent when we first asked the question in March. This month, 11 per cent said they did not expect the virus to lead to a structural reorganization, down from 20 per cent in March.
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Finally, The Logic asked subscribers whether their companies were making, or anticipating making, structural changes related to COVID-19. Fifty-eight per cent of respondents reported changes in their workplace, up slightly from 54 per cent last month. In March, when we first asked the question, that number was 68 per cent.
Again this month, several subscribers said that their companies plan to continue working from home and that they’re reducing or closing commercial office space.
A few subscribers said they’ve shifted their businesses to adapt to new demand. One subscriber who works in cleantech said they feel the pandemic is causing the oil and gas industry to closely examine environmental, social and governance issues.
“Aspirations are quickly turning into actions,” they wrote.