The federal government announced today that their new wage subsidy program will cost an estimated $71 billion dollars. That is huge money, even by Ottawa standards. According to Finance Minister Bill Morneau, it’s the biggest Canadian financial rescue package ever. Tens of thousands of companies and organizations will benefit by it. But inevitably there will also be thousands of companies and organizations that fall through the cracks. It boils down to whether or not they meet the criteria.
The criteria of course is somewhat arbitrary. The rules says that you need to show that your revenues have fallen 30% from last year in the months of March, April, May etc. Companies will need to apply every month demonstrating that their revenues were still down by 30% or more. This raises questions like, why 30% and not 25% or 35%? Depending on how close to the line a company was operating and how mature the company is, a 10% fall in revenues could be all it takes to turn the lights out on someone’s dream. Why did Finance settle on 30%?
The answer in part is that it was probably a negotiation between business organizations and finance officials. With great respect to the very bright people who work at the Department of Finance, they need input from the people who create jobs.
Recall that the initial proposal from the Department of Finance was for a wage subsidy of just 10% per worker’s paycheck. Business organizations complained loudly and lobbied hard. Finance realized how badly out of step they were and increased it to 75%. That’s what happens when people like you aren’t at the table explaining reality to those excellent public servants.
So then, the answer to the question you were about to ask is, yes, effective government relations can make a big difference. In this case it made a difference of somewhere around $65 billion dollars. The truth is that tens of thousands of businesses will survive this crisis thanks in part to the hard work of government relations professionals. We’re not so bad after all!
There are lessons here.