Canadian Auto Dealers Get Financial Aid From Federal Government Amid Coronavirus Fallout
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Canadian automotive dealerships will qualify for the federal government’s newly approved wage subsidy for businesses impact by the coronavirus pandemic.
Dealerships had initially expressed concern they would not qualify for the subsidy, as it had been set up only for small and medium-sized Canadian businesses with less than $15 million in assets. However, Prime Minister Justin Trudeau announced Monday the subsidy would be made available for any business that could prove it lost more than 30 percent of its sales due to shutdowns brought on by the pandemic.
With auto sales tanking as Canadians hunker down in their homes to curb the spread of the virus, many auto dealers have experienced at least a 30 percent dip in sales.
The 75 percent wage subsidy will allow employees to pay out a maximum of $847 per employee per week on the first $58,700 that they earn.
“If your businesses’ revenues have decreased by at least 30 per cent because of COVID-19, you will be eligible for this subsidy,” Trudeau said in a statement. “The number of employees you have will not determine whether or not you get this support. It will apply to non-profit organizations and charities as well as companies both big and small. This is about making sure that people are still getting paid whether they work for a business that employs 10 people or a thousand people.”
The Canadian Automobile Dealers Association (CADA) spent the weekend lobbying to ensure vehicle retailers would qualify for the much-needed subsidy program. Additionally, dealers sent out over 1,000 letters to MPs over the weekend, urging them to make the subsidy available to them, Automotive News Canada reports.
In a statement issued Monday, CADA President Tim Reuss said the group “will continue to fight on behalf of dealers, to ensure that they are able to stay open for business, employ hard-working Canadians, and continue to serve customers long after the health pandemic is over.”
Trudeau urged that businesses who are able to cover the remaining 25 percent of employee wages should do so to ensure they have enough cash on hand to get them through the pandemic.
He also issued a warning to businesses looking to capitalize on the program, promising severe penalties for those who try to game the system.
“If you think this is a system you can take advantage of or game, don’t. There will be serious consequences for those who do,” he said.
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