KPMG Poll: Thumb's Up for Redesigned Canada Emergency Wage Subsidy (CEWS)

Three-quarters (76 percent) of respondents say they rely on funds from the wage subsidy to keep their employees on the payroll

A majority of Canadian business leaders surveyed (76 percent) believe the recently redesigned Canada Emergency Wage Subsidy (CEWS) is a good investment to get Canadians back to work and help the economy rebound, finds a new client poll by KPMG in Canada.

"Our clients have told us that the federal wage subsidy program is helping them not only to retain their employees but also to cope with pandemic-related costs and rehire workers who have been laid off," says Lucy Iacovelli, Canadian Managing Partner of KPMG's National Tax practice. "While there has been an upturn in the economy, many Canadian business leaders are still uncertain about what the coming months will bring, and welcome continuing support during this fragile recovery period."

Three-quarters (76 percent) of respondents say they rely on funds from the wage subsidy to keep their employees on the payroll; 53 percent indicated reduced employee wages helps deal with other costs due to COVID-19; with 23 percent saying it has helped them to rehire workers previously laid off.

At the same time, KPMG's 2020 CEO Outlook found that Canadian business leaders are taking action to adjust to pandemic realities by shifting their business strategies to meet emerging demands, industry changes, and more digital ways of working. For example, 84 percent of Canadian CEOs are focusing more capital investment in buying new technology, up from 67 percent pre-COVID-19.

Who should be eligible for the CEWS? The opinion is divided.

The poll findings also reveal the business community is divided as to which companies should receive CEWS support, following the federal government's July 27, 2020 decision to broaden access. Under the new rules, the amount of the wage subsidy varies depending on revenue decline, with a maximum combined subsidy of up to 85 percent for eligible employers. The government has extended the program until November 21, 2020, while leaving the door open to a further possible extension up to December 31, 2020.

In response to these changes, half of the survey respondents (50 percent) agree that offering two different subsidy levels (a "base" and "top-up" amount) is the right approach. However, 48 percent believe that the subsidy should only be available to those businesses or sectors significantly impacted by the downturn. 

"It's clear from the results that business leaders have different perspectives on whether the program should be used to help all companies that have been impacted or just focus on those hardest hit by the pandemic," adds Ms. Iacovelli. "Recent changes have also made the application process more complex, however by extending the deadline to January 31, 2021, for all claim periods, we may see more companies applying into the fall and even retroactively."

The opinion is also divided on the redesign of the program with 44 percent of respondents giving it a positive rating, 24 percent rating the program as average, and 17 percent holding a negative view.

Survey Highlights:

• 44 percent of respondents hold a positive view of the redesigned CEWS program (6 percent called it excellent and 38 percent called it good);
• 24 percent rated the program as average;
• 17 percent hold a negative view (6 percent below average and 11 percent poor);
• 15 percent had no opinion.
• 72 percent were not worried that the public or media would have a negative view or reaction to them applying for the subsidy. 

KPMG's Canada Emergency Wage Subsidy Survey:

In mid-August, KPMG's Tax practice conducted a national client survey of business leaders, company owners, and executive management to share their views about the redesigned CEWS program. The survey garnered nearly 300 responses from senior leaders and clients representing a broad range of industries and sectors (including energy, manufacturing, automotive, mining, construction and real estate, travel and tourism, professional services, telecommunications and media, retail, agri-food, and not-for-profit organizations). Eighty-three percent of all respondents reside in Ontario (38 percent), Alberta (24 percent), and British Columbia (21 percent). A majority of respondents (69 percent) are from privately-owned companies. The survey closed on August 31, 2020.

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