Canada wage subsidy could reach more trucking companies

A tractor-trailer moving on a street next to a skateboarder in Toronto. More trucking company in Canada could be eligible for the Canada Emergency Wage Subsidy under proposed changes.

Canada’s wage subsidy likely would reach more trucking companies struggling with the impacts of COVID-19 under a proposed revamp announced by the federal government on Friday.

Companies showing less than 30% drop in revenue would be eligible for the Canada Emergency Wage Subsidy under the proposed changes, Finance Minister Bill Morneau said during an appearance in Toronto. The subsidy amount would gradually reduce based on the amount of the revenue decline. 

Proposed changes came as welcome news to the Canadian Trucking Alliance, or CTA. The country’s largest carrier organization has been pushing for a scaled approach to the subsidy, joining a growing chorus of from other industries.

“We like it,” Jonathan Blackham, the Canadian Trucking Alliance’s director of public policy and public affairs, told FreightWaves. “We’re still combing the details, but on the surface, it looks consistent with what our members have wanted.”

Current wage subsidy doesn’t capture many carriers, CTA says

Many trucking companies have utilized the emergency wage subsidy, most prominently Mullen Group, one of Canada’s largest transportation and logistics companies.

But those not meeting the 30% decline haven’t been eligible. In June, the Canadian Trucking Alliance said up 50% of trucking companies did meet all of the qualifications. 

“There’s a huge proportion of our members that fell just below that 30%,” Blackham said.

The Canadian government has paid out about C$20.4 billion (a Canadian dollar is worth US$0.74) to more than 667,000 employers. The wage subsidy covers up to 75% of an employee wage up to C$847 per week (US$624).

Under the proposed changes, the subsidy would also be extended until December 19. Additional support would be available for companies seeing larger drops in revenue. 

Despite the wage subsidy and other federal aid related to COVID-19, carriers continue to face cash flow problems and looming debt payments. The CTA has also pushed for a suspension of payroll tax deductions to free up cash for carriers.

Click for more FreightWaves articles by Nate Tabak.

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