More than 85 per cent of dealers have utilized the federal government’s emergency wage subsidy, a new survey conducted by the Canadian Automobile Dealers Association (CADA) found.
But a growing number of dealers said they would no longer qualify for the program, spurring the CADA to reiterate its push for the government to revamp the program to allow more businesses to qualify as economic activity resumes.
“The challenge now is as revenue begins to return, access to [the wage subsidy] is measured by an all-or-nothing approach of a 30-per-cent revenue decline for a 75-per-cent wage subsidy,” CADA CEO Tim Reuss said in a statement.
The Canada Emergency Wage Subsidy was extended in May to last through late August. It covers 75 per cent of wages for employers who lost a minimum of 30 per cent of their revenue compared with a year earlier. It covers up to $847 per worker per week.
The CADA in recent weeks has urged Ottawa to revamp the program, which dealers have credited for allowing them to rehire workers.
Reuss called for the government to create a “scaled” version, which would allow businesses with revenue declines of less than 30 per cent to still qualify for support. Prime Minister Justin Trudeau in mid-May said the government would look at making adjustments to avoid “unintended consequences,” such as businesses feeling they need to hold back on growth in order to continue qualifying for aid.
“We've started the conversation with government on whether there is a way the CEWS can be scaled according to revenue - for instance, implementing lower subsidy levels at revenue declines of 20 per cent and 10 per cent,” Reuss said.
According to the CADA, the latest edition of its monthly survey of members found that “over 85 per cent” of dealers took advantage of the program, with 92 per cent of those dealers saying it was “easy to use.”
The CADA said it received responses from 425 respondents representing 867 dealerships in Canada. The survey was conducted from June 1 to June 5.
The association said 30 per cent of dealerships have seen new-vehicle sales revenue fall by more than half from 2019, down from 80 per cent of dealerships surveyed in May. Another 47 per cent of respondents said revenue was down between 25 per cent and 50 per cent from a year earlier. Another 15 per cent said they were down between 5 and 25 per cent from 2019. The CADA said “a large bulk” of those dealerships no longer qualify for CEWS.
