Canadian entities of General Motors, Toyota, Subaru and Mitsubishi received money under the program, as did the four largest suppliers based in Canada: Magna International Inc., Linamar Corp., Martinrea International Inc. and Multimatic Inc. Major dealership groups such as AutoCanada Inc. and the Dilawri Group of Companies — the largest dealer group in the country — used the CEWS.
With a few exceptions, however, it is unknown how much these companies received in funding. The Canada Revenue Agency’s (CRA) CEWS registry, which went live in late December, does not include information about the value of the subsidy received or when it was distributed, instead only disclosing which businesses received assistance.
John Bordignon, Honda Canada spokesman, said the CEWS “was a critical component that helped guide us through difficult business decisions throughout the continuing pandemic and ultimately contributed to Honda Canada maintaining normal operating conditions while limiting the significant impact to our associates and business.”
While annual new-vehicle sales declined 20 per cent in 2020, many of the worst-case scenarios that were envisioned in March and April were avoided, said Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association, which represents the Detroit Three.
“Government had to step in, and they did so in a big way, and they saved a lot of jobs, which is critical” for the auto market, he said. “And I think that has largely helped to avoid some of the worst damage to the economy.”
PROPORTIONAL PAYMENTS
The program is slated to remain in place in its current form through June.
The total scale of government support for individual sectors, including the auto industry, remains unclear. According to the CRA, about 1.9 million applications for wage assistance from 372,950 unique applicants were approved through Dec. 20. In total, the government has paid out $55.4 billion through the program, the CRA said.
The vast majority of those payments — 1.86 million of them paid out over the course of several four-week blocks — were for less than $100,000. According to the CRA, 3,840 payments between $1 million and $5 million have been made. Another 420 were more than $5 million.
At least some of those larger payments were for companies in the auto industry. According to the company’s earnings reports, supplier Linamar received about $108.1 million in assistance through the third quarter. AutoCanada, the country’s only publicly traded dealership group, reported $32.5 million in income from CEWS from March 15 to Sept. 26, most of it in the second quarter.
When asked for comment by Automotive News Canada, other companies declined to reveal the size and frequency of the CEWS subsidies they received. Many, however, said the program was critical to the companies’ ability to remain afloat during the pandemic, particularly during the spring, when manufacturing shut down for two months and sales plummeted.
CRITICAL COMPONENT
Michael Boulaine, spokesman for Toyota Canada, said the CEWS offered support during “what was a very challenging time for our industry.”
A spokeswoman for General Motors Canada called CEWS “an important economic program” for the automaker, while a spokesman for Magna said the program “was an effective way to provide additional financial support to our hard working Canadian employees during the initial stages of the pandemic.”
Robert Karwel, senior manager of automotive practice at J.D. Power Canada, credited the wage subsidy and other government programs, such as the Canada Emergency Response Benefit, for preventing the bottom from falling out under the auto industry and the economy at large.
