Former Blackberry CEO Jim Balsillie, seen here in Toronto on June 26, 2019, chairs the Council of Canadian Innovators, which is urging federal officials to revise the conditions for the government’s emergency wage subsidy.
Glenn Lowson/The Globe and Mail
Business leaders and social policy analysts are warning that conditions imposed by the federal government’s multibillion-dollar package of income support measures will leave out many people and employers.
Canada’s community of tech startups is particularly disappointed with the terms announced this week for the federal government’s new Canada Emergency Wage Subsidy to help businesses hit hard by COVID-19, which would give employers funds to cover 75 per cent of wage costs up to $58,700 – or $847 a week.
Finance Minister Bill Morneau announced on Wednesday that employers will have to demonstrate a reduction in revenue of 30 per cent each month in comparison to the same month a year earlier.
Business groups say a company’s monthly income can fluctuate considerably, especially if it is relatively new.
Jim Balsillie, a former chairman and co-CEO of Research in Motion and the current chair of the Council of Canadian Innovators, said many small and medium-sized companies don’t generate monthly income statements.
Mr. Balsillie’s group advocates on behalf of Canadian technology firms and is urging federal officials to revise the rules when legislation to implement the program is tabled in Parliament, likely next week. Mr. Balsillie said many tech entrepreneurs are also concerned that errors in applications could trigger the program’s harsh compliance penalties.
“There’s enormous anxiety,” he said in an interview. His organization is calling for the penalties to be eased, a focus on faster processing, possibly by contracting some of the work out to Canadian tech companies, and changes to the 30-per-cent rule.
“That’s not the right metric,” Mr. Balsillie said, noting that companies are more likely to track activities such as bookings, new subscribers, units shipped or billable hours.
Other business owners and advocacy organizations have also criticized the 30-per-cent rule.
Goldy Hyder, president of the Business Council of Canada, which represents the country’s largest corporations, expressed frustration that the federal government chose to offer a complicated wage-subsidy program.
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“We need to act with some urgency, and we need to keep it simple and not complicate it in a crisis,” he said.
Mr. Morneau responded generally to some of the concerns on Thursday before the House of Commons finance committee, saying the government aims for simplicity and speed.
“We are going as fast as humanly possible,” he said, after the three main opposition parties accused the government of creating delays and confusion. “It’s not as easy as just pressing a button. … I can assure you if we can do it faster, we will in fact get there.”
The government will need the support of opposition parties to pass the legislation quickly.
Bloc Québécois Leader Yves-François Blanchet said in a statement on Thursday that his party is calling for adjustments to the 30-per-cent rule and for Ottawa to cover some of businesses’ operational costs.
John Ruffolo, vice-chair of the Canadian Council of Innovators and former CEO of OMERS Ventures, said the finance department has miscalculated by having the Canada Revenue Agency manage the program.
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“It is going to be doomed to fail,” he said. “They are going to try to build this on the fly. It’s likely there will be massive gridlock on people submitting applications, and they are not designed to understand the needs of different businesses.”
He urged Ottawa to run the wage subsidy program through the banks, which he said could get the money out within 48 hours.
The government has also introduced a program called the Canada Emergency Response Benefit (CERB) to provide up to $500 per week for 16 weeks to people who have lost all income due to COVID-19.
Critics have noted that the CERB leaves out individuals such as contractors who may have lost most, but not all, of their income.
Also on Thursday, the Canadian Centre for Policy Alternatives released a report that said one third of unemployed Canadians will not qualify for Employment Insurance or the CERB. Some of the reasons include the fact that they are among the long-term unemployed or haven’t met the threshold of earning $5,000 over the past year to qualify for the CERB.
In his daily news conference, Prime Minister Justin Trudeau responded to the report by saying the two income support programs will help millions of Canadians, but acknowledged the government has more to do.
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“We know that there are many vulnerable people who won’t be able to access this support who will need extra help,” he said. “We’re making sure that we’re flowing funds through shelters, through non-profits and charitable organizations as well, but there will always be more to do.”
The federal government is widening its promise to subsidize wages for employers affected by COVID-19 to big businesses, non-profits and charities, if they’ve lost 30 per cent or more of their revenues. But he’s warning them not to take advantage of the multibillion-dollar program, and to see that the money goes to workers, not owners.The Canadian Press
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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
