Parliament's $100B small business relief program mostly went to large corporations: Report

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A massive pandemic relief program intended to help out small businesses instead bankrolled large corporations, according to Blacklocks.

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The $100 billion pandemic relief program went awry, according to Statistics Canada data disclosed earlier this week. Large corporations were three times as likely as small business to receive the Canada Emergency Wage Subsidy, Blacklocks reported.

“Smallest businesses have the lowest usage rates,” said a Statistics Canada report. “Less capital intensive small businesses may have lower fixed costs than more capital intensive larger businesses.”

“Thus it may be better for the smallest businesses to close rather than to continue operating,” said the report on The Canada Emergency Wage Subsidy Program And Business Survival And Growth During The Covid-19 Pandemic In Canada.

Back in March of 2020, Parliament passed Bill C-13 — an act respecting certain measures in response to Covid-19 — to offer a 10% wage subsidy to small businesses facing insolvency.

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Prime Minister Justin Trudeau at the time said the program was crucial for small business.

“Right across the country it’s going to keep businesses and workers connected,” Trudeau told reporters on April 27, 2020. “That gives people certainty they will have a job now and in the months to come.”

But only 29% of small operators with fewer than five employees received subsidies under the program, StatsCan said. Thirteen percent of small businesses closed.

By comparison, 61% of large corporations with more than 100 employees received subsidies. Only 2% of them closed.

The program paid $100.2 billion in subsidies to 459,070 businesses, by official estimate. Rules allowed payments to publicly-traded corporations that issued shareholder dividends, and Canadian subsidiaries of foreign corporations, including the Bank of China, Habib Bank of Pakistan and Shinhan Bank of South Korea.