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A bakery employee helps a customer at a take-out window in Vancouver on Nov. 30, 2020.

Marissa Tiel/The Canadian Press

Ottawa promised a mix of new credit and expanded subsidies for the sectors hit hardest by the COVID-19 pandemic in its fall economic statement on Monday, as businesses worry the second wave will be more financially devastating than the first.

The Department of Finance said its new Highly Affected Sectors Credit Availability Program (HASCAP) would help sectors such as tourism, hospitality, air travel and entertainment with fully government-guaranteed financing. Loans of up to $1-million will be available with as long as 10 years to repay and interest below typical market rates, the federal government said without outlining how much it has budgeted for the program.

The Liberal government offered hard-hit sectors varying levels of tailored support as well. More than a billion dollars, for example, will be allocated to the aviation sector, with a focus on regional carriers and airports, infrastructure projects and rent relief. No new direct program was announced for tourism and hospitality. Instead, the government promised to allocate at least a quarter of its Regional Relief and Recovery Fund to local tourism.

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Liberals plan $100-billion in new stimulus spending, begin plotting pandemic recovery

It also promised to increase funding for that program, which flows through regional development agencies and the Community Futures Network of Canada, a support organization for rural businesses, to more than $2-billion from about $1.5-billion.

As well, the Canada Emergency Wage Subsidy’s maximum claim amount will be returned to 75 per cent of employees’ wages as of Dec. 20, after it declined for several months. And the terms of the new Canada Emergency Rent Support program were extended through March 13, with qualifying businesses eligible for up to 65-per-cent rent support depending on revenue loss, with a top-up of 25 per cent if they’re in a locked-down region.

Ottawa said these two programs and its existing Canada Emergency Business Account loans are central to its recovery plan for small businesses. Dan Kelly, head of the Canadian Federation of Independent Business, said in an interview on Monday that the wage and rent support extensions will help entrepreneurs “have more confidence to plan for the near future.” But the lobby group also warned that many new businesses and self-employed entrepreneurs still receive little federal support.

And employees and businesses in some sectors, especially food service, will continue to fall through the cracks.

Oliver & Bonacini Hospitality president Andrew Oliver said the wage-subsidy boost should have been more robust and retroactive to help food-service workers in locked-down cities. Many have a high cost of living and must navigate the pandemic’s potentially devastating second wave on just the $500-a-week Canada Recovery Benefit. Making the wage subsidy more enticing, Mr. Oliver said, “would have been the humane, moral thing to do.”

The Canadian Chamber of Commerce has called for sector-specific supports for months, and praised the wage-subsidy boost and HASCAP. But the chamber’s director of parliamentary affairs and small-business policy, Alla Drigola, said the rent-relief program still underserves restaurant chains because of caps on the total funding it can provide – and that airlines still need direct support. “The airlines are still really hurting,” she said.

The government said it continues to negotiate aid for airlines. But it proposed more than $1-billion in new funding for the broader air-travel sector, divided into five envelopes. That includes $206-million in support through regional development agencies, and $186-million over two years for health and safety infrastructure for small and regional airports through its Airports Capital Assistance Program.

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Half a billion dollars will be available for larger airports over the next six years for safety and security initiatives and infrastructure projects, such as the forthcoming light-rail station at the Montréal-Trudeau International Airport. Ottawa will also offer an additional $229-million in rent relief to 21 airport authorities that pay rent to the government, with “comparable treatment” for the operator of the Billy Bishop Toronto City Airport. An additional $65-million will be available for airports “to manage the financial implications of reduced air travel.”

Daniel-Robert Gooch, president of the Canadian Airports Council, said the $186-million for smaller airports was in line with what the group had requested.

“What is in here is a good step, but we need to understand more about some of the commitments and how this fits into the federal government’s plans for our air sector,” Mr. Gooch said. “The crisis is going to negatively impact our sector far beyond 2021.”

James Bogusz, chief executive officer of Regina Airport Authority, said he hopes to tap some of the federal money to resurface the airport’s main runway, a project worth up to $30-million. “I’m really happy to see that our sector has been singled out for needing support,” he said.

But John McKenna, president and CEO of the Air Transport Association of Canada, which represents small carriers, said the update was short on details. “It’s nice to say they support regional air transportation, including regional air carriers. But then they don’t do anything about it.” He added that $200-million is not significant considering the size of the country, the number of routes that are suffering, and the companies still offering limited service.

And Mike McNaney, head of National Airlines Council of Canada, which represents Air Canada, WestJet and Air Transat, said the government did not address the crisis in his industry, which has laid off thousands of people and halted 85-per-cent of its services. He noted other countries have provided $173-billion for their carriers, and he called on Canada to recognize the importance of air travel in the economic recovery.

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Monday’s economic update also includes an additional $250-million from the innovation department’s Strategic Innovation Fund for companies with a focus on research and development as Ottawa looks to grow the economy after the pandemic.

The Canadian Heritage Department and the Canada Council for the Arts will also receive $181.5-million for pandemic-safe events and arts programming and jobs, while the federal government promised to “work with industry to prevent the closure of unique and irreplaceable flagship events and festivals.” Local television and radio stations will receive an additional $50-million in licence-fee relief.

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