Quebec has unveiled a $2.5-billion emergency aid program for businesses whose income has been crushed by the new coronavirus pandemic in a bid to stave off a wider economic collapse.
“There’s no denying that there are many companies that are suffering,” Premier François Legault told reporters in Quebec City on Thursday. “There are sectors where it is downright catastrophic. I’m thinking about airlines and hotels and lots of service companies that are seeing drastic drops in revenue.”
The province said it would offer a minimum of $50,000 per eligible business in need of liquidity. The aid will come in the form of loans or loan guarantees, according to a news release.
This is a temporary crisis that will nevertheless take a certain number of months to resolve, Mr. Legault said. The government’s role, in tandem with banks and other institutions, is to provide Quebec-based businesses a financial bridge to recovery, he said.
“A part of our economy has literally stopped,” Quebec Economy Minister Pierre Fitzgibbon said. “There are possibly some businesses that we won’t be able to save but with loans that have advantageous conditions, I think we will be able to save many.”
Caisse de dépôt et placement du Québec’s Ivanhoé Cambridge real estate unit is set to announce that it will work with retailers in its malls on a six-month moratorium on rent, Mr. Fitzgibbon told the news conference. He said that’s the type of help he expects from lenders and other creditors in the province.
Retail businesses in outlying regions are being particularly hard-hit in Quebec, Mr. Fitzgibbon said. He said the government would weigh offering more aid if necessary.
Mr. Fitzgibbon urged Quebeckers to buy locally and support their neighbourhood businesses.
Quebec’s pledge for more financial support to prop up its economy was made after the Canadian government on Wednesday unveiled a sweeping aid stimulus package for business and workers. The federal measures, which the government says could be followed by additional support, amount to $27-billion in emergency aid for workers and businesses and $55-billion in tax deferrals.
Ottawa’s intent is to help companies with their cash flow and keep workers on the payroll, even if they have been sent home, while bolstering federal benefits and support programs for people who have lost their jobs.
But business groups say the measures fall short and will not stave off the significant job losses already taking place.
The Canadian government will pay 10 per cent of wages for small businesses over the next three months, up to a maximum of $1,375 per employee and a cap of $25,000 per business. Larger businesses are excluded.
The assistance falls far short of steps being taken by countries such as Denmark, which is providing subsidies of 75 per cent of wages, and New Zealand, which rolled out a maximum subsidy per employee four times higher than Canada’s.
Bill Morneau, the federal Finance Minister, said Thursday the government will do whatever it takes to blunt the harm caused by the pandemic. He signalled that more aid is probably coming.
“We’re trying to address all these things at the same time, knowing that as more information emerges we will be taking additional measures,” Mr. Morneau told BNN Bloomberg television, adding he is aware that airline and oil companies are facing cash flow issues. “We will be refining what we’ve done, we will be thinking about next steps.”