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The Canadian Chamber of Commerce is warning there could be a wave of bankruptcies among heavily indebted companies in the tourism, travel and hospitality sectors after government support programs wind down in the coming months.

Even with vaccination rates increasing and lockdown restrictions easing over the summer, many companies in high-contact industries will struggle with reduced cash flow and high debt levels well into 2022, the business group said Thursday in a document aimed at providing advice to policy-makers.

The chamber is calling for an extension to the federal government’s Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) until next spring for companies in hard-hit industries.

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As it stands, both the CEWS and CERS programs are scheduled to wind down incrementally over the summer and wrap up at the end of September. The Canada Recovery Hiring Program – aimed at helping private companies bring back workers or increase their hours and pay – starts this month and will run until the end of November.

“We want to ensure that all of the investments the government has made in keeping businesses alive through the pandemic continue to be there at the very tail end for those businesses that are going to be the last to recover and reopen,” said Alla Drigola, the chamber’s director of parliamentary affairs and policy for small and medium-sized enterprises.

According to Statistics Canada’s most recent business conditions survey, published in early May, nearly a quarter of respondents in the accommodation, food and entertainment sectors said they could operate for less than 12 months at current revenue and expenditure levels before having to consider shutting down or declaring bankruptcy.

“It’s really important that governments begin to retool these support programs so that they focus on the hardest-hit sectors while starting to wind down for sectors that are in recovery,” Ms. Drigola said.

Along with extending support programs, the chamber recommended the government forgive interest payments on government-backed emergency loans. Other lobby groups, such as the Canadian Federation of Independent Business and Restaurants Canada, have called for similar extensions to the government support programs and partial loan forgiveness.

The government should make rapid testing kits available to consumer-facing businesses free of charge and enhance its COVID-19 contact tracing app, the chamber said.

Mark Agnew, the chamber’s vice-president of policy said that governments also need to lay out clear guidelines for what companies can ask of employees and customers about vaccinations.

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“We have a concern that a lot of our members are going to be inadvertently walking themselves into legal landmines, left, right and centre, if they start asking either patrons or their employees about vaccination status,” Mr. Agnew said.

“It is absolutely critical for governments to get out in front of this and provide very clear guidance to companies on what they can and cannot do,” he said.

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