Less than 1% of Manitoba's minimum wage subsidy paid to small businesses, the rest unclaimed

Asubsidy designed to help some Manitoba businesseslift their salaries to reach thehigher minimum wage has hardly been utilized.

Of the $6 millionbudgeted for the six-month program that started last October,the province has only doled out$20,400 of the funds or 0.3 per centto a total of 108 businesses, the government said. The program is still running until the end of March, however.

Business owners and supporters say the application process for the subsidy program is too onerous for the amount small businesses would be receiving.

The small uptake "tells you theprogram didn't work," Manitoba Chambers of Commerce presidentChuck Davidson said.

"The results that we'regoing to get, or the dollars that we would potentially get back, it doesn't add up to the amount of time that's being put into it."

The subsidy provides up to 50 cents per hour per worker, to a maximum of 20 employees, butfor only those staffwho got a pay bumplast October as a result ofthe new minimum wage, which was raised from $11.95 to $13.50.

Hours of paperwork

The financial support, which is prorated based upon an employee's hourly rate last September,is appreciated, Davidson said, but he arguesgetting themoney is too complicated.

It can take hours for businesses to handle the paperwork the province requires after everpay period cycle, Davidson said.

At most, a business receives around $480 for a single minimum wage earner over the six-month program, and that's assuming the employee holds full-time hours. Most employees working 40 hours a week are makingmore than the minimum wage, Davidson said.

"As much as [a business owner] would like to be able to receive those dollars, it's not significant enough for me to spend that time doing it," hesaid.

Thomas Schneider, who owns Tommy's Pizzeria in Winnipeg,has yet toapplyfor the subsidy. He crunched the numbers and realized he would have receivedjust $2.50 on his last payroll.

Filing the paperwork wasn't worth it for him, or anyone else.

"Theaccountant and bookkeeper would charge a lot more than the $2.50 that I would have got,"Schneider said.

His subsidy islow because onlya few of his employees were at the low end of the pay scale last fall, and they don't work many hours. He said these employees advance throughthe pay ranks quickly.

Schneideracknowledges that applying for the subsidy may make financial sense for businesses with more minimum wage earners, but $2.50 every two weeks doesn't address the rising costs stemming from increasing thewages of hisother employees, or the pressures of inflation and surgingfood costs.

"Rightnow, we operate at a loss, mainly because of my food costs," said Schneider,whojust remortgaged his home for the second time in two years to keep his business going.

"I'm too scared to raise my prices any more because it will scare away my customers."

Davidson wants the Progressive Conservative government to revive thebridge grant program it ran duringthe pandemic, which offered one-time grants.

The Canadian Federation of Independent Business helped lobby theprovince to expand the number of businesses that are eligible for the subsidy, raising the cap lastDecember from businesses with 20 employees to businesses with 100 employees.

Brianna Solberg, CFIB's director of legislative affairs for the Prairies and northern Canada, said theyrealizedmany of the businesses most needing the support, like those in the hospitality sector,employed more than20 people.

She hopes the change will result in more businesses signing up.

The subsidy isa "safety net for some businesses," Solberg said, "but it'simportant to notethat when minimum wage increases, employers who are already paying more than minimum wage feel urged to even give a pay bump to those employees who are earning more."

Those businesses aren't eligible for any subsidy, she said.

James Chambers, co-owner of ChezAngela Bakery in Brandon, would likea sliding scale where businesses paying their employees closer to a living wage, like his, getsome financial support, even if it's less than businesses offering lower pay.

"We were paying above the living wage. Nowanational-level chain that has never paideven within 30 per centof that living wage, they're getting subsidized.

"It's almost like we're being punished" for voluntarily raisingwages without the government's help, he said.

Economic Development Minister Cliff Cullen saidthe number of businesses eligible for the subsidy has expanded in response totheir consultations.

"We want to make sure that the greatest number of Manitoba small businesses can apply and benefit from the program," he said in a statement on Tuesday.

"Alongside the change in criteria, we are also working on adding additional social media messaging and advertising to help highlight the benefits of the subsidy to encourage further applications."

His government is in the midst of a tax competitiveness reviewthat could help small businesses by decreasingtheir tax burden. The findings are expected to be released in the spring.

Onerous process fails small business: NDP

Jamie Moses, the NDP's economic development critic, called on the government to rejig the program so the time and effort spent on applying is properly rewarded.

"This PCgovernment that claims to be friendly with small businesses, they sure know how to design a program that fails them," he said.

If elected, an NDP government would "certainly start by listening, talking to small businesses and finding out exactly how we can support them through the half times of rising costs."

Manitoba's minimum wage will rise to $14.15 on April1.

Winnipeg business owners say applying for subsidy too complicated

2 years ago

Duration 2:18

A subsidy designed to help some Manitoba businesses lift their salaries to reach the higher minimum wage has hardly been utilized. Some small business owners say Manitoba's wage subsidy program is too much work, for too little reward.