Less than 1% of Manitoba's minimum wage subsidy paid to small businesses, the rest unclaimed
Small uptake 'shows the program didn't work,' says Manitoba Chambers, recommending grants instead
A subsidy designed to help some Manitoba businesses lift their salaries to reach the higher minimum wage has hardly been utilized.
Of the $6 million budgeted for the six-month program that started last October, the province has only doled out $20,400 of the funds — or 0.3 per cent — to 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 the program didn't work," Manitoba Chambers of Commerce president Chuck Davidson said.
"The results that we're going 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, but for only those staff who got a pay bump last October as a result of the 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 argues getting the money is too complicated.
It can take hours for businesses to handle the paperwork the province requires after ever pay 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 making more 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," he said.
Thomas Schneider, who owns Tommy's Pizzeria in Winnipeg, has yet to apply for the subsidy. He crunched the numbers and realized he would have received just $2.50 on his last payroll.
Filing the paperwork wasn't worth it for him, or anyone else.
"The accountant and bookkeeper would charge a lot more than the $2.50 that I would have got," Schneider said.
His subsidy is low because only a 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 through the pay ranks quickly.
Schneider acknowledges 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 the wages of his other employees, or the pressures of inflation and surging food costs.
"Right now, we operate at a loss, mainly because of my food costs," said Schneider, who just 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 the bridge grant program it ran during the pandemic, which offered one-time grants.
The Canadian Federation of Independent Business helped lobby the province to expand the number of businesses that are eligible for the subsidy, raising the cap last December 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 they realized many of the businesses most needing the support, like those in the hospitality sector, employed more than 20 people.
She hopes the change will result in more businesses signing up.
The subsidy is a "safety net for some businesses," Solberg said, "but it's important to note that 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 Chez Angela Bakery in Brandon, would like a sliding scale where businesses paying their employees closer to a living wage, like his, get some financial support, even if it's less than businesses offering lower pay.
"We were paying above the living wage. Now a national-level chain that has never paid even within 30 per cent of that living wage, they're getting subsidized.
"It's almost like we're being punished" for voluntarily raising wages without the government's help, he said.
Economic Development Minister Cliff Cullen said the number of businesses eligible for the subsidy has expanded in response to their 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 review that could help small businesses by decreasing their 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 PC government 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 April 1.
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