Canadian Securities Exchange Statement on Important Proposed Amendment to the Government of Canada’s Economic Response Plan to Support Canadian Businesses
March 23, 2020 – Toronto, ON – The Canadian Securities Exchange (“CSE” or “the Exchange”) today issued the following statement on the Government of Canada’s COVID-19 Economic Response Plan:
“The COVID-19 outbreak is causing massive economic disruption across the country. The Canadian Securities Exchange applauds the federal government for recognizing the magnitude of the crisis and announcing a major economic response plan to support individuals and small businesses. However, the Exchange is concerned that the government’s plan does not treat all small businesses equally, and that CSE-listed companies and their affected employees will not be able to access the relief measures.
Specifically, the CSE is concerned about the proposal to provide small employers with a temporary wage subsidy for a period of up to three months. The subsidy enables these businesses to reduce their payroll tax remittances, helping them to keep their workers employed during this difficult period.
This is an important and welcome measure. Unfortunately, the federal government said that it is only available for corporations eligible for the small business deduction, non-profit organizations and charities. To be eligible for the small business deduction, Canadian corporations need to be privately controlled. Publicly-traded companies, including those listed on the CSE, are ineligible as the proposal is currently drafted.
This is inherently unfair, and creates a substantial and unnecessary risk to the Canadian economy. The CSE is home to 538 publicly traded companies, other Canadian stock exchanges are host to many hundreds more. Smaller publicly-traded firms are facing the same economic disruption as their privately-held counterparts, and the risk of job losses is equally high in both groups. It is illogical to provide relief to one set of small businesses and not the other.
The CSE recognizes that the situation is evolving rapidly and the federal government is moving very quickly to support Canadian businesses, so the inadvertent omission of listed companies from this legislation is understandable. However, it is crucial that the government amend the proposed legislation to ensure that all small businesses can benefit equally from its economic response plan. That is the best way to protect jobs during an unprecedented economic and public health crisis.”
Richard Carleton, CEO