Trudeau’s Finance Minister Praises Germany’s Short-Work Program

(Bloomberg) -- Finance Minister Chrystia Freeland said she is interested in a widely praised German work-sharing program as a second wave of Covid-19 threatens the Canadian economy.

Under the state-funded plan, employee hours are reduced for as long as a year to help employers weather financial hardship. The government then supplements income lost due to cuts with a 60% income replacement benefit. Germany used the program, known as Kurzarbeit, during the 2008 recession to keep citizens employed.

“The German Kurzarbeit program is something that Canada should be paying a lot of attention to and something I’ve been looking at quite a bit,” Freeland said Thursday in testimony before the Senate finance committee.

Her comments come as politicians across Canada weigh closing businesses to slow the spread of the coronavirus or loosening restrictions on commerce to support the economic recovery. Prime Minister Justin Trudeau warned provincial premiers and mayors Wednesday to err on the side of protecting public health.

Freeland also said she is “a big fan” of the Trudeau government’s existing wage subsidy program, which is helping maintain links between workers and employers. Some 3.8 million people have benefited from the program, which is set to cover as much as 65% of wages for the hardest hit businesses until the end of June 2021.

“It’s far better for individual Canadians and for the economy if people can keep their jobs and keep that connection to work,” Freeland said.

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