Canadian government pledges $82 billion to help businesses and residents cope with COVID-19 disruption

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On March 18, Prime Minister Justin Trudeau announced that the government was, in cooperation with the United States, closing the border to non-essential travel. He also announced that the government is providing Canadians with $82 billion in total to help offset financial losses associated with the COVID-19 outbreak. 

At the press conference, Trudeau told reporters that he recently spoke to US President Donald Trump and that Canada and the U.S. will temporarily restrict all non-essential travel over the border. 

He emphasized that goods will still cross the border as usual.

"We must preserve the supply chain between both countries so food, fuel and life-saving medicines reach people on both sides," he said, adding that trucking will not be affected. 

The focus of the announcement, however, was the multi-billion dollar package the government is introducing to help businesses and residents stay afloat during a crisis that has forced the indefinite closure of multiple companies. 

"COVID-19 is forcing us all to change our ways. If you work in a restaurant, drive a cab, work in tourism, or in the oil and gas industry, you're wondering how long this will last and how long your savings will last," Trudeau said. 

"You should be focused on your health and the health of your neighbours."

Trudeau said the government is taking "extraordinary measures" and is offering $27 billion in direct support to Canadian workers and businesses and $55 billion to meet liquidity needs.

In total, the federal government is promising $82 billion in support—more than 3 per cent of Canada's GDP.

Here's how the support will work:


Temporary Income Support for Workers and Parents

For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the government is:

  • Waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure is in effect as of March 15, 2020.
  • Waiving the requirement to provide a medical certificate to access EI sickness benefits.
  • Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks. 

The government says this flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to:

  • Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
  • Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not qualify for EI sickness benefits.
  • Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.

Application for the Benefit will be available in April 2020, and require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility. 


Longer-Term Income Support for Workers

For Canadians who lose their jobs or face reduced hours as a result of COVID's impact, the government is:

  • Introducing an Emergency Support Benefit delivered through the CRA to provide up to $5 billion in support to workers who are not eligible for EI and who are facing unemployment.
  • Implementing the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process. 

Income Support for Lower-Income Residents

For over 12 million low- and modest-income families, who may require additional help with their finances, the government is proposing to provide a one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC). This will double the maximum annual GSTC payment amounts for the 2019-20 benefit year. The average boost to income for those benefitting from this measure will be close to $400 for single individuals and close to $600 for couples. 

The government says this measure will inject $5.5 billion into the economy.

For over 3.5 million families with children, who may also require additional support, the Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child. 

The overall increase for families receiving CCB will be approximately $550 on average; these families will receive an extra $300 per child as part of their May payment. In total, this measure will deliver almost $2 billion in extra support.

Together, the proposed enhancements of the GSTC and CCB will give a single parent with two children and low to modest income nearly $1,500 in additional short-term support.

To ensure that certain groups who may be vulnerable to the impacts of COVID-19 have the support they need, the government is proposing targeted help by:

Providing $305 million for a new distinctions-based Indigenous Community Support Fund to address immediate needs in First Nations, Inuit, and Metis Nation communities.

Placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.

Reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors' retirement savings. 

Providing the Reaching Home initiative with $157.5 million to continue to support people experiencing homelessness during the COVID-19 outbreak. The funding could be used for a range of needs such as purchasing beds and physical barriers for social distancing and securing accommodation to reduce overcrowding in shelters.

Supporting women and children fleeing violence, by providing up to $50 million to women's shelters and sexual assault centres to help with their capacity to manage or prevent an outbreak in their facilities. This includes funding for facilities in Indigenous communities.


Flexibility for Taxpayers

The Canada Revenue Agency will defer the filing due date for the 2019 tax returns of individuals, including certain trusts. 

For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020.  However, the Agency encourages individuals who expect to receive benefits under the GSTC or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.

For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.

The Canada Revenue Agency will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. 

The government also said that banks are willing to work with individual clients to address financial hardships brought on by the virus. 


Helping Businesses Keep their Workers

To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers with a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of the remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. 


"You will get the support you need during this time.  In Canada, public health should never hinge on financial considerations," Trudeau said.  

"Our work is to help you when it's needed most. That's what we're doing with the measures we've announced so far."

To learn more about the economic package, click here.

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