All levels of government in Canada are taking action to help affected Canadian workers and businesses weather the economic fallout from the COVID-19 crisis. “COVID-19 is an extraordinary challenge which requires an extraordinary response,” said Finance Minister Bill Morneau during a news conference Wednesday, before discussing the government’s unprecedented stimulus package.
The $82-billion federal aid package includes $27 billion in direct supports and another $55 billion to help business liquidity through tax deferrals. Morneau characterized the package as the first phase of investment and said, “When the time is right, we will announce more long-term investments to assist with recovery and help Canadians get back to their daily lives.”
Here is a run-down of the programs and initiatives that will help Canadians pay for rent and groceries, help businesses continue to meet payroll and pay bills, as well as stabilize the economy.
A new emergency care benefit offers up to $900 biweekly for up to 15 weeks, providing income support to workers, including the self-employed, who have to stay home and don’t qualify for paid sick leave or employment insurance. The measure could disburse some $10 billion to Canadians. Applications will be available in April, through the CRA website.
The emergency support benefit will provide up to $5 billion in support to workers who are not eligible for EI and who are facing unemployment. This is for Canadians who lose their jobs or face reduced hours as a result of COVID’s impact. People can apply in April, through the CRA website.
Following the federal government’s stimulus announcement, the Ontario government passed the Employment Standards Amendment Act (Infectious Disease Emergencies). In an interview with the London Free Press, Labour Minister Monte McNaughton explained that this legislation “provides job-protected leave to employees in isolation/quarantine due to COVID-19 … so (people) in isolation or treatment in accordance with public health direction, or because the employer directs the worker not to work due to a concern COVID-19 could be spread in a workplace, and finally because a worker needs to care for a loved one.”
Work-Sharing is an adjustment program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. The Government of Canada will enhance this program at an estimated cost of $12 million to help employers who are experiencing a downturn in business due to COVID-19, and their workers.
The federal government has granted greater flexibility for taxpayers. The tax filing deadline for individuals has been extended to June 1; taxpayers can defer payment of any income tax amounts until after August 31, 2020. Plus, the Canada Revenue Agency will not contact any small or medium businesses to initiate any post assessment GST/HST or income tax audits for the next four weeks. And to help owners of small businesses understand their tax obligations, a Liaison Officer service, which is accessible over the phone, has been set up.
On the municipal front, the City of Toronto announced a 60-day grace period for residents to pay tax, water and solid waste bills. A 30-day grace period for businesses on tax and utility bill payments introduced earlier this week is being extended to a 60-grace period as well. The grace period applies to bills as of March 16. “Toronto businesses and residents need to know that we understand these are extraordinary circumstances and we are here to support them,” Mayor John Tory said in a statement.
A wage subsidy provides eligible small businesses a 10 per cent subsidy for the next 90 days, up to a maximum of $1,375 per employee and $25,000 per employer. Employers benefiting from this measure would include corporations eligible for the small business deduction, as well as not-for-profit organizations and charities. This will help employers keep people on their payroll and help Canadians keep their jobs.
The Bank of Canada has slashed interest rates and unveiled tools to support the financial system, Canada’s banking regulator has eased the industry’s “stability buffer” to boost lending capacity, and $10-billion in credit was set aside for small and medium-sized businesses facing a cash crunch.
The government is increasing the amount of credit available to small, medium and large Canadian businesses. As announced on March 13, a new Business Credit Availability Program will provide more than $10 billion of additional support to businesses experiencing cash flow challenges through the Business Development Bank of Canada and Export Development Canada. The Government is ready to provide more capital through these financial Crown corporations. The current details from BDC on new relief measures include, working capital loans of up to $2 million with flexible terms and payment postponements for up to six months for qualifying businesses and reduced rates on new eligible loans. And for Canadian companies with international trade, the EDC programs can help with risk management, financing and working capital.
For more information and links, please see this page set up by the Government of Canada.