OTTAWA – Yesterday, Prime Minister Justin Trudeau announced a new set of economic measures to help stabilize the economy. These measures, delivered as part of the Government of Canada’s $82-billion COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses.
“As you cope with the COVID-19 situation, we’re focused on helping you get through this,” Trudeau said during the announcement.
The plan includes temporary income support for workers and parents without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children. The government will be:
• 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. 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 quality for EI sickness benefit; and 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 they meet the eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility.
There will also be longer-term income support for workers who lose their jobs or face reduced hours as a result of COVID’s impact. Including:
• 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 hours 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. (This was announced by the Prime Minister on March 11, 2020.)
The Canada Revenue Agency will also be deferring the tax-filing due date for the 2019 tax returns of individuals, including certain trusts.
Support for Businesses
To support businesses facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10 per cent of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
In addition, the Canada Revenue Agency will allow all businesses to defer the payment of any income tax amounts that become owing on or after today and before September 2020 until after August 31, 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
The Business Credit Availability Program (BCAP) will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10-billion of additional support, largely targeted to small and medium-sized businesses. BDC and EDC are cooperating with private-sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as tourism, oil and gas and air transportation.
The Bank of Canada also took a series of actions to support the Canadian economy during this period of economic stress, enhance the resilience of the Canadian financial system, and help ensure that financial institutions can continue to extend credit to both households and businesses. This included cutting the interest rate to 0.75 per cent as a proactive measure in light of the negative shocks to Canada’s economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices.
“The measures [the Prime Minister] announced today are important steps to help keep our economy and people strong,” Ontario Premier Doug Ford said in a press conference yesterday afternoon. “As we move ahead with our plan to provide relief to families, workers and businesses we look forward to receiving this support. We will continue to seek opportunities to collaborate.”
View a complete outline of the COVID-19 Economic Response Plan here