The Government of Canada is now taking significant action to help Canadians that are facing hardship as part of the COVID-19 outbreak.
On Wednesday, March 18, Prime Minister Justin Trudeau announced a new set of measures to help stabilize the economy during this uncharted, difficult period. These measures that are delivered as part of the Government of Canada’s COVID-19 Economic response plan, will provide up to $27 billion in support to Canadian workers and businesses.
For Canadians who do not have paid sick leave or other similar accommodations, who are sick, quarantined or forced to stay home, the Government will be waiving the one week waiting period for those in quarantine that claim Employment Insurance (EI) benefits. This is in effect as of last Sunday. Additionally, the Government of Canada is removing the requirement to provide a medical certificate to access EI.
There will also be the introduction of the Emergency Care Benefit, providing up to $900 bi-weekly for up to 15 weeks to those affected by quarantine. This Benefit will be administered through the Canada Revenue Agency and provide income support to workers, including self-employed, who are sick or in quarantine due to COVID-19 but do not qualify for EI sickness benefits, workers who must care for a family member who is sick with COVID-19 that do not qualify for EI sickness benefits and parents with children who require care or supervision due to the closure of schools or daycare.
You can read more about the application process for EI here.
A streamlined form to apply can be found here.
For those who lose their jobs or are facing reduced hours as a result of the impact of COVID, the Government is introducing a new Emergency Support Benefit delivered through the CRA to provide up to $5.0 billion in support to workers that do not qualify or are not eligible for EI and are facing unemployment. Additionally, the EI WOrk Sharing Program will be introduced which provides EI benefits to workers that agree to reduce their normal working hours as a result of developments beyond the control of their employers.
For those who require additional help with their finances and are one of the 12 million low to modest-income families, the Government is providing 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. For single individuals, $400 will be the average boost to income for those benefitting from this measure and $600 for couples.
And for those families with children who may require additional support, the Government is proposing an increase in the maximum annual Canada Child Benefit (CCB) payment amounts for the 2019-20 benefit year by $300 per child. On average, families benefitting from CCB will receive approximately $550 and an additional $300 per child as part of their May payment.
The Canada Mortage and Housing Corporation (CMHC) and other mortgage insurers are offering tools to lenders that can help assist homeowners who may be experiencing financial difficulties. This includes payment deferrals, loan re-amortization, capitalization of outstanding interest arrears, and special payment arrangements. Additionally, the Government, through CMHC, will be providing flexibility for homeowners facing difficulty to defer mortgage payments on CMHC-insured mortgage loans.
The Government of Canada is also taking immediate action to help support Canadian businesses facing difficulties as a result of the pandemic with a new package of measures to support the function of markets will aim to increase the availability of credit to businesses of all sizes and provide flexibility to businesses experiencing hardship.
In order to help support businesses that are facing revenue losses, and to prevent lay-offs, the Government is proposing to provide small employers with a temporary wage subsidy for three months. The subsidy will be equal to 10% of the re-remuneration paid during that period, up to $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
The CRA will also allow businesses to defer until after August 31, 2020, any payment of any income tax amounts that are owing on or after today and before September 2020. This relief will apply to tax balances due, as well as installments. No interest or penalties will accumulate during this time. The CRA will not contact any small or medium businesses to initiate any post-assessment GST/HST or Income Tax audits for the next four weeks.
Additionally, the Business Credit Availability Program will help provide more than $10 billion in additional support that is largely targetted to small and medium-sized businesses. This will help viable Canadian businesses remain resilient during these strange times. The Office of the Superintendent of Financial Institutions announced, as well, it is lowering the Domestic Stability Buffer by 1.25% effective immediately. This will allow Canada’s large banks to supply #300 billion of additional lending to the economy.
Support for entrepreneurs impacted by the coronavirus COVID-19 can be found here.
Canada’s COVID-19 Economic Response Plan can be found here.
Credit for this article goes to author Spencer Kemp – Discover Moosejaw