COVID-19 Update: Federal government announces $82 billion support package
Today, Prime Minister Justin Trudeau announced a $82-billion aid package to help Canadians and businesses cope with the global COVID-19 pandemic, including income support, wage subsidies, and tax deferrals.
The package includes $27 billion in direct support and another $55 billion to help business liquidity through tax deferrals.
This $82-billion aid package is in addition to a $1 billion COVID-19 response package and supports for business already announced by government. On March 13, the federal government also announced the establishment of a $10 billion credit fund to lend money to businesses to help them continue operations.
It will take some time for the new economic measures to be implemented. During this morning’s press conference, however, the Prime Minister said that Parliament could be recalled as early as next week to pass legislation bringing in the fiscal measures. Financial support should start flowing in weeks.
The stimulus package joins various provincial-led efforts across the country. Notably, it is a major shift in Canada’s social support architecture – providing more direct funding to Canadians and bypassing traditional jurisdictional channels and areas of responsibility.
Economic Stimulus Measures Announced
The economic response plan announced today can largely be broken down into four categories:
Support for business
Support for workers
Supportive tax measures
Support for vulnerable groups
We have provided a high-level overview of categories 1-3 below. You can find all measures announced today here.
Support for business
All businesses are allowed to defer, until after August 31, 2020, the payment of any income tax amounts owed between March 18 and before September. This applies to balances and instalments due. No interest or penalties will accumulate.
Increase 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.
Further expand Export Development Canada’s ability to provide support to domestic businesses.
Provide flexibility on the Canada Account limit, to allow the Government to provide additional support to Canadian businesses, when deemed to be in the national interest, to deal with exceptional circumstances.
Launch an Insured Mortgage Purchase Program to purchase up to $50 billion of insured mortgage pools through the Canada Mortgage and Housing Corporation. As announced on March 16, this will provide stable funding to banks and mortgage lenders and support continued lending to Canadian businesses and consumers.
The six largest financial institutions in Canada have also made a commitment to work with personal and small business banking customers on a case-by-case basis. This support will include up to a 6-month payment deferral for mortgages and the opportunity for relief on other credit products.
Full measures can be found here.
Support for workers
Emergency Care Benefit: up to $900 biweekly, up to 15 weeks, income support for workers, including the self-employed, who have to stay home and don’t qualify for paid sick leave or employment insurance.
Emergency Support Benefit: up to $5 billion in support to workers who are not eligible for EI and who are facing unemployment.
EI waiting period waived: the mandatory one-week waiting period for EI sickness benefits has been waived for workers in imposed quarantine or who have been directed to self-isolate.
No medical certificate is required to access EI sickness benefits
10% wage subsidy: provide eligible small businesses a 10 percent wage subsidy for the next 90 days, up to a maximum of $1,375 per employee and $25,000 per employer. Eligible businesses include corporations eligible for the small business deduction, non-profit organizations, and charities.
Full measures can be found here.
Supportive tax measures
Extend tax filing deadline to June 1 and allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that became owing on or after March 18 and before September 2020.
Full measures can be found here.
Helpful links for businesses
Supporting Canadian businesses through the Canada Account
Helping businesses keep their workers
Flexibility for businesses filing taxes
Ensuring businesses have access to credit
Supporting financial market liquidity
Other important updates from today
The Government of BC has declared a provincial state of emergency. This allows the province to implement any provincial emergency measures required with access to land and human resource assets that may be necessary to prevent, respond to or alleviate the effects of an emergency. This includes securing the critical supply chains to make sure people have access to essential goods and services, and that infrastructure necessary in a response is readily available.
Today, Canada and the United States reached an unprecedented deal to close their border to non-essential travel:
Border is closed for recreational purposes. No tourists or shoppers will be able to cross the border.
Canadians are allowed to still enter the country.
Essential travel is kept open. Example: travel that is critical to supply chains (food, fuel, and life-saving medicines). Trucking will not be affected.
The federal government is also considering invoking the Emergencies Act, which would grant extraordinary powers to restrict movement and regulate and distribute critical supplies during the pandemic. Invoking the act could restrict travel within Canada.
The BC Government is ordering all liquor primaries in the province to close: read press release.