Week ending March 20, 2020
Below we have identified the most
relevant measures included in Canada’s COVID-19 Economic Response Plan.
For a full list of measures, please visit Finance Canada’s website.
Removed the waiting period for Employment Insurance (EI) for those affected by COVID-19 and temporarily extended to the maximum duration of Work-Sharing agreements through EI from 38 weeks to 76 weeks to avoid layoffs.
$27B dollars in direct support to works and businesses, mainly focused on leveraging existing programs, and another $55B in tax deferrals (for a total package of $82B in support (33% of GDP).
- Temporary wage subsidy for small employers who are facing revenue losses and to help prevent lay-offs. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
- 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.
- The 2019 tax return filing due date for businesses and individuals will be deferred until June 1, 2020. The CRA will also allow taxpayers to defer anything owing until August 31, 2020. The CRA will also not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks.
- Emergency Care Benefit to provide up to $900 biweekly to those who are quarantined or sick and not eligible for EI benefits, for up to 15 weeks.
- Emergency Support Benefit ($5.0B) to those who lose their jobs or face reduced hours as a result of COVID-19’s impact.
- Note that many of the measures above require that Parliament reconvene to pass appropriate legislation or regulation. We are monitoring timing and will provide more details on coming into force, and how to access these benefits as soon as they are available.
- Canadian banks announced that they will allow Canadians to defer their mortgages for up to six months and may provide the opportunity for relief on other credit products for both businesses and individuals.
- OSFI has eased buffer requirements for federally-regulated banks, allowing them to have more capital available to facilitate lending.
- CMHC has initiated a revised Insured Mortgages Purchase Program, which allows the government to purchase up to $50 billion of insured mortgage pools through CMHC, providing more funding to banks and lenders so they can continue lending to consumers and businesses.
- The Bank of Canada has made two emergency interest rate cuts, with the benchmark interest rate now standing at 0.75%, and has implemented new measures to ensure the financial system has sufficient liquidity so that credit continues to be available to businesses and households.
The governments of Quebec, Prince Edward Island (PEI), British Columbia and Alberta declared public health emergencies on March 13th, 16th and the latter two on the 17th, granting them varying powers under their respective public health acts.
The governments of Ontario and Saskatchewan have declared state of emergencies over the coronavirus on March 17th and 18th respectively, both provinces restricting gatherings of more than 50 people and Ontario closing a range of business and services.
In many cases, residential and commercial construction operations are able to continue operating to some degree with enhanced health, safety and distancing measures, balancing the need to maintain key economic activity while supporting worker and public health. Check your provincial and local government websites for more information.