Prime Minister Justin Trudeau announced on Wednesday a new set of economic measures to help stabilize the economy during this challenging period

The Government of Canada is taking immediate, significant and decisive action to help Canadians facing hardship as a result of the COVID-19 outbreak.

Prime Minister Justin Trudeau announced on Wednesday a new set of economic measures to help stabilize the economy during this challenging period. These measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses. It’s part of an $82 billion package that includes $55 million in tax deferrals.

Details of the initiative can be found here.

For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is:

  • 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 benefits.
    • 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.

For Canadians who lose their jobs or face reduced hours as a result of COVID’s impact, the Government is:

  • Introducing an Emergency Support Benefit delivered through the CRA to provide up to $5.0 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 hour 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.

“To support businesses that are 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 ent 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,” it said.

Brian DePratto, Senior Economist with TD Economicssaid the federal government announcement is another move in the right direction.

“It may be tempting to think about today’s announcements as stimulus, but the more apt metaphor may be building a bridge. The Canadian economy is facing the possibility of falling into a sharp valley as spending dries up in the wake of necessary COVID-19 behavioural response measures, such as the closing of the Canada-U.S. border to non-essential travel announced earlier this morning. What today’s and other announced/forthcoming measures should do is help provide a stopgap for businesses and households until the return to a more normal environment,” he said.

“What building a bridge means in practice is quickly mitigating the near-term impacts of economic standstills in key industries on employees and their families. Today’s announcements will help those who are unable to work, and goes a long way in meeting our concerns around those who do not qualify for EI. On the speed front, while a two week wait is a long time in the midst of a health crisis, given the challenges of putting new measures into existing systems, this is probably about as quick as can be reasonably expected.”

Dan Kelly, President of the Canadian Federation of Independent Business, said the CFIB appreciates the federal government’s quick work to respond to the health emergency created by COVID-19.

“We also recognize their work in announcing a second package of measures to help address the related economic emergency facing Canadian employers and workers. The measures to expand access to Employment Insurance for those who are sick, in quarantine or laid off will be of help and CFIB commends the government for providing special access to the self-employed, including business owners,” he said.

“But the focus of business and worker support measures should be to avoid layoffs from companies that are dealing with a deep and immediate drop in sales as a result of the economic effects of self-isolation. As of last weekend, 50 per cent of small firms reported they’ve already experienced a drop in sales. The number is likely to be much higher today.  One in four businesses reports they will not be able to survive a significant drop in income for more than one month.

“CFIB is pleased the federal government has announced a wage subsidy for small businesses of 10 per cent of wages over the next 90 days, up to $1,375 per employee or $25,000 per employer. Unfortunately, while the measure is a good one, the level of the subsidy needs to be far higher in order to help – closer to the 75-90 per cent levels announced in many European countries. CFIB will be immediately advocating for additional wage support for workers in Canadian small businesses. Measures to keep Canadians working and connected to their employer will be what helps the economy recover from the COVID-19 emergency as quickly as possible.”

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