The government announced major economic initiatives today in order to mitigate the business impact of the COVID-19 pandemic:
- A wage subsidy for employers covering 75% of wages, up from a previously announced 10%. This program will be backdated to March 15th. This only applies to small and medium sized enterprises (SMEs).
- While more details will be available on Monday, the previously used definition of SME within the Government of Canada is a business with fewer than 500 employees. There will be additional criteria announced next week.
- The idea of this policy is to maintain the connection between employers and employees throughout the crisis. The theory is that the economy will bounce back faster if a trained workforce remains in place when businesses start to reopen.
- Creation of the Canada Emergency Business Account, which will allow banks to provide a government-guaranteed loan of up to $40,000 to qualifying businesses. These loans will be interest-free for the first year, and those businesses who repay their loans by December 31, 2022 will see 25% of the loan, or up to $10,000 waived.
- An additional $12.5B has been provided to Export Development Canada and Business Development Canada to help small and medium sized businesses with cash flow to meet their operational needs.
- GST/HST payments for business have been deferred to June, as have any import taxes or duties.
- Finance Minister Bill Morneau said that targeted measures for the airline and energy sectors will be announced soon.
The details regarding who will qualify, how applications will be made, and when payments will be received have yet to be announced. The Prime Minister said that the government hopes to have these details by Monday. Here are links to the government’s announcement and Finance Backgrounder.
In other updates related to COVID-19:
- The Canada Emergency Response Benefit announced on Wednesday will be available on April 6 via the Canada Revenue Agency’s MyAccount web portal, My Service Canada Account, and an automated phone line. Canadians are being encouraged to update their direct deposit information with CRA in advance. Canadians will be eligible to apply for the CERB if they have not received any income for 14 consecutive days, if they are a resident of Canada who is at least 15 years old, and if they have earned at least $5,000 for 2019 or in the 12-month period before applying for the CERB. This $5,000 can be employment income, income through self-employment, or maternity/parental leave benefits through EI.
- The federal government has been engaging with Canada’s banks on providing credit relief to Canadians. This could include credit card relief or lines of credit, in addition to mortgage payment deferrals.
- The Conservative Party leadership campaign has been postponed, and leadership fundraising has ceased until May 1, 2020. The membership deadline has also been extended to May 15, 2020.
- The Trump administration has reportedly backed off of its proposal to deploy military personnel along the Canada-US border. Canada strongly opposed this measure as unnecessary and to ensure that goods continue to flow freely across the border.
- The federal Quarantine Act has been invoked, allowing for possible fines (and even imprisonment) for those found to be violating a mandatory 14-day isolation period upon returning from travel outside of Canada. Public health officials will start randomly visiting the homes of people under mandatory quarantine to verify compliance.
- Governments across Canada are focussed on ensuring our health care system has an adequate supply of personal protective equipment (PPE), testing materials, and ventilators to meet the expected surge in COVID-19 patients. The Public Health Agency of Canada is receiving shipments in the coming days and Canadian companies are donating existing supplies, re-tooling to produce these products and ramping up production. Federal stockpiles are meeting provincial needs up to this point. Following the expected surge in COVID-19 patients, PPE will be needed across the economy for workers in essential services who come into contact with the public.
- The Prime Minister spoke with G20 leaders yesterday, recognizing that this global crisis requires a global economic and health response. He spoke to the need to “flatten the global curve” of COVID-19 with support to vulnerable countries via the UN, WHO and World Bank, and specified the challenges that African countries will face if we wish to minimize future resurgences of COVID-19.
We know that this is a lot of information. If you have questions, please reach out directly to a member of our federal team:
Sheamus Murphy – smurphy@counselpa.com (613) 323 7607
Bridget Howe – bhowe@counselpa.com (613) 797 8058
Ben Parsons – bparsons@counselpa.com (613) 323 5526