OTTAWA (NEWS 1130) – Prime Minister Justin Trudeau announced on Wednesday an $82 billion aid package in response to the COVID-19 pandemic.
“In these extraordinary times, our government is taking extraordinary measures,” the prime minister said outside Rideau Cottage, where he is in self-isolation because his wife has tested positive for the virus.
It’s a massive amount of money – a full three per cent of Canada’s GDP – but how much of it is going to end up in your pocket?
Finance Minister Bill Morneau said his usual job is to maintain the government’s fiscal track but he has now set that aside.
“Right now, my only job is to make sure that Canadians can keep food in the fridge, that they can keep a roof over their heads, that they can afford the medicine that they need,” he said.
This is how the federal government says it will do that in the first phase of its financial aid plan. Morneau promised more help would come in future phases of the plan, assuring Canadians the government would do “whatever it takes” to support them.
What is coming today @Bill_Morneau says is the first phase of assistance for Canadians. "We're doing whatever it takes to support your family while we try to contain this virus"
#bcpoli #cdnpoli #covid19
— LizaYuzda (@LizaYuzda) March 18, 2020
The $82 billion package is split into two main categories: $27 billion in direct supports and $55 billion in tax deferrals.
There are a number of ways this new suite of policies could put money in your bank account soon, Trudeau promised.
Boosting tax credits
For families with kids, the government is boosting the Canada Child Benefit by $300 per child starting in May, costing nearly $2 billion, Moneau said.
The government also plans to double the Goods and Services Tax credit, which goes out to households with low or moderate incomes. This will mean an extra $400 for individuals and $600 for couples on average, according to Morneau.
If you’re a low- to moderate-income single parent with two kids, these changes will put an extra $1,500 in your pocket, Morneau said.
Emergency Care Benefit
The Government of Canada says on its website it will start sending $900 every two weeks to some Canadians for up to 15 weeks starting in April (it needs to be passed by the House of Commons and receive royal assent first). Once it’s available, you will have three ways to apply: through the Canada Revenue Agency website, through a My Services Canada account or by calling a toll free number (that hasn’t been announced yet).
You will need to attest every two weeks that you meet at least one of the following criteria:
- People who are in isolation or are sick with COVID-19 but do not qualify for employment insurance (EI). This includes the self-employed, such as freelancers.
- Workers, including self-employed, who are unable to work because they are taking care of someone with COVID-19 – but do not qualify for EI.
- Parents who need to take care of kids who are at home due to school closures and aren’t receiving a paycheck from work. The emergency care benefit still applies if such a parent also qualifies for EI.
Emergency support benefit
In addition to support for people who are unable to work for reasons related to the pandemic, the government has also said it will set up a $5 billion “emergency support benefit” for people who are facing unemployment but do not qualify for EI. Few details are available at this point, but the government said it will be available in April.
Support for Indigenous communities
Trudeau said the federal government will give $305 million to the Indigenous Community Support Fund that will address the “immediate needs” of Inuit, Metis and First Nations communities.
Student loan pause
Starting in early April, anyone repaying student loans will get a six-month, interest-free break on the federal portion of their loan, Trudeau said.
— Isabelle Raghem (@IsabelleRaghem) March 18, 2020
Protecting retirement funds
Morneau said the government will reduce minimum withdrawal requirements by 25 per cent from registered retirement income funds. The finance minister said this change should ease the worries of seniors who might otherwise have to liquidate their assets to meet withdrawal requirements. “Similar” rules will also apply to pension withdrawals.
Helping the homeless
The aid package includes an additional $157.5 million to homeless shelters. This could help them buy extra beds and barriers so clients can practise better social distancing.
Supporting those fleeing violence
While we're asking Canadians to stay home if they can, we also know that home isn't always the safest place. For people fleeing gender-based violence, we're going to ensure you have the resources you need, with $50M for shelters and sexual assault centres. https://t.co/TDw5S47CNF
— Maryam Monsef (@MaryamMonsef) March 18, 2020
While public health officials are telling Canadians to stay home, that means facing violence and abuse for many, Morneau said. The government is therefore providing $50 million organizations that shelter and support women fleeing domestic violence and sexual assault.
The feds have also said they will make it easier for people to reduce their working hours and receive EI benefits to compensate. This applies to people who work for companies that are suffering due to “developments beyond their control.” The process to apply for the program and the eligibility will be extended to 76 weeks, Trudeau said.
On average, it will put an extra $1,500 in the pockets of struggling families, the government said.
Easing EI requirements
The government had previously announced it would waive the one-week waiting period to apply for EI. On Wednesday, it said it would also waive the requirement to provide a medical certificate to access benefits – instead requiring only a simple attestation.
Tax and mortgage breaks
Trudeau and Morneau announced a suite of policy changes they said would give Canadians “flexibility” while the economy and their private finances are rocked by the COVID-19 crisis.
The deadline to file your tax returns will be extended to June 1. But anyone hoping to receive the boosted tax benefits (see above) should apply as soon as possible, the government said. For trusts with a tax year ending at the end of 2019, the deadline will be pushed to May 1.
If you’ve already filed your taxes and owe the government money, you now have until Aug. 31 to pay.
Businesses will also be able to defer income tax payments until Aug. 31. The CRA will also stop auditing businesses for the next four weeks.
Six month payment deferral for affected mortgage holders at major banks given #COVID19
Curious if/when government will step in to provide similar relief/support for renters (already hearing some stories about landlords bracing to support affected tenants however they can). https://t.co/JYXDMjoIqE
— Martin MacMahon (@martinmacmahon) March 18, 2020
Morneau said that he has been in contact with the heads of Canada’s big banks. They’ve agreed to defer mortgage payments for up to six months, he said. For details on this, you are encouraged to contact your mortgage provider.
The Canada Mortgage and Housing Corporation will be supporting lenders to help them defer mortgages, Morneau said.
Helping Canadian business
Morneau said the federal government will help the thousands of Canadian businesses struggling during the pandemic crisis.
Morneau said the federal government will subsidize wages at companies hurt by the crisis. The 10 per cent boost – capped at $1,375 per employee and $25,000 per employer – will help stave off layoffs, he said. Small businesses and nonprofits will benefit, he said.
The federal government will use the Canada Account, usually restricted to support some exporters, to provide loans, guarantees and insurance to companies struggling due to the pandemic, Morneau said.
There will also be money available through the Business Credit Availability program – for a total of $10 billion targetted at small and medium sized businesses.
The feds also plan to buy $50 billion worth of insured mortgages to provide stable funding to financial institutions, giving them the liquidity they need to keep lending money to consumers and businesses alike.