Canada/US border closed as support package unveiled
Prime Minister Justin Trudeau this morning announced the latest measures intended to combat the spread of the COVID-19 pandemic.
Firstly, the Prime Minister announced that the Canada/US border is now closed indefinitely for all non-essential travel, with trade and commerce (trucks and trains) still allowed to cross.
Secondly, he outlined an $82 billion support package for individuals and businesses, including $27 billion for economic stimulus and business aid and $55 billion in liquidity to businesses to help stabilize the economy.
The package, amounting to about three per cent of Canada’s gross domestic product, provides in part temporary income support for workers and parents, longer-term income support for workers, income support for individuals who need it most and Canada Revenue Agency will defer the filing due date for the 2019 tax returns of individuals to June 1.
That includes a temporary boost of nearly $2 billion for the Canada Child Benefit and the introduction of an emergency care benefit of up to $900 bi-weekly for 15 weeks for those who have to stay home and don’t have paid sick leave like those who can’t access employment insurance (EI) and are sick, or who are taking care of a child or someone who is sick.
There is also a $5 billion emergency support benefit for support workers who are facing unemployment as well as an additional amount for low-income people through the GST credit, along with waiving the one-week waiting period for EI sickness benefits for six months and waiving the requirement for a doctor’s note to access this assistance.
The government also stated it will support eligible small businesses with a 10% wage subsidy for the next 90 days, up to a maximum of $1,375 per employee and $25,000 per employer.
The $55 billion offered to stabilize the economy includes: allowing all businesses to defer payment of income taxes, interest-free, until after August 31; making more money and credit available to businesses of all sizes, including farmers; and purchasing up to $50 billion insured mortgage pools to stabilize funding to banks and lenders.
The federal government is also working with banks to ensure fairness and flexibility during this difficult and uncertain time.
“The Minister of Finance is in regular contact with the heads of Canada’s large banks, and continues to encourage them to show flexibility in helping their customers whose personal or business finances are affected by COVID-19. The Superintendent of Financial Institutions has also made clear his expectation that banks will use the additional lending capacity provided by recent government actions to support Canadian businesses and households,” outlined a government backgrounder on this support package.
“In response, banks in Canada have affirmed their commitment to working with customers to provide flexible solutions, on a case-by-case basis, for managing through hardships caused by recent developments. This may include situations such as pay disruption, childcare disruption, or illness. Canada’s large banks have confirmed that this support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products. These targeted measures respond to immediate challenges being faced across the country and will help stabilize the Canadian economy.
“The Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty. These include payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.
“The Government, through CMHC, is providing increased flexibility for homeowners facing financial difficulties to defer mortgage payments on homeowner CMHC-insured mortgage loans. CMHC will permit lenders to allow payment deferral beginning immediately.”
See more details at: Canada’s COVID-19 Economic Response Plan: Support for Canadians and Businesses.
During this morning’s (March 18) press conference, Prime Minister Trudeau was asked about when Canadians can expect further clampdowns on movement, such as a ban on domestic travel.
He replied that any and all measures are being considered and “nothing is off the table.”
As of this morning, there are 599 confirmed COVID-19 cases in Canada.