The federal government is rolling out a sweeping economic package worth $82 billion to help Canadian workers and businesses recover from the shock of the growing COVID-19 pandemic.
Prime Minister Justin Trudeau said Ottawa will spend $27 billion in direct support for Canadians and $55 billion in tax deferrals, which, he said, represents more than three per cent of Canada’s GDP.
“In these extraordinary times, our government is taking extraordinary measures,” Trudeau told reporters in Ottawa Wednesday.
“No matter where you live, what you do, or who you are, you will get the support you need during this time. In Canada, public health should never hinge on financial considerations,” he said.
Federal and provincial governments are urging Canadians to stay home and practice social distancing, staying two arms’ length away from individuals at all times, to help limit the spread of the novel coronavirus. As of noon Wednesday, there were more than 200,000 cases of COVID-19 worldwide and 8,000 deaths. In Canada, there were 598 confirmed cases and eight deaths.
Wednesday’s spending announcement is on top of the $1 billion-package the Trudeau government announced last week to support provinces and territories responding to the crisis, as well as $10 billion in credit support for businesses.
For those who are stuck at home in self-isolation and who have lost their jobs, the government will provide:
An Emergency Care Benefit of up to $900 bi-weekly for up to 15 weeks for workers who do not have access to paid sick leave or employment insurance. This will include: the self-employed, who are sick, quarantined or who have been directed to self-isolate; those taking care of a family member who is sick with COVID-19, such as an elderly parent or other sick dependents; EI-eligible and non EI-eligible working parents who must stay home without pay to care for their children.
An Emergency Support Benefit of up to $5 billion to support laid-off workers who are not eligible for EI.
An increase in the Canada Child Benefit payments worth an extra $2 billion in support.
A $5.5 billion top up to the Goods and Services Tax (GST) credit for low and modest incomes Canadians.
The government will waive the requirement for a medical certificate to access EI sickness benefits and, as announced last week, will also waive the mandatory one-week waiting period for EI sickness benefits for those directed to self-isolate.
Other measures to help ease financial burdens during the coronavirus crisis include:
Extending the personal income tax filing deadline to June 1, and pushing payments back until Sept. 1.
Helping banks defer mortgage payments for homeowners.
Freezing Canada Student Loan payments for six months.
Reducing minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25 per cent for 2020, due to the volatile nature of the market.
Ottawa is also spending $305 million to address needs in Indigenous communities, giving up to $50 million to women’s shelters and sexual assault centres to increase capacity and prevent outbreaks in their facilities, and boosting its homeless programs by $157 million.
Businesses will also be given direct assistance:
Small businesses will be provided a 10-per-cent wage subsidy for 90 days, a measure worth up to $1,375 per employee and $25,000 per businesses, in order to keep staff on the payroll.
Businesses will also be able to defer 2019 income tax payments until Sept. 1.
The federal government had already announced it is providing $10 billion to businesses through the Business Development Bank of Canada and Export Development Canada to ensure they have enough capital. It said it will also augment credit available to farmers through Farm Credit Canada.
The prime minister said direct payments to Canadians would likely take a “few weeks” to get out the door, especially for those who do not qualify for EI.
This is the first wave of assistance, Trudeau said. “Our government is prepared to do more.”
The prime minister and Finance Minister Bill Morneau, who spoke to reporters at a later press conference in Ottawa, were both questioned about why the federal government had not chosen to send cash directly to Canadians, as the White House plans to do. Reporters noted that there were very limited measures for seniors, who are being told not to work and to stay at home, and there were no measures for the self-employed who do not have children and who are not sick.
“We are trying to monitor the situation, if there is something specific that is required, then we will step up,” Morneau said in French.
‘We have the fiscal room’: Trudeau
The prime minister also denied that implementing the measures means that a recession is inevitable, saying the focus right now is on making sure Canadians who are seeing their income or revenue dry up have the money to support their families.
While the closure of businesses and other slowdowns will have an economic impact, Trudeau said, the fundamentals of the economy remain strong.
“We have the fiscal room to do this because of prudent decision-making over the past five years. We will be able to ensure that our economy gets back up to speed very quickly.”
Morneau, likewise, said that while his job is to maintain Canada’s fiscal track in ordinary circumstances, the COVID-19 pandemic has temporarily upended that.
Morneau said his “only job” as finance minister right now is to “make sure that Canadians can keep food in the fridge and that they can keep a roof over their heads, that they can afford the medicine they need.”
Though the House of Commons suspended business last week, Trudeau said opposition parties are collaborating and he expects the measures to pass quickly.
Only 20 MPs and the Speaker of the House of Commons are required to pass the emergency measures in the chamber. Liberal House Leader Pablo Rodriguez said Parliament could be recalled as early as next week and they were looking at asking MPs who wouldn’t need to travel by plane to drive to Ottawa.
With files from Zi-Ann Lum
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