The Canadian government is taking all the necessary steps to stop the spread of COVID-19 and curb the increase in the number of new cases. Because of the lockdown situation, the country’s economy took a hit and the government came up with an economic response plan to significantly improve the economic and financial condition of its citizens in this pandemic situation. Some of the highlights of the economic plan are as follows,
For Individuals and Families :
Increase in the Canada child benefit
The government is providing an additional $300 per child through the Canada Child Benefit (CCB) plan. An average family will get approximately $550 in the month of May. You can apply for the CCB here.
Extra time to file income tax returns
The income tax return filing due date is extended until June 1st, 2020. New income tax balances due or installments can be done until after August 31, 2020 without any interest or penalty.
To manage the financial difficulties caused by COVID-19, Canadian banks are working with their customers to find suitable solutions. The Canada Mortgage and Housing Corporation 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.
Canada’s mortgage insurers are committed to providing homeowners with solutions to mitigate temporary financial hardship related to COVID-19. This includes permitting lenders to defer up to six monthly mortgage payments (interest and principal) for impacted borrowers. Deferred payments are added to the outstanding principal balance and subsequently repaid throughout the life of the mortgage.
Canada Emergency Response Benefit (CERB)
The government of Canada will provide a taxable benefit of $2,000 every 4 weeks for up to 16 weeks to eligible workers who have lost their income due to COVID-19.
The CERB is available to workers who meet all of the following conditions:
- live in Canada and are at least 15 years old
- stopped working because of COVID-19 or are eligible for EI regular or sickness benefits
- have not voluntarily quit their job
- had an income of at least $5,000 in 2019 or in the 12 months prior to the date of their application.
On April 15, the government announced changes to the eligibility rules to:
- Allow people to earn up to $1,000 per month while collecting the CERB.
- Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.
- Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
An online questionnaire will help us direct you to the service option that best fits your situation (i.e. eligibility for Employment Insurance benefits or not).
Do not apply for the CERB if you have already applied for EI.
You can also apply over the phone: 1‑800‑959‑2019 or 1‑800‑959‑2041
Improving access to essential food support
The government is providing $100 million to national, regional, and local organizations across Canada to:
- Purchase, transport and distribute food and other basic necessities
- implement safety measures, such as the purchase of personal protective equipment, to reduce the spread of COVID-19 among volunteers and clients.
These organizations – including but not limited to Food Banks Canada, Salvation Army, Second Harvest, Community Food Centres Canada, and Breakfast Club of Canada – will work with partners to meet the urgent food needs of Canadians.
Women’s shelters and sexual assault centers
The government is supporting women and children fleeing violence, by providing up to $50 million to women’s shelters and sexual assault centers, including facilities in Indigenous communities, to help with their capacity to manage or prevent an outbreak in their facilities.
Youth support: mental health
The government is funding $7.5 million to Kids Help Phone to provide young people with the mental health support they need during this difficult time.
For Businesses :
Canada Emergency Wage Subsidy
The Canada Emergency Wage Subsidy (CEWS) supports employers that are hardest hit by the pandemic, and protect the jobs Canadians depend on.
The subsidy covers 75% of an employee’s wages – up to $847 per week – for employers of all sizes and across all sectors who have suffered a drop in gross revenues of at least 15% in March and 30% in April and May.
The program will be in place for a 12-week period, from March 15 to June 6, 2020.
Temporary 10% Wage Subsidy
The Temporary 10% Wage Subsidy is a three-month measure that will allow eligible employers to reduce the amount of payroll deduction required to be remitted to the Canada Revenue Agency (CRA).
More time to pay income taxes
The payment of income tax owing on or after March 18 and before September 2020 can be deferred until August 2020. This is applicable to tax balances due, as well as installments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
Establishing a Business Credit Availability Program
The Canadian government established a Business Credit Availability Program (BCAP) to provide $40 billion of additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).
This program includes:
- Loan Guarantee for Small and Medium-Sized Enterprises
- Co-Lending Program for Small and Medium-Sized Enterprises
Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.
These programs will roll out in mid-April, and interested businesses should work with their current financial institutions.
Launching an Insured Mortgage Purchase Program
Through the Canada Mortgage and Housing Corporation, the Canadian government launched an Insured Mortgage Purchase Program and will purchase up to $150 billion of insured mortgage pools. This will provide long-term stable funding to banks and mortgage lenders, help facilitate continued lending to Canadian consumers and businesses, and add liquidity to Canada’s mortgage market.
Bank of Canada’s actions
The Bank of Canada is acting in several ways to support the economy and financial system and stands ready to take any and all actions that it can to protect the well-being of Canadians during this difficult time. The Bank has responded by lowering interest rates, intervening to support key financial markets and providing liquidity support for financial institutions.