HALIFAX—Prime Minister Justin Trudeau and Finance Minister Bill Morneau revealed the details of a massive economic stimulus package today.
As it attempts to limit the economic damage caused by the COVID-19 pandemic, the federal government plans to spend $27 billion on a broad range of programs to help both businesses and individuals affected by the virus.
The measures include everything from paying parts of people’s salaries for small business owners, to giving bi-weekly checks to people forced to stay home because of the virus.
To help business owners, workers, and anyone affected by the virus make sense of all the new programs, Huddle has outlined some of the most significant ones below:
Wage Subsidies For Small Employers
To help small businesses keep their employees working, the government will start paying 10 percent of employee salaries for the next three months.
This, Trudeau said, “will encourage employers to keep staff on the payroll during these uncertain times.”
The subsidies will be good for as much as $1,375 per employee, and $25,000 per employer. Any businesses eligible for the small business deduction—as well as non-profit organizations and charities– can claim them
According to Finance Minister Bill Morneau, the subsidies will be available to businesses “immediately.”
Direct help paying employee wages is exactly the kind of help both small Maritime businesses and the CFIB have been calling for.
More Time To File And Pay Taxes
The federal government is also giving businesses and individuals more time to file and pay their taxes.
The CRA is giving businesses more time to pay their outstanding taxes by extending the deadline to pay until September 2020.
They also won’t charge any interest on outstanding taxes due during the grace period.
Individuals are getting the same relief on outstanding taxes, plus an extra month to file in the first place. That means the new tax deadline will be June 1 instead of May 1.
During his press conference, Trudeau said these deferred tax payments will mean an extra $55 billion will stay within the Canadian economy instead of going to the government.
Help With Mortgage and Credit Payments
Thanks to $50 billion from the Canadian Mortgage and Housing Corporation, Canada’s six biggest banks are helping small businesses and individuals keep up with their loan and mortgage payments.
The Bank of Montreal, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank, and TD Bank will give credit relief to customers facing things like pay disruptions due to COVID-19, childcare disruption due to school closures, or illness.
That relief includes deferrals of up to six months on mortgage payments and “the opportunity for relief on other credit products,” which Morneau said that could mean things like skipping a car loan or credit card payment.
Everything will be looked at on a case-by-case basis, but the banks are urging any customers who might need to help to get in contact.
Financial Help For People Without EI Or Paid Sick Leave
The government will also be making bi-weekly payments to anyone who can’t get to work because of the virus but doesn’t qualify for Employment Insurance or paid sick leave.
Morneau explained that people in that situation will be eligible for $900 every two weeks, for a total of 15 weeks, through the Emergency Care Benefit.
Anyone forced to stay home from work because they are quarantined, taking care of sick families, or looking after kids who can’t go to school or daycare.
“People need to be able to self-isolate, need to be able to stay home, need to be able to care for their families when their ordinary sources of revenue dry up,” Trudeau said.
Applications for the benefit will be open in April through the CRA, and any Canadian can apply online, without a note from their doctor.
Morneau said It will take “a few weeks” and require some emergency legislation to get the program up and running and start sending out money.
Financial help is also available if you’ve lost your job and don’t qualify for EI, including if you’re self-employed and have to “close shop because of the virus,” Trudeau said.
The help will come through the $5 billion COVID-19 Emergency Support Benefit. Although Trudeau didn’t elaborate on exactly how the fund will work during his announcement.
More Money Back From the Canada Childcare Benefit
To help the 3.5 million Canadian families with children who might need a financial boost during the COVID outbreak, the government is giving extra money back through the Canada Childcare Benefit.
This will mean an extra $300 per child to families receiving the benefit, as part of their May payment, which is an average of $550 per family.
More Money Back From GST Credits
Extra money will also flow to 12 million lower-income Canadian families in the form of a one-time special payment that will double the size of their GST refunds.
The government says the average boost to income will be “close to $400” for single people, and close to $600 for couples.
Together, the proposed enhancements of the GSTC and CCB will give a single parent with two children and low-to-modest income almost $1,500 in additional short-term support.
A Six-Month Stop On Student Loan Payments
The government is also giving recent graduates a break.
For the next six months, it’s placing an interest-free moratorium on all student loan payments.
Both Trudeau and Morneau stressed that the measures announced today likely won’t be the end of government support for people affected by coronavirus.
“Our response will evolve as our situation evolves,” Trudeau said. “We have been looking at all options. We’re not taking any options off the table.”
“This is a challenge like none we’ve ever faced before,” Morneau added.
He said the impacts of COVID-19 have so far been “profound” for the country and that the help announced today is only “phase one” of the government’s economic stimulus package.