The Senate has passed a federal aid package to help Canadians deal with financial hardships caused by Covid-19. This comes after the government and opposition parties reached a revised deal overnight Tuesday – one that did not give the minority government months of unlimited spending without parliamentary approval.
That had been the hiccup, with commentators and the opposition calling the measure ‘undemocratic.’ In the end, that portion was changed to get the opposition to agree. The revised package allows the government to spend on emergency health care measures without parliamentary approval until September 30, 2020, instead of December 31 2021, as was in the original proposal.
Prime Minister Trudeau said Canada’s Emergency Response Benefit means $2,000-a-month for four months to those who lose their jobs and are unable to work because of Covid-19 related reasons. Laid-off workers will be able to access new emergency benefits within 10 days of applying. Trudeau said the government has already processed 143,000 applications.
Finance Minister Bill Morneau says they are targeting April 6 for the delivery date. “We now have $52-billion in direct support – up from the $27-billion announced last week,” said Morneau. With the previous tax deferrals announced, the total aid package is now $107-billion dollars.
Support for people facing unemployment
The Canada Emergency Response Benefit will be accessible through a new secure web portal where applicants can apply. There will also be an automated telephone line or via a toll-free number. The taxable benefit of $2,000 a month for up to 4 months applies to:
- workers who must stop working due to COVID-19 and do not have access to paid leave or other income support.
- workers who are sick, quarantined, or taking care of someone who is sick with COVID-19.
- working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
- workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.
- wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
Increasing the Canada Child Benefit
The government is giving an extra $300 per child through the Canada Child Benefit (CCB) for 2019-20. This will mean approximately $550 more for the average family. This benefit will be delivered as part of the scheduled CCB payment in May. Those who already receive the Canada Child Benefit do not need to re-apply. Apply for the Canada Child Benefit
Special Goods and Services Tax credit payment
The one-time special payment will arrive by early May through the Goods and Services Tax credit for low- and modest-income families. The average additional benefit will be close to $400 for single individuals and close to $600 for couples. There is no need to apply for this payment. If you are eligible, you will get it automatically.
Extra time to file income tax returns
The aid package includes a deferral of the filing due date for the 2019 tax returns of individuals. For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020. Any new income tax balances due, or instalments can be deferred until after August 31, 2020 without incurring interest or penalties. Learn more Note: If you expect to receive benefits under the Goods and Services Tax credit or the Canada Child Benefit, you are encouraged to not delay your 2019 return filing to ensure that your entitlements are properly determined.
Canadian banks have committed to work with their customers on a case-by-case basis to find solutions to help them manage hardships caused by COVID-19. Canadians who are impacted by COVID-19 and experiencing financial hardship as a result should contact their financial institution regarding flexibility for a mortgage deferral. This allows flexibility to be available − when needed − to those who need it the most. Learn more
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. Learn more: Financial Consumer Agency of Canada (FCAC)
A new Indigenous Community Support Fund
The government will provide $305 million for a new distinctions-based Indigenous Community Support Fund to address immediate needs in First Nations, Inuit, and Métis Nation communities.
Enhancing the Reaching Home initiative
For people experiencing homelessness during the COVID-19 outbreak the government is providing $157.5 million to the Reaching Home initiative. The funding could be used for a range of needs such as purchasing beds and physical barriers for social distancing and securing accommodation to reduce overcrowding in shelters.Learn more about the Reaching Home initiative
Support for women’s shelters and sexual assault centres
The aid package includes supporting women and children fleeing violence, by providing up to $50 million to women’s shelters and sexual assault centres to help with their capacity to manage or prevent an outbreak in their facilities.
Support for seniors
The federal government is reducing the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020. Learn more about Registered Retirement Income Funds
Support for students and recent graduates
A moratorium on the repayment of Canada Student Loans. Effective March 30th, a six-month interest-free moratorium begins on the repayment of Canada Student Loans for all student loan borrowers. No payment will be required and interest will not accrue during this time. Students do not need to apply for the repayment pause.Learn more about the moratorium on the repayment