Finance Minister Bill Morneau says the federal government will provide $27 billion of direct support to people and businesses across Canada to aid them financially in the midst of the novel coronavirus pandemic.
“COVID-19 is having a significant impact on our economy, an impact that continues to evolve.” Morneau said Wednesday morning. “At this stage the full breadth and scope of the impact remain unknown.”
“Our government is prepared to do whatever it takes to keep our economy strong and stable. Whatever it takes.”
“Today we are announcing the first phase of Canada’s COVID-19 economic response plan ….We will provide $27 billion of direct support to people and businesses. On top of this we will defer $55 billion of tax revenue, leaving that money in the economy.”
Watch the announcement below:
Emergency care and support benefits
Morneau announced a new emergency care benefit that will pay people $450 a week if they are unable to work because of the virus
“If you are needing to quarantine or self-isolate, or care for a loved one who is sick, you can get around $450 a week, even if you don’t qualify for employment insurance,” he said.
“The new emergency care benefit will provide self-employed Canadians, contractors, freelancers, part-time workers, gig economy workers, with income security if they can’t work because they are in self-isolation or in quarantine or taking care of a loved one.
“This benefit will provide income support of $900 every two weeks for up to 15 weeks.”
Canadians can apply for the benefit online and can receive payment via direct deposit, Morneau said. The benefit will be available starting in early April.
An emergency support benefit will also be introduced, Morneau added.
“For any worker who loses their job and does not qualify for employment insurance, we’ll be introducing a new benefit — the emergency support benefit for which we’ve set aside $5 billion.”
Morneau said more details would be revealed in the near future, but assured Canadians the benefit would provide “14 weeks of support at a comparable level to the employment insurance program.”
GST credit and child care top up
Morneau said the government would be providing a GST credit, and an increase to the Canada child care benefit.
“There are also over 12 million Canadian families with low and modest incomes who will need extra financial support at this time,” he said.
“The government will provide a GST credit averaging close to $400 for single adults, and $600 for couples to see you through.”
The Canada child benefit will top up to $300 per child.
“For a single parent with two children who earns min wage, these two measures combined represent $1500 worth of support.”
Morneau also announced aid to the following groups:
Seniors: The government will temporarily reduce the minimum withdrawal on registered retirement income funds by 25 per cent.
Students: Implementing a six-month interest free moratorium on Canada student loan payback, saving nearly a million Canadians $160 a month.
Indigenous: Creating distinctions-based indigenous community support fund.
Homeless/shelters: The government is investing over $200 million to support the homeless through homeless shelters, sexual assault centres, shelters for woman and children, and to purchase health and safety equipment
Small businesses: Morneau said small businesses would be provided a 10 per cent wage subsidy for the next three months, up to $25,000 per employee. Effective immediately.
The newly announced aid comes on top of the $1 billion the federal government has already committed for provincial health care systems, research, protective equipment, relaxed employment insurance rules and economic stabilization.
And it’s on top of the $10 billion in credit support that it has been made available to businesses.
Deputy Prime Minister Chrystia Freeland says the government is looking to emulate what countries like Singapore have done.
Singapore has devoted roughly one per cent of the value of its economy on measures like wage supplements to help businesses retain workers, business tax credits, cash to innovate once consumer spending rebounds and targeted aid for particularly hard-hit sectors like tourism and air travel.
In Canada, one per cent of the gross domestic product would amount to roughly $20 billion. However, some premiers have warned that at least twice that will ultimately be necessary.
“Canada is in a fortunate position in that we have the fiscal firepower to act and we will,” Freeland said Tuesday.
“And I really want to assure Canadians that the federal government will do what it takes to get us through this crisis and to ensure that Canadian workers, Canadian businesses are in a position to come roaring back when the measures imposed by social distancing can be set aside.”
Prime Minister Justin Trudeau has said the government will announce changes later this week to the imminent tax filing deadlines, to give individuals and businesses more flexibility.