Benefits revised for affected workers
Employees with no income due to pandemic now eligible for $2,000 per month for up to 4 months
OTTAWA — The Liberals are repackaging two previously promised benefits for Canadians whose working lives are disrupted by COVID-19, a change that will almost double direct financial aid in the government’s economic plan to $52 billion.
Combining the two benefits into one will mean a $2,000-a-month payment for up to four months to workers whose income drops to zero because of the pandemic, including if they have been furloughed by their employers but technically still have jobs.
Finance Minister Bill Morneau said the measure allows companies to temporarily let go of workers to cut payroll costs but puts money in the affected employees’ pockets.
“Companies don’t need to separate their employee from their company. They just need to say, ‘We can’t pay you during this time period.’ And when that happens, there is a direct wage subsidy to people, to employees so that they can actually live their lives,” he said.
“When this is done, they can go back to work for their employers, and that, we think, is critically important.”
Affected workers would have to fill out an online application and meet a few conditions to qualify.
It would apply to any affected workers between March 15 and Oct. 3.
Over the last week or so, there have been almost one million new EI claims — far above the typical 45,000. Depending on how things go, the unemployment rate could jump as high as 11.7% by the second quarter, TD Economics wrote in a report Wednesday.
Demand for the new benefit would have overwhelmed the decades-old EI system, the Liberals said Wednesday in a partial explanation for the spending change.
Prime Minister Justin Trudeau, speaking outside his Ottawa residence, said workers have been pulled in from other departments to boost the number of workers taking calls and processing claims to 13,000.
Morneau told the Senate that about 1,300 Canada Revenue Agency workers have been moved to call centres, and 1,000 more freed up from handling tax returns given the extended filing deadline.
“Public servants are working around the clock while dealing with unprecedented demand and all of the same personal stress everyone else is facing,” Trudeau said in prepared remarks addressed to Canadians in general.
“They will get to your application. Help is on the way.”
Previously, the Liberals proposed two benefits — one to flow through the employment insurance system and another for those who don’t qualify for EI benefits, such as self-employed workers.
The original two benefits, along with a 10% wage subsidy for qualifying businesses, were part of a package of $27 billion in direct spending and $55 billion in tax deferrals.
Now, direct spending will be $52 billion because the new benefit is being funded from general revenues, and not the EI fund covered by employee and employer premiums.
Morneau said the change in spending plans raises the overall value of the economic response to $107 billion from $82 billion.
He said more help would be announced for the oil and gas sector, airlines and the hospitality industry, but didn’t say when.
TD senior economist Brian DePratto wrote in a note that the benefit should ease the burden on businesses, but there is still a need to help small- and medium-sized businesses.
“The pain that small- and medium-sized firms are feeling is intense,” he wrote. “We hope that additional measures to ensure that furloughed workers’ firms still exist after the pandemic-control measures are lifted will be forthcoming.”
The government is aiming to have the new benefit, paid once a month, available starting April 6 with payments landing 10 days afterwards, meaning the first benefits won’t arrive until the middle of April at the earliest. A $300 increase to the Canada Child Benefit lands in May.
Those getting EI benefits now would receive the new benefit, dubbed the Canada Emergency Response Benefit, if payments end before Oct. 3 and they can’t go back to work due to COVID-19.
NDP Leader Jagmeet Singh, who this week called on the Liberals to provide $2,000 payments to all Canadians, tweeted that the “announcement isn’t perfect, but it will help so many people.”
“We need to work to get it to people as quickly as possible,” he added.
The Canadian Federation of Independent Business called the new benefit a “significant step forward,” but said it doesn’t change the need to increase the 10% wage subsidy to 75% or higher as many business and labour groups have requested.
“CFIB is focused on measures that will keep the connections between workers and employers and not require layoffs,” president Dan Kelly said in a statement. “This is imperative to ensure employees can go back to work the day after the emergency ends, allowing Canada’s economy to return to normal as quickly as possible.”
OTTAWA — Parliament has passed sweeping legislation designed to blunt the economic impact COVID-19.
Here’s a look at what’s in the COVID-19 Emergency Response Act:
— A new Canada Emergency Response Benefit that will provide $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic.
— a one-time additional payment under the GST/HST tax credit.
— a top up to the Canada Child Benefit.
— a reduction to required minimal withdrawals from registered retirement income funds by 25% for 2020.
— a temporary wage subsidy for eligible small employers for a period of three months.
— authorization for the government to pay whatever is required in relation to “public health events of national concern,” including by making additional payments to the provinces, until Sept. 30.
— authorization for the federal finance minister to increase the limit on insurance coverage for bank deposits until Sept. 30.
— authorization for the finance minister to increase capital available to Canada Mortgage and Housing Corporation.
— an expansion of the purposes and powers of Export Development Canada.
— authorization for the federal finance minister, until Sept. 30, to borrow money without going to cabinet, with a requirement that the minister report back on how that money has been spent.
— authorization for cabinet to make regulations under the Food and Drugs Act to require people to provide information to the federal health minister, prevent shortages of therapeutic products in Canada or alleviate those shortages or their effects, in order to protect human health.
— amends the Canada Labour Code to provide leave related to COVID-19 of up to 16 weeks and to provide for a quarantine leave under the medical leave regime.
— amends the National Housing Act to increase, for a period of five years, the maximum total for the outstanding insured amounts of all insured loans.
— amends the Patent Act to allow the government to make, construct, use and sell a patented invention to the extent necessary to respond to a public health emergency that is a matter of national concern.
— amends the Canada Student Loans Act and the Canada Student Financial Assistance Act so that from March 30 to Sept. 30 there’s a freeze on requiring student loan repayments. There is also a freeze for the same period under the Apprentice Loans Act.
— amends the Farm Credit Canada Act to the give the federal finance minister the ability to increase how much it can lend.
— amends the Business Development Bank of Canada
Act to give the finance minister the power to determine the limit on the aggregate of the paid-in capital — and any related contributed surplus — of the Business Development Bank and any proceeds prescribed as equity.
— amends the Employment Insurance Act to give the employment minister the power to make interim orders for the purpose of mitigating the economic effects of COVID-19.
— changes the Employment Insurance Act and related regulations to remove the requirement for a doctor’s note to access EI benefits.