Income aid hits $16B in one month
Funding represents badly needed support for workers hit by pandemic
The Canadian government has delivered $16 billion in income support to workers over the past month, in what represents the first major instalment of Prime Minister Justin Trudeau’s stimulus package.
The government has paid out $7.9 billion in unemployment insurance benefits from new claimants since March 16, according to a person familiar with the matter who spoke on condition they not be identified because the figures are not public. A further $8.4 billion has been sent to residents not eligible for jobless insurance through the Canada Emergency Response Benefit (CERB), which pays $2,000 a month.
The money, which amounts to about 20 per cent of what would typically be earned by Canadian workers in one month, represents a badly needed injection of income to buffer the effect of the pandemic. The government has also begun issuing one-time payments to low-income individuals through a sales tax credit, estimated to provide another $5.5 billion.
A lot more is coming. The CERB income support program is intended to last for a total 16 weeks, costing $24 billion over that time, but is designed to be scaled up or extended if necessary. Employment insurance benefits typically last between 14 and 45 weeks, depending on region. The government has received a total of 6.2 million unique applications under the two benefit programs since March 16, the government official said.
The government’s flagship program for business — a wage subsidy of 75 per cent — is worth a much larger $73 billion over a 12-week period, and is expected to start within a few weeks.
The government estimates direct spending programs will cost a total of $107 billion by June, representing just less than five per cent of economic output. The government’s plan provides at least another $155 billion worth of business credit and temporary tax deferrals.