Federal Government Measures for Businesses and Individuals

On March 19 2020, Justin Trudeau's government announced several measures to help Canadian businesses and households. These measures, totalling more than $27 billion, will provide direct support to workers and businesses.

Support for Canadian Families

The federal government has announced support for Canadians who do not benefit from paid sick leave, and who have COVID-19 or are forced to stay home to care of their children.

Among other things, the government is eliminating the mandatory one-week time limit for Employment Insurance for sickness benefit claims, eliminating the requirement to provide a medical certificate and introducing the emergency care allowance.

This allowance provides up to $900 every two weeks for up to 15 weeks. It will be remitted to workers, including self-employed workers, who are quarantined or affected by COVID-19. This measure also applies to the same workers who are caring for a family member with COVID-19 or who have children that require care or supervision because of school closures and who are unable to earn employment income. This measure does not apply to individuals who are eligible for Employment Insurance.

The federal government also announced long-term income support for workers. This measure introduces an emergency support allowance that will provide up to $5 billion to support workers who do not qualify for employment insurance and that are affected by unemployment. This support also includes the Employment Insurance work-sharing program. This program provides benefits to workers who agree to reduce their work schedule because of new circumstances.

For the 12 million of low- and modest-income families, the government proposes to make a special one-time payment through the goods tax credit. The Government estimates that the current amount of the GST credit will double for the 2019-2020 benefit year. The Government estimates that this measure will increase personal income by an average of almost $400 for single people and almost $600 for couples. It will inject more than $5.5 billion into the economy.

For the 3.5 million families with children who may need support, the Government proposes to increase the maximum of Child Tax Benefit in. The Canada Child Tax Benefit would provide families with an average of about $550. This represents almost $2 billion in additional support.

Finally, for Canadian households, the Revenue Agency will allow all taxpayers to defer paying income tax after July 31. This relief would apply to the balance of income tax payable, as well as to income tax instalments. No interest or penalties will apply to these amounts during this period.

Measures for businesses

The federal government is also launching the Insured Mortgage Purchase Program (IMPP). Under this program, the government will purchase up to $50 billion in insured mortgage pools through the CMHC.

In addition, the Government has announced assistance to help businesses retain their employees. The subsidy will be equal to 10 per cent of wages paid over a three-month period. The subsidy will not exceed $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support measure by reducing the income tax payments withheld from their employees' remuneration.

Like the Government of Quebec, the revenue agency will allow all businesses to defer until August 31 the payment of income tax amounts that become payable as of today and before August.

The federal government is also announcing access to credit for businesses. This will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion in additional support, largely targeted to small to medium-sized businesses.

For more information, consult the Government of Canada.