Prime Minister Justin Trudeau gestures as he responds to a question from the media about Canada’s response to the COVID-19 virus in Ottawa, Tuesday March 17, 2020. THE CANADIAN PRESS/Adrian Wyld

Trudeau promises $82B in economic supports in COVID-19 fight

The money will come through a combination of direct supports for workers and businesses and tax deferrals

The federal government will deploy up to $82 billion in direct spending and deferred taxes to help every Canadian get through the COVID-19 pandemic, Prime Minister Justin Trudeau said Wednesday.

“In these extraordinary times our government is taking extraordinary measures,” Trudeau said in a news conference outside his Ottawa residence.

He said the package is aimed at ensuring people can do what they need to do to protect their health and that of others without fear of not being able to feed their families or pay their rent or mortgages.

“Public health should never hinge on financial considerations,” Trudeau said.

The unprecedented financial-aid package will beef up Canada Child Benefit payments for families and GST tax credits for low- and middle-income earners, provide a wage subsidy for small businesses to help them keep staff on the payroll during the slowdown, pause Canada Student Loan payments for six months and establish emergency benefits for people who don’t qualify for employment insurance.

There will be support for shelters that house the homeless or people fleeing gender-based violence, to ensure they can help people and manage the need for some to self-isolate. A separate fund to help First Nation, Inuit and Metis communities respond to COVID-19 is also part of the package.

The single biggest item is deferring tax payments until August, accounting for an estimated $55 billion. Canadian businesses and individuals who owe tax money after today will be able to put off paying it until after August. The government is also moving the deadline for filing taxes to June 1 but is encouraging those who receive benefits from the GST credit or the child benefit to file as soon as possible to get access the additional funds available under those programs.

Health authorities say the novel coronavirus could overwhelm Canada’s hospitals if it spreads freely. Most people suffer relatively manageable symptoms, such as fevers and coughs, but a small percentage of people who get COVID-19 need intensive care, sometimes for weeks. More than 200,000 people around the world have tested positive for the virus and 8,300 are known to have died from it.

There are now 611 confirmed cases of COVID-19 in Canada, including nine deaths.

Canada’s chief public health officer, Dr. Theresa Tam, said the concerning thing is the sharp uptick in cases, as well as wider reports of “community transmission.” Government efforts to reduce the spread of the virus, which originated in central China, are aimed at ensuring the number of cases does not spike so quickly that it overwhelms Canada’s health system.

Finance Minister Bill Morneau said the government is encouraging every Canadian who can stay at home to do so, but acknowledged the wide-scale shut down of everything from schools to retailers to international travel, “is having a significant impact on our economy.”

“This is a challenge like none that we’ve ever faced before,” he said.

“Clearly the impacts of this pandemic have been profound and will continue to be profound. Households and businesses are already feeling the effects. Our government is prepared to do whatever it takes to keep our economy strong and stable. Whatever it takes.”

The government last week announced a $1-billion fund to help Canada respond to the virus, including funds for the health-care system. Morneau said this is still all Phase 1 of the response, with more to come, including looking at what will be needed to help businesses and families return to normal, whenever that can happen.

It is not clear to anyone how long the shutdowns will last but many weeks to months appears to be the minimum projection.

Avery Shenfeld, the chief economist at CIBC Capital Markets, said the federal package will “cushion the blow” but not prevent an expected recession.

Shenfeld said the Canadian aid is better than the current United States’ plan to mail a cheque to every American, because the disruptions are not evenly spread.

“But at this point it makes much more sense for the federal government, which can borrow on our collective behalfs at rock-bottom interest rates, to go deeper into debt, than to rely on business and households to have access to even more credit than they will already need to stay afloat,” Shenfeld said.

Ontario Premier Doug Ford, who enacted a provincewide state of emergency Tuesday, applauded the federal help as “important steps to help keep our economy and people strong.”

Dan Kelly, president of the Canadian Federation of Independent Business, said in a statement the federal package will be of help, but said the wage subsidy on offer needs to be much higher.

Morneau is promising $3.8 billion to help small businesses, charities and non-profit organizations keep paying employees, by subsidizing 10 per cent of an employee’s wages for three months. It will max out at $1,375 per employee and $25,000 per business.

But the CFIB said by last weekend half of Canada’s small businesses had reported drops in sales, and a quarter said they won’t survive a significant drop in income that lasts more than one month. CFIB wants the government to increase the wage subsidy from 10 per cent to between 75 and 90 per cent, which is what some European countries have done. Denmark, for instance, offered a 75 per cent wage subsidy for up to three months.

Trudeau has been in self-isolation for nearly a week because his wife, Sophie Gregoire Trudeau, tested positive for COVID-19 on March 13, after a trip to England. Trudeau said he and their three children, who are also in isolation, have shown no symptoms. Gregoire Trudeau continues to suffer flu-like symptoms including intermittent headaches and fevers but is recovering.

In the middle of the press conference the prime minister suddenly paused to run back inside to grab his coat. He said he is supposed to be modelling good health behaviour and while it was sunny in Ottawa, “it’s a little brisk.”

Trudeau and U.S. President Donald Trump announced separately the U.S.-Canada border will be temporarily closed to non-essential travel, but Trudeau said the critical supply chain between the two countries will continue.

While many civil servants who will be needed to roll out the aid package are working from home, Trudeau said the government has spent the last few days ensuring the capacity to get the money out because too many Canadians and businesses are “looking at their sources of income dry up because of COVID-19.”

“It could make a difference on the health of all Canadians,” he said. “People need to be able to self-isolate, need to be able to stay home, need to be able to care for their families.”

The government has stressed that Canada has a strong financial position that will allow it to absorb the costs.

Economic growth in Canada and around the world, already sluggish before the outbreak, has slowed to a crawl, with many economists predicting a global recession.

READ MORE: Canadian banks move to help customers, allow deferral of mortgage payments

READ MORE: Canada-U.S. border closing to non-essential travel

The Canadian Press


Like us on Facebook and follow us on Twitter.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Connexus adpating their services to meet needs amidst COVID-19

Connexus Community Resources is open via phone, text, or video conferencing for… Continue reading

Letter: We go to work for you, stay home for us

By Dr. Rebecca Janssen, Chief of Staff, St. John Hospital, Vanderhoof Dear… Continue reading

Letter: Lets stay strong

By Gerry Thiessen, Mayor of Vanderhoof March 27, 2020 It’s been two… Continue reading

Better COVID-19 testing results needed in the north

Former senior Northern Health official also wants work camps shut down

Social media a blessing and a curse during time of crisis: B.C. communication expert

‘In moments of crisis, fear is very real and palpable,’ says SFU’s Peter Chow-White

B.C. records first at-home death from COVID-19, but 70+ hospital patients have recovered

Total of 970 novel coronavirus cases in B.C., with the majority in the Lower Mainland area

BC Ferries able to restrict travel for sick passengers

Ferries working on schedule shifts to keep workers safe

Pay parking suspended at B.C. hospitals due to COVID-19

Temporary free parking reduces need for keypads, contact

Canada expands 75% wage subsidy to COVID-19 affected businesses of all sizes: Trudeau

Program will provide up to $847 per week for each worker

Helping those at risk, one piece of paper at a time through ‘isolation communication’

Simple paper tool during pandemic making its way across Canada thanks to social media.

‘Back to school, in a virtual way’ for B.C. students in COVID-19 pandemic

Province adds online resources to help parents at home

Canadian COVID-19 round-up: Air Canada cuts 15,000 jobs, 90% of flights

Comprehensive Canadian news update as of 2:30 p.m., Monday, March 30.

Canadian ferry operators call for inclusion in COVID-19 travel restrictions

Domestic travel restrictions should include ferries, operators say

Most Read