Loopstra Nixon COVID-19 Relief Task Force Bulletin
Today the Canadian government announced the following measures to shore up the economy in the wake of the COVID-19 slowdown.
The following summarizes the relief announced by the Prime Minster, the Finance Minister and the Governor of the Bank of Canada.
Measures for Business:
- Corporate Income Taxes deferred until September 1, 2020. Unclear if the deferral will require a balloon payment of all back installments at that time.
- Previously announced $10 Billion BCAP Program to be administered through the Business Development Bank of Canada and Export Development Canada.
- The BCAP money will initially be distributed through BDC and EDC’s existing channels. Each agency will also rollout specific programs to distribute funds. Details are expected in the coming days and weeks. We ae in contact with BDC and EDC and will pass along details as they are learned.
- Wage subsidy for small businesses. This will be a 3 month program where small business are able to recover 10% of employees salary up to a maximum of $25,000. They have not specified what qualifies as a small business. If they follow Industry Canada’s definition that would be defined as under 100 employees. We will follow this as it develops.
- Farmers will benefit from increases in the liquidity for farmers. This will be administered through Farm Credit Canada.
- Minister Morneau has received Commitment from Canadian Banks to support those businesses affected by COVID 19. Business owners should reference this commitment in their discussions with their account managers. To the extent that bankers are able to exercise discretion, the government’s message should inform how that discretion is exercised.
- Travel Restrictions do not impact commerce or trade.
- Bank of Canada freeing up $300,000,000 in additional lending capacity.
Border Control Measures:
- Agreement reached with US government to temporarily restrict non-essential travel (recreation or tourism not permitted).
- Essential Travel will continue. Supply chains will remain open. Trucking not affected. Commerce and Trade allowed.
- Expect travel to be limited to movement of goods and access for those with work permits.
Measures for Individuals:
- Many of the benefits will be available online and individuals will be to receive direct payment online through direct deposit.
- All that is required is a simple online attestation.
- Tax filing deferral until June 1, 2020.
- Canada’s large banks to permit mortgage deferrals for certain Canadians. Likely to be limited to mortgages that are insured through CMHC, Genworth and Canada Guaranty. Will allow qualifying borrowers to defer payments for up to 6 months.
- $50 billion insured mortgage repurchase program designed to de-risk the banks and encourage further liquidity.
- If you don’t qualify for EI, the Government announced an Emergency Care Benefit money for workers who fall ill or have to stay home to stay home to self-isolate or care for a family member for 14 weeks.
- If you lose your job and do not qualify for Employment Insurance or are self-employed you can get access to the Emergency Support Benefit which will provide E.I.-like benefits (up to$900 every two weeks).
- Tax Payment Deferrals until September 1, 2020 without interest (filing deadline extended to June 1st)
- Childcare benefits include a boost to the Canada Child Benefit in the coming months
- Further supplement to the GST tax credit available to those who currently qualify.
- Student Loans – 6 month interest free moratorium on loan payments for federal government student loans.
- Creation of an indigenous communities support fund.
- It will take a few weeks to get cheques in the hands of Canadians who qualify for these payments.