On March 20th, we provided you with a summary of the federal and provincial measures imposed in response to the COVID-19 pandemic. In this Bulletin, we provide an updated overview of the national action plan and select provincial measures, including the economic support measures imposed to date.
- Economic Support for Individuals and Families;
- Economic Support for Businesses;
- Taxes and Benefits;
- Border Measures and Travel Restrictions;
- Provincial Measures in Ontario, Québec, Alberta, and British Columbia
DISCLAIMER: We expect that there will be new information available due to constant developments and rapidly changing information. We will continue to keep you posted as more developments occur.
Following an emergency recall of the House of Commons, the government’s Bill C-13, the COVID-19 Emergency Response Act received Royal Assent on March 25.
Economic support for individuals and families
Canada’s response plan offers support to individuals and families through the following initiatives:
- Families receiving the Canada Child Benefit (“CCB”) will receive an extra $300 per child as part of the scheduled payment in May.
- Low and modest income individuals will receive a one-time special payment of approximately $400 by early May through the Goods and Services Tax credit (“GSTC”).
- The Canada Emergency Response Benefit will provide a taxable benefit of up to $2,000 a month for up to 4 months to individuals facing unemployment as a direct result of COVID-19. Online applications may be submitted starting in early April. The following individuals may be eligible to receive this benefit:
- Workers who have been unemployed as a result of the pandemic;
- Working parents who do not have access to child care;
- Workers who are sick or quarantined, or taking care of a loved one who is sick with COVID-19; and
- Self-employed individuals who would not otherwise be eligible for Employment Insurance (“EI”).
- The requirement to submit a medical certificate in order to access EI is waived.
- The required minimum withdrawals from Registered Retirement Income Funds (“RRIFs”) has been reduced by 25% for 2020.
- Insured Mortgage Purchase Program offers government-guaranteed insurance to the following mortgages funded prior to March 20, 2020:
- Low loan-to-value mortgages with a maximum amortization term up to 30 years commencing from when the loan was funded; and
- Low loan-to-value mortgages whose purpose includes the purchase of a property, subsequent renewal of such a loan, or refinancing.
- As of March 30, students and recent graduates repaying their Canada Student Loans will be granted with a 6 month interest-free moratorium.
Economic support for businesses
Small and medium sized businesses have are particularly vulnerable through these tough economic times. The following measures have been implemented to alleviate some of this burden:
- The Work Sharing Program is offered to workers who agree to reduce their working hours due to circumstances beyond their employers’ control. The maximum duration of this program has been extended from 38 to now 76 weeks.
- The government is offering temporary wage subsidies to employers of up to 75 per cent. This program will be applied retroactively as of March 15, 2020 for a period of up to 3 months. More details on eligibility are expected to become available by the end of the month.
- The Business Credit Availability Program (“BCAP”) offers additional credit support to small and medium-sized business businesses particularly in sectors such as oil, gas, air transportation, and tourism.
- Export Development Canada is offering banks a guarantee on business loans of up to $5 million.
- The Canada Emergency Business Account is a new loan program that will provide interest-free loans of up to $40,000 to small businesses and not-for-profits. To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of up to $10,000.
- The Bank of Canada has responded to the outbreak by lowering interest rates, and providing liquidity support for financial institutions.
Canadian taxes and benefits
The Canada Revenue Agency (“CRA”) has responded to the pandemic by deferring income tax filing and payment dates, and offering additional benefits, credits, and support programs. These include:
- Filing and Payment Deferrals:
- Individuals: Filing date for the 2019 tax year has been extended to June 1, 2020, with payments due on September 1, 2020.
- Self-Employed: While the filing date for the 2019 tax year remains June 15, 2020, the payment date has been extended to September 1, 2020.
- Corporations: The filing date for corporations remains 6 months after the end of the corporation’s tax year. The payment date for the current tax year has been extended to September 1, 2020.
- As outlined earlier, new benefits and support programs include: the Canada Emergency Response Benefit, temporary wage subsidies for employers, GSTC special payment, CCB top-up, and reduced minimum withdrawals for RRIFs.
- The CRA has committed to not initiating any post assessment GST/HST or income tax audits for the next 4 weeks.
- On a temporary basis, the CRA will recognize electronic signatures as having met the signature requirement of the Income Tax Act.
Industry specific support
The government’s COVID-19 Response Fund aims to support Canada’s existing industrial and innovation programs to prioritize the fight against the virus. Manufacturing lines of existing Canadian businesses are also being retooled to rapidly scale up the production of essential supplies.
On March 23, the Prime Minister announced that Farm Credit Canada will receive support that will allow for an additional $5 billion in lending capacity to producers, agribusinesses, and food processors. In addition, all eligible farmers who have an outstanding Advance Payments Program (APP) loan due on or before April 30 will receive a Stay of Default, allowing them an additional six months to repay the loan.
Life sciences and medical research
In an effort to quickly mobilize Canadian researchers and life sciences companies, the Government is contributing $275 million for coronavirus research and medical countermeasures. The majority of this funding will be directed towards Canadian private sector companies engaged in the research and supply of potential vaccines and treatment.
Border measures and travel restrictions
Canada has implemented a ban on foreign nationals from all countries, other than the U.S., until June 30, 2020. Moreover, as of March 21, 2020, there is a 30-day restriction on all non-essential travel at the Canada-U.S. border. Non-essential travel includes travel for touristic, entertainment, or recreational purposes. Commercial supply chains remain open and trade between Canada and the U.S. remains uninterrupted despite these measures.
Following sudden border restrictions and flight cancellations, the government is working towards bringing back home Canadians stranded outside of the country. The commercial flights arranged through a coordinated effort amongst the Canadian government, airlines, and foreign governments prioritize stranded travellers who are: Canadian citizens, permanent residents, or immediate family members of Canadian citizens. The COVID-19 Emergency Loan Program offers a repayable loan for Canadians abroad who do not have the immediate funds to return home.
Under the Aeronautics Act, the Minister of Transport requires air operators to deny boarding of a traveller who is symptomatic regardless of citizenship status. In the event the traveller presents COVID-19 symptoms, the airline will be required to refuse to board the passenger for travel for a period of 14 days, or until a medical certificate is presented that confirms the patient does not carry the virus. On March 28, the Prime Minister announced that symptomatic individuals will also be banned from boarding domestic flights and intercity passenger trains.
On March 25, the Minister of Health announced an Emergency Order under the Quarantine Act that requires any person entering Canada to self-isolate for 14 days whether or not they have symptoms of COVID-19. Failure to comply with this Order is an offense punishable by a monetary fine of up to $750,000 and/or imprisonment for six months. This Order does not apply to those who regularly cross to border to provide essential services and ensure the continued flow of goods.
Since our last bulletin on March 20th, all Canadian provinces and territories have declared COVID-19 a public health emergency or a state of emergency, or both.
- Declaration of emergency: Following Ontario’s Declaration of Emergency pursuant to the Emergency Management and Civil Protection Act, the province has enacted fines of up to $1,000 for failing to comply or obstructing any person from performing a duty in accordance with an order made during a declared emergency. The province has also issued an Order to suspend any limitation periods for the duration of the emergency.
- Ontario’s action plan: The Government of Ontario has outlined a $17 billion response to support the health care system, communities, and economy in this time of emergency. This response includes:
- A proposal to double the Guaranteed Annual Income System (“GAINS”) for low income seniors to $166 per month, for six months.
- Assisting families to pay for extra costs associated with school and daycare closures with a one-time $200 payment per child of up to 12 years, and $250 for children with special needs.
- Six months of loan and Interest accrual relief for student borrowers under the Ontario Student Assistance Program (“OSAP”).
- Setting electricity prices for time-of-use customers at the lowest rate, 24 hours a day for 45 days to support ratepayers in their increased daytime electricity usage. The Government of Ontario has also expanded eligibility for the Low-income Energy Assistance Program (“LEAP”).
- Provincial tax deferrals: Providing a five-month interest and penalty-free period to make payments for the majority of provincially administered taxes.
- Workplace Safety and Insurance Board (“WSIB”): To reduce the financial strains on businesses, WSIB will allow businesses to defer premium reporting and payments until August 31, 2020. All employers covered by the WSIB’s workplace and insurance are automatically eligible for this relief package. During this deferral period, WSB will cease interest accrual on all outstanding premium payments, nor will it charge any penalties.
- Closures: Following the Government of Ontario’s declaration of emergency under the Emergency Management and Civil Protection Act, at-risk workplaces are ordered to close-down or explore work-from-home opportunities or other innovative business models. Following this announcement, the government has released a comprehensive list of essential workplaces.
- Supply management: The Government of Ontario has introduced new regulations to target the pandemic pursuant to the Supply Chain Management Act. The Coronavirus Response and Recovery Regulations (O Reg 92/20) enable the Ministry of Government and Consumer Services and the Ministry of Health to centrally manage public sector supply chains and collect key data on inventories, orders, and supply constraints.
- Protecting consumers from price gouging: The Premier has announced new penalties to combat price gouging and hold offenders accountable for raising prices on necessary goods. Pursuant to this emergency Order individual offenders can face a maximum monetary penalty of $100,000 and one year in jail. Corporations could face a fine of up to $10 million. Necessary goods subject to this Order include: masks, gloves, non-prescription medications, disinfecting agents, and personal hygiene products.
- Residential evictions: To keep Ontarians safe and secure during this challenging time, the Ministry of Attorney General has been granted an order suspending the enforcement of residential evictions until ordered otherwise by the court. Tribunals Ontario will not issue any new eviction orders until further notice.
- Ensuring health resources are available to contain COVID-19: The Government of Ontario has issued a new Emergency Order to give hospitals the ability to cancel and postpone services, and free-up space, staff, and equipment to develop, modify, and implement redeployment plans.
- Ontario together: The province has launched a new website to alleviate barriers and allow Ontario’s manufacturing sector redeploy capacity towards the production of essential equipment such as ventilators, masks, and swabs.
- Social gatherings: Ontario is now restricting gatherings of more than five people. There are a few exceptions, including for households with more than five people and for funerals, which will allow up to 10 people at a time.
- Declaration of emergency: Québec declared a health emergency throughout the province on March 13th. This Order was extended on March 29th, to continue to apply until April 7, 2020.
- Temporary aid for workers program: The Gouvernement du Québec has partnered with the Red Cross to provide financial assistance for workers are in isolation due to COVID-19. The lump-sum amount granted to eligible persons is $573 per week for a period of 14 days of isolation.
- Provincial tax deferrals: For individuals and businesses, the deadline for paying an income tax balance for 2019 has been extended to September 1, 2020.
- Closures: All cultural, educational, sportive, recreational, and entertainment venues have been ordered to suspend their activities. The Government has also ordered the minimization of all non-priority services and activities. During this time, all businesses can continue to engage in teleworking and e-commerce.
- Child care: Child care services have been ordered to continue to be provided for a child if one of the child’s parents is employed in industries such as: health care, public security, and emergency dispatch services.
- Residential evictions: Evictions in the province have been suspended during this state of health emergency.
- Student loans: The government has suspended student loan debt repayment for 6 months, including for borrowers whose accounts are in the process of collection.
- Declaration of emergency: Alberta’s Premier and Chief Medical Officer of Health declared COVID-19 a public health emergency on March 17th. As of March 25, law enforcement agencies have been granted full authority to enforce public health orders and issue fines. Any person who contravenes a public health order is liable to a fine of not more than $100,000 in the case of a first offence, and $500,000 in the case of a subsequent offence.
- Closures: Non-essential places of business are no longer permitted to offer or provide services to the public. This Order applies to any place of business providing: non-essential health services, personal services, wellness services such as massage therapy and reflexology, and retail stores.
- Child care: Child care services have been ordered to continue to be provided for a child if one of the child’s parents works in an essential service industry such as health care.
- Residential evictions: Tenants in residential or mobile home sites cannot be evicted for non-payment of rent and/or utilities before May 1, 2020. Late fees cannot be applied to late rent payments until June 30.
- Utility payment deferral: Utility companies are allowing residential, farming, and small commercial customers defer utility bills for up to 90 days. During this time, Albertans will not be cut off from services. To arrange a deferral, customers are encouraged to directly contain natural gas or electricity service providers.
- Student loans: The government has suspended student loan debt repayment for 6 months, beginning March 30. Interest will not accrue during this period.
- Declaration of emergency: On March 17, the Province of British Columbia declared a state of emergency pursuant to the Emergency Program Act. The government has enacted a series of ministerial orders pursuant to this declaration. Amongst these orders, municipal bylaw officers have been enabled to support the enforcement of the provincial health officer’s orders for business closures.
- Financial support: The B.C. Emergency Benefit for Workers will provide a one-time $1,000 payment to people who lost income due to COVID-19. In addition, the government is providing a one-time enhancement to the climate action tax credit for low to moderate-income families.
- Provincial tax deferrals: British Columbia has extended the filing and payment deadlines for Sales Taxes and the Employer Health Tax until September 30.
- Business closures: The government has issued a list of essential services that are permitted to operate during the COVID-19 pandemic.
- Child care: Child care services will be offered to parents working in critical roles. Licensed group child care providers and smaller home-based child care providers are eligible for temporary emergency funding to maintain their operations.
- Residential evictions: The province has introduced a new temporary rental supplement that will help eligible households by offering up to $500 a month towards rent. In addition, new eviction notices may not be issued at this time to end tenancy.
- Student loans: The government has suspended student loan debt repayment for 6 months, beginning March 30.
- Utility payment deferral: The COVID-19 Customer Assistance Program has been implemented to allow customers defer Hydro bill payments and arrange for flexible payment plans with no penalty. The BC Hydro Customer Crisis Fund will also provide access to grants of up to $600 for customers facing financial hardships.
By Wendy J. Wagner, Gowling WLG