The federal government will extend its business and income support programs until the country’s vaccination campaign is complete, but their subsidy levels will start to drop before the deadline for all Canadians to get their shots.
Finance Minister Chrystia Freeland’s budget, tabled Monday, sets Sept. 25 as the end date for the direct business and personal income supports the government introduced in response to the pandemic. That is in line with the end-of-summer deadline Prime Minister Justin Trudeau set for the completion of Canada’s vaccine rollout. It’s widely expected Canadians could also be sent back to the polls around that time.
The government proposes spending $15.1-billion more to extend the emergency support programs until September and create a new subsidy, which Ms. Freeland called a “lifeline” for Canadians and businesses in her speech to the House of Commons.
The budget also, for the first time, pegged the cost of Canada’s vaccine contracts at more than $9-billion; however, officials were not able to provide any details on that number, including how much has been already spent or allocated.
The Canadian Chamber of Commerce said it was encouraged by the extension of the business supports during the pandemic and cautioned against their hasty withdrawal. “The government must ensure that support is not being removed too early and that the level of support does not decrease too quickly,” president Perrin Beatty said in a statement.
On Monday, neither Ms. Freeland nor federal officials were able to explain why the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy, Lockdown Support and the Canada Recovery Benefit will all decrease before the vaccination program is expected to be complete. The government also did not say whether the decrease is based on metrics such as COVID-19 case counts or vaccination rates.
“No one knows for sure what the course of the virus and new variants will be, and that is why we are prepared to act further and to further extend the supports should the course of the virus require that,” Ms. Freeland said at a news conference.
The Canada Recovery Sickness Benefit and the Canada Recovery Caregiving Benefit are also set to end in September. If the pandemic gets worse, the government will introduce legislation that will allow it to extend those programs until Nov. 20.
Ottawa estimates the extension of the wage subsidy will cost $10.1-billion, on top of the $73-billion already spent. It will continue at its maximum weekly benefit of $847 for every employee until July, before decreasing monthly to $226 a week in September.
The combined extension of the rent subsidy and lockdown support is projected to cost $1.9-billion, on top of the $2.6-billion already spent. The maximum base-rent subsidy will go from 65 per cent in June to 20 per cent in September. The additional 25-per-cent rent support top-up for businesses in lockdowns will continue at the same level until Sept. 20.
The budget will also create the Canada Recovery Hiring Program, for employers who hire new staff or increase staff hours, at an estimated cost of $595-million. It will run from June 6 to Nov. 20.
The extended recovery and caregiving benefits will cost $2.5-billion. The recovery benefit, which replaced the original Canada Emergency Response Benefit last fall, will be extended by another 12 weeks to a maximum of 50. It will decline from $500 a week to $300 a week in the summer.
The caregiving benefit will be extended by four weeks to a maximum of 42 at $500 a week.
As it does away with the temporary programs, the government is introducing permanent income support expenses. It plans to boost Old Age Security payments – by even more than the Liberals promised in the 2019 election campaign – by as much as $766 annually for people 75 or older starting next year. This year, the government will give all seniors in that age group $500, no matter their income. The new spending will cost $12-billion over five years, then at least $3-billion annually. OAS is already the government’s largest permanent income support program.
The government will also make more low-income earners eligible for the Canada Workers Benefit, which will cost $8.9-billion over six years. And – another election promise – it will extend employment insurance sickness benefits to 26 weeks from 15 at a cost of $3-billion over five years and then $967-million annually.
Once new standards for long-term care are finalized next year, the government plans to spend $3-billion over five years to help the provinces and territories implement the new rules. Weak standards in the sector, staffing shortages and a shortage of personal protective equipment contributed to disproportionately high numbers of deaths in long-term care and retirement homes.
In her speech, Ms. Freeland offered an apology to the seniors who, she said, have been “this virus’s principal victims.”
The budget does not set aside any money for Mr. Trudeau’s 2019 election promise to “make sure that every Canadian has access to a family doctor or primary health care team.”
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