Prime Minister Justin Trudeau unveiled a sweeping emergency-aid package Wednesday aimed at helping Canadian workers and businesses survive the severe economic downturn caused by the new coronavirus pandemic.
The stimulus package – which includes $27-billion in emergency aid for workers and businesses and $55-billion in tax deferrals – will inject billions of dollars into businesses to help with their cash flow and to keep workers on the payroll, even if they have been sent home, while bolstering federal benefits and support programs for people who have lost their jobs.
"There are many families across this country who are looking at their sources of income drying up because of COVID-19,” Mr. Trudeau said. “Many workers do not qualify for EI. Therefore, we are putting in place exceptional measures that will flow money to them every two weeks.”
The package was announced at the same time as the Trump administration is proposing pumping US$1-trillion into the economy, including direct payments to Americans. Earlier this week, Britain unveiled a US$400-billion rescue package for businesses, and France is planning US$50-billion in crisis measures to help companies and workers.
Finance Minister Bill Morneau said he is working with the airlines and oil and gas sector on specific measures to help them through the difficult times. The energy sector is reeling from crashing oil prices, with U.S. crude hitting 18-year lows at one point.
Without mentioning specific measures, Mr. Morneau said Ottawa is looking at additional financial support for oil and gas workers and financial incentives to help create jobs in reclaiming orphan wells. He has also sought out proposals from the airline executives who are asking for cancelling landing fees and other charges.
Market volatility because of the pandemic continues. On Wednesday, the S&P/TSX Composite Index fell 7.6 per cent, hitting its lowest level since 2012, and the Dow Jones Industrial Average dropped 6.3 per cent.
The Prime Minister told a news conference Wednesday that Ottawa is taking immediate action to help Canadians who don’t qualify for Employment Insurance or don’t have access to paid sick leave.
The government announced two entirely new programs: The first – a $10-billion Emergency Care Benefit – will provide $450 a week for 15 weeks for workers who are quarantined or sick, or for parents who must stay at home to care for their children owing to school closings; and the second – a $5-billion Emergency Support Benefit – will provide funding to recently unemployed Canadians who do not qualify for EI.
The government promised that further details on the second measure, including the size of individual payments, will be announced in the coming days.
In addition, small-business owners will receive a temporary wage subsidy from Ottawa that will be equal to 10 per cent of salary paid to employees for a period of three months. The measure is estimated to cost $3.8-billion.
“This will encourage employers to keep staff on the payroll during this uncertain time,” Mr. Trudeau said.
Taxpayers will not have to file their returns this year until June 1 and can defer any payments until after Aug. 31.
Payments will also be increased through existing programs that are geared to income, including $5.5-billion in May through the GST credit and $1.9-billion through the Canada Child Benefit (CCB)
The government will place a six-month moratorium on repayment of student loans, provide $157.5-million for homelessness programs and more than $300-million for Indigenous communities.
Conservative Leader Andrew Scheer issued a statement saying “Conservatives will always support measures to put more money in Canadians’ pockets during this difficult time.” He also said the party will push for additional support for small businesses and workers and for clearer timelines.
NDP Leader Jagmeet Singh told The Globe and Mail on Wednesday that the Prime Minister announced some really strong measures to help out people who need it most.
"My only concern, what I'm hearing from people, is they're worried about how long it is going to take to get that help," Mr. Singh said. "I want to make sure we are doing everything possible to speed it up."
Alberta Premier Jason Kenney called the federal announcement a “very good first measure,” but he warned that the Canadian economy, and specifically his province’s oil-and-gas sector, will need considerably more help than what was announced on Wednesday. He said he’s confident the federal government has heard that message.
“I think we can all agree that it will have to be an order of magnitude larger,” Mr. Kenney said in Edmonton. “I know they are working specifically on packages for the aviation and energy sectors, recognizing their unique vulnerability right now.”
The $82-billion package in federal support was hastily put together over the past few days in place of a federal budget that had been planned for March 30.
Last week, Ottawa pledged $1-billion in funding for health research and aid to the provinces, as well as $10-billion in new credits to backstop businesses. It also announced $300-billion in liquidity measures through the Office of the Superintendent of Financial Institutions and committed to buy up to $50-billion in mortgages to allow banks to continue to lend.
In the new plan announced Wednesday, Mr. Trudeau said Export Development Canada will provide support for Canadian companies hit by the COVID-19 crisis and Farm Credit Canada will receive additional funds to help farmers.
Mr. Trudeau said the government recognizes that many businesses are closed and that many workplaces are facing significant slowdowns, but that the “fundamentals of the Canadian economy are strong.”
The Prime Minister said he has been co-ordinating economic actions with other Group of Seven leaders including U.S. President Donald Trump. The two leaders agreed to close the border to nonessential travel, but will keep trade flowing.
Foreign Affairs Minister François-Philippe Champagne said he has asked his Saudi counterpart to convene a special virtual meeting of the Group of 20 alliance to discuss a co-ordinated response to the COVID-19 outbreak. Saudi Arabia holds the G20 presidency this year, but leaders are not scheduled to hold their annual meeting until November.
“We’ve been nudging the G20 presidency in order to gather the group, the foreign ministers, together to talk, and eventually leaders," Mr. Champagne said in an interview with The Globe on Wednesday. “But we’re not wasting time. In the meantime, we have organized ourselves with a smaller group of countries to already start a discussion.”
Mr. Champagne said he plans to speak with eight of the G20 countries on Thursday. The G20 played an important role in responding to the 2008 financial crisis, when world leaders convened an emergency meeting in Washington to agree on measures to help rescue the global economy.
With reports from Michelle Carbert and Kirsty Kirkup
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