With many Canadians now at home, the federal government announced an economic response plan to stabilize the economy and help Canadians affected by the impact of the coronavirus (COVID-19) pandemic.
The first phase of the plan consists of $27 billion in direct supports and another $55 billion to help business liquidity through tax deferrals. This massive aid package totals $82 billion which represents 3% of our national GDP.
Speaking from outside Rideau Cottage, Prime Minister Justin Trudeau also announced the following measures that are part of this plan:
A temporary boost to the Canada Child Benefit;
A new Emergency Care Benefit of up to $900 biweekly for up to 15 weeks, to provide income support to workers, including those who are self-employed and those who have to stay home and don’t qualify for paid sick leave or EI;
A six-month, interest-free reprieve on student loan payments;
Extending the tax filing deadline to June 1st and allowing those who owe money to defer their payments until after August 31st;
Doubling the homeless care program;
Addressing the needs of First Nations, Inuit and Métis communities with the introduction of a new $305 million Indigenous Community Support Fund;
A GST credit for low-income Canadians;
$50 million in support for women’s shelters and sexual assault centres including those on reserve; and
$495 million to reduce the required minimum withdrawals from Registered Retirement Income Funds.
For all the details made in the announcement, please visit the Department of Finance’s website.
The prime minister also announced today that in cooperation with the United States government, the Canada-U.S. border will close immediately to all non-essential travel.
From the desk of Cameron Holmstrom, Consultant
Today’s announcement by Prime Minister Justin Trudeau was one that will ring throughout our history going forward and broke from approaches taken in past crises. This alone speaks to the seriousness of the current situation Canada faces and the needs arising from this pandemic.
What was so striking in today’s announcement was the number and scale of measures to directly support individuals and families. Unlike past crises we’ve seen where the vast majority of support measures went to business, this government has made a point of trying to put money directly in the pockets of individuals to help them stay afloat in this period.
Concerning support for businesses directly, we saw the prime minister announce additional initiatives to those announced last week. These include:
Expanding Export Development Canada’s ability to provide support to domestic businesses;
Providing flexibility on the Canada Account limit to allow the Government to provide additional support to Canadian businesses when deemed to be in the national interest, and;
Making augment credit available to farmers and the agri-food sector through Farm Credit Canada.
These measures will help businesses bridge through these hard times. More measures are expected to come later.
With this approach, it’s clear that the government wants to ensure that Canadian families are protected in these difficult times, can take all the appropriate measures to stay healthy and do their part to flatten the curve. It’s also clear that the government is ensuring that a good balance is being struck between directly supporting families and supporting business.
Announcing a spending package that amounts to 3% of Canada’s GDP is no small step, but when compared to the 4% package that New Zealand announced yesterday, it still gives Canada the capacity to do more. This government has learned a great deal from perceived mistakes of responses to previous crises and have concluded that measures today must directly support individuals and families. It’s refreshing to see the Trudeau government bite the bullet, put partisan dogma aside and do what the situation demands, regardless of how unconventional it may be. It bodes well for what may come going forward as the government continues to respond to this unprecedented crisis.
Yves Giroux, Canada’s Parliamentary Budget Officer went to Twitter to give his thoughts on the Economic Response Plan https://twitter.com/yzgiroux
The Prime Minister coming out to announce the Economic Response Plan without a coat. Which he later went back in for before taking questions from reporters.