Governments around the world are working hard to provide resources to help the citizens now deal with the economic blows from social distancing and the financial impacts we are all dealing with. Central banks are also working hard with initiatives to keep credit flowing and to help with future recovery.
$82 Billion Aid Package
At the end of last week, the Canadian government announced an $82 billion aid package is available to Canadians to help with the Covid-19 pandemic.
The $82 billion is broken down as $27 billion in direct support and $55 billion in the form of tax deferrals. This is phase one as further aid is promised and will be rolled out in the coming weeks.
Tax returns: June 1st in the new income tax deadline to file and payment of taxes owed without incurring interest is now August 31st.
The deadline for self-employment filing is still June 15th but the payment of taxes owed is the same as above for August 31st.
Emergency Care benefit: A payment of $450 a week for those employees or self-employed individuals that are under quarantine themselves, self-isolation or taking care of family members that are sick with Covid-19. This will require proof or evidence that you or a family member has been exposed or has contracted Covid-19. The application for this is to be simple and the benefit will be available in early April paid via direct deposit. Reassessed every two weeks.
EI benefits: 1 week Waiting period waived
Emergency Support Benefit: Workers who lose their jobs due to Covid -19 and that are not eligible for EI will receive a comparable benefit for up to 14 weeks.
Child Tax Benefit:$300 top up to the CCB to assist parents coming in May 2020
GST Payments: The next payment for the GST credit is in May and will average $400 for single adults and $600 for couples. This will affect 12 million Canadians. Coming in early May
Mortgage Deferral: The Canada Mortgage & Housing Corporation will reintroduce the insured mortgage protection program, so banks and lenders can offer mortgage and loan deferral to those impacted by Covid-19.
Banks will work with individuals and businesses on a case-by-case basis to provide a 6-month deferral on a mortgage and other loan products. Call your bank for details.
Retirement Benefit: Temporarily lowering the RRIF minimum payment by 25%, which results in less taxable money coming out of RRIF accounts, and more money remaining invested to recover from the market decline.
Business Credit Availability Program: The Business Development Bank of Canada will provide additional financing to help provide credit to businesses.
Bank of Canada: Rate cut of 0.50% (already in effect)
Wage subsidy for Small Business: 10% wage subsidy for the next three months, up to $25,000 per employer, effective immediately.
To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of the remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
Air Transportation and Oil/Gas Sectors: Additional support for these industries.
Student Loans: Six-month moratorium on student loan payments starting in April
Indigenous Communities: Distinctions based, indigenous community support fund.
Shelters: Additional funding of $207.50 million to support homeless, domestic assault shelters, halfway homes, and transition houses.
BC COVID-19 ACTION PLAN
On March 23rd the BC government announced its own financial aid package in the amount of $5 billion dollars. The plan dedicates $2.8 billion to help people and fund the services and $2.2 billion will provide relief to businesses and help them recover as well.
B.C. Emergency Benefit for Workers & BC Support Benefit: $1,000 payment to those whose ability to work has been affected by the outbreak. This includes both EI-eligible and non-EI eligible, such as the self-employed laid off from work or who have been impacted by Covid-19 due to being sick or quarantined, having to look after school-aged children or sick family members.
B.C. Climate Action Tax Credit: Lower-income families and individuals are eligible for a boost to their regular payment. They will see the maximum credit double this year in July 2020.
Shelters: $1.7 billion includes investments in housing and shelter supports, income and disability assistance programs and crucial health services.
Licensed Daycare providers: support non-profits, service delivery agencies, and child care providers, the Province will continue to provide funding even if these agencies are closed or their regular operations have been disrupted.
Student loans: Freezing B.C. student loan payments for six months, starting March 30, 2020.
ICBC and BC Hydro: Customers can take more time to pay their bills can also apply to existing payment deferral programs at ICBC and BC Hydro. Check with BC Hydro and ICBC for details.
Employer Health Tax: Effective immediately, businesses with a payroll of over $500,000 can defer their employer health tax payments until Sept. 30, 2020.
Also extending tax filing and payment deadlines for the provincial sales tax (PST), municipal and regional district tax on short-term accommodation, tobacco tax, motor fuel tax, and carbon tax until Sept. 30, 2020. Business and light- and major-industry property classes will see their school tax cut in half. The B.C. government is partnering with business and labour leaders to build an economic stimulus plan to provide funding for the hardest-hit parts of the economy such as the tourism, hospitality and culture sectors.
C Emergency Benefit Applications start May 1st
A tax-free, one time $1,000 payment for B.C. residents whose ability to work has been affected due to COVID-19
Aid for Post Secondary Students
$9 billion in aid announced for post-secondary students starting May through August who have been affected by COVID-19. Students will be eligible for $1,250 a month from May through August. That sum can go up to $1,750 if the student is caring for a dependent or has a disability.
The government is doubling student grants for eligible students — up to $6,000 for full-time students and up to $3,600 for part-time students.
Raising the maximum weekly amount that can be provided through the Canada student loans program in 2020-2021 to $350 from $210
Students who volunteer over the summer will be paid between $1,000 and $5,000, depending on the hours they work.
More than $75 million in additional supports for Indigenous post-secondary students
$291 million for federal granting councils to extend expiring federal graduate research scholarships and post-doctoral fellowships and supplement existing federal research grants.
10% Wage Subsidy
On March 18, 2020, Prime Minister Trudeau announced a Helping Businesses Keep Their Workers Wage Subsidy as part of the Economic Response Plan. This program is designed to support businesses that are facing revenue losses and to help prevent lay-offs
Canada Emergency Wage Subsidy (CEWS)
On April 11, 2020, the federal government passed legislation enacting an emergency wage subsidy of up to 75 percent for qualifying businesses. The CEWS is designed to discourage businesses from laying off employees in response to COVID-19.
If eligible, businesses would qualify for the CEWS for up to 12 weeks from March 15 to June 6, 2020. The program is being implemented through technical changes to the Income Tax Act.