Trudeau promises $82B in economic supports in COVID 19 fight
Canada financial-aid package to provide wage subsidy for small businesses, among other measures.
OTTAWA – The federal government will deploy up to $82 billion in direct spending and deferred taxes to help every Canadian get through the COVID-19 pandemic, Prime Minister Justin Trudeau says.
“In these extraordinary times our government is taking extraordinary measures,” Trudeau said in a news conference outside his Ottawa residence Wednesday.
He said the package is aimed at ensuring people can do what they need to do to protect their health and that of others without fear of not being able to feed their families or pay their rent or mortgages.
“Public health should never hinge on financial considerations,” Trudeau said.
The unprecedented financial-aid package will beef up Canada Child Benefit payments for families and GST tax credits for low- and middle-income earners, provide a wage subsidy for small businesses to help them keep staff on the payroll during the slowdown, pause Canada Student Loan payments for six months and establish emergency benefits for people who don’t qualify for employment insurance.
There will be support for shelters that house the homeless or women fleeing domestic violence, to ensure they can help people and manage the need for some to self-isolate.
The biggest single item is deferring tax payments until August, accounting for an estimated $55 billion. Canadian businesses and individuals who owe tax money after today will be able to put off paying it until after August. The government is also moving the deadline for filing taxes to June 1 but encourage those who receive benefits from the GST credit or the child benefit to file as soon as possible to get access the additional funds available under those programs.
Health authorities say the novel coronavirus could overwhelm Canada’s hospitals if it spreads freely. Most people suffer relatively manageable symptoms, such as fevers and coughs, but a small percentage of people who get COVID-19 need intensive care, sometimes for weeks. More than 200,000 people around the world have tested positive for the virus and 8,300 are known to have died from it.
Finance Minister Bill Morneau said the government is encouraging every Canadian who can stay at home to do so, recognizing that “is having a significant impact on our economy.” As such he said the government will do “whatever it takes” to give Canadians confidence the government will be there to protect them.
Trudeau said the government is focused on making sure Canadians have the money they need to support their families, buy groceries and pay the rent.
“No matter who you are or what you do, you should be focused on your health,” Trudeau said.
The prime minister has been in self-isolation for nearly a week because his wife, Sophie Gregoire Trudeau, tested positive for COVID-19 on March 13, after a trip to England. Trudeau said he and their three children, who are also in isolation, have shown no symptoms. Gregoire Trudeau continues to suffer flu-like symptoms including intermittent headaches and fevers but is recovering.
In the middle of the press conference he suddenly paused to run back inside to grab his coat. He said he is supposed to be modelling good health behaviour and while it was sunny in Ottawa, “it’s a little brisk.”
Trudeau and U.S. President Donald Trump announced separately the U.S.-Canada border will be temporarily closed to non-essential travel, but Trudeau said the critical supply chain between the two countries will continue.
“I know it’s a hard time but that’s exactly why we need to keep supporting each other,” Trudeau said.
While many civil servants who will be needed to roll out the aid package are working from home, Trudeau said the government has spent the last few days ensuring the capacity to get the money out because too many Canadians and businesses are “looking at their sources of income dry up because of COVID-19.”
“It could make a difference on the health of all Canadians,” he said. “People need to be able to self-isolate, need to be able to stay home, need to be able to care for their families.”
The government has stressed that Canada has a strong financial position that will allow it to absorb the costs.
The $82 billion is equivalent to about three per cent of Canada’s gross domestic product.
The expansion of the Canada Child Benefit will add $300 more per child for the 2019-20 year. The GST credit will be increased $400 for individuals and $600 for couples. Individuals who don’t qualify for employment insurance but are required to stay home and not work because of COVID-19, including caring for a child out of school or a loved on who gets sick, can apply for $900 every two weeks in income support.
Economic growth in Canada and around the world, already sluggish before the outbreak, has slowed to a crawl, with many economists predicting a global recession.