OTTAWA — Parliament is set to be called back for another emergency sitting to consider a multi-billion dollar expansion of COVID-19 financial relief measures, as Prime Minister Justin Trudeau reiterates the reality that Canada could be in a months-long fight against the virus.
Trudeau called the wage subsidy expansion unveiled Monday the biggest economic program in Canadian history, and that’s why he thinks Parliament should be reconvened to approve it, although the reminder is also necessary because it goes beyond what was included in the legislation adopted last time. the week.
On Monday, Trudeau announced that any Canadian business that has seen its revenue decline by 30% or more due to the pandemic will be eligible for a 75% wage subsidy, regardless of the number of employees it has. This announcement was a significant increase to the initial 10% wage subsidy for small and medium-sized businesses, announced the previous week.
On Wednesday afternoon, Finance Minister Bill Morneau gave more details about the plan and put an estimated price tag of $71 billion on it.
The combined direct economic measures and tax deferrals announced to date total $190 billion.
“These are very, very significant expenses,” Morneau said.
In an interview on CTV’s Power Play, Morneau was asked why the original legislation was not worded in a way to allow for flexibility in the scope of the subsidy, he said what was passed last week was intended to get plans off the ground quickly, but the “dynamic” situation and size of the grant program means it is appropriate for all parties to meet again to review the update.
Of the nearly $200 billion, $105 billion was earmarked for financial assistance programs such as the wage subsidy, the top-up Canada Child Benefit and lower-cost funds targeted at vulnerable populations, while $85 billion dollars will come from the tax deferral of Canadians and businesses. Payments.
According to a background paper released by Finance Canada, an additional $570.2 billion is being freed up through various loan and credit guarantees, the majority of which are made available by banks, not the federal government.
Speaking of the actions taken by the federal and provincial governments, Trudeau said, “Canada has not seen this type of civic mobilization since World War II. These are the greatest economic measures of our lifetime, to defeat a threat to our health. »
“These historic measures will help Canadians stay home to defeat COVID-19, but the government cannot win this fight alone.
Trudeau asked the government House leader and the deputy prime minister to contact the other parties to discuss a return date, to which the official opposition has already indicated its openness, rather than signing what it has called a months-long “blank cheque” for the Liberals.
Outgoing Conservative Leader Andrew Scheer said Wednesday the expanded scale of the program would require an amendment to the $107 billion tax relief package that was fast-tracked in emergency legislation passed by the House and Senate last week .
“Having a government come forward with a bill a few days later to make an announcement that is not in line with its own legislation, and now this possible scenario where Parliament would have to be called back to fix its own mistakes does not encourage much trusted by Canadians right now,” Scheer said.
Also on CTV’s Power Play, Scheer said his caucus would travel to Ottawa to be “extremely vigilant” about the government’s legislative changes after a later draft of the initial aid package bill proposed to sweep new powers without parliamentary oversight until the end of 2021.
Deputy Prime Minister Chrystia Freeland was quizzed on what needed to be changed and, without giving details, said it was ‘appropriate’ for Parliament to play its part, given the ‘scale’ of the additional measures .
Aimed to help keep employees on staff, the emergency wage subsidy is backdated to March 15 and will be on the first $58,700 earned, or up to $847 per week per employee.
Trudeau stressed that companies will have to show that they are doing “everything they can” to pay the remaining 25% of their employees’ wages, or face stiff penalties.
Morneau said businesses will need to reapply each month, reaffirming that individuals, bars, restaurants and charities will also be eligible, unlike public bodies such as hospitals and public schools.
“Get ready to rehire people,” Morneau said, adding that the app will soon be available on the Canada Revenue Agency’s website, and the money should be available within three to six weeks. .
Despite the additional information about the massive program, questions remain about what will happen to start-ups and other businesses that cannot demonstrate a drop in revenue from 2019.
The Canadian Federation of Independent Business says there are design features and unanswered questions that could impact the program’s goal of reducing layoffs.
“The government has confirmed that companies will have to prove a 30% drop in their gross income on a monthly basis by comparing their income to the same period last year. For some companies with very tight profit margins, even a small drop in sales may necessitate a significant number of layoffs in order to reduce costs. New businesses, seasonal businesses and those that experienced a major event last year around this time would also find it difficult, if not impossible, to demonstrate the 30% downside figure,” said the President and CEO of CFIB, Dan Kelly, in a statement.
Other business groups have also expressed concern over the prospect that it will take up to six weeks for funds to become available.
“Many businesses that are not essential services have been operating with reduced staff or have been completely closed for almost three weeks. Now they are being asked to wait another six weeks before the funds become available. We know that many small businesses do not have enough cash reserves to wait,” Canadian Chamber of Commerce spokesperson Phil Taylor said in a statement.
NDP Leader Jagmeet Singh said on CTV’s Power Play that he agreed government aid benefits should be paid out more quickly because he had asked for a much larger wage subsidy since the initial government announcement. He said he would have supported it the last time the House met and that he is prepared to expedite the passage of anything that comes before the next sitting of the House of Commons if it helps. .
It remains to be seen how quickly MPs could be back on Parliament Hill, but House of Commons rules require 48 hours notice.
Updating Canadians on the federal government’s pandemic response plan, Trudeau confirmed that starting April 6, Canadians can apply for the Canada Emergency Response Benefit and get their money within 10 days or faster if they ask for direct deposit. But if they are willing to receive the new 75% wage subsidy, they cannot receive both.
“It’s one or the other,” Trudeau said.
Morneau said that because the wage subsidy is expanded, the cost of the emergency benefit will be lower.
The benefit comes as more than 2.1 million Canadians have applied for EI in the past two weeks, with less than half of claims processed at this point and more arriving daily.
Steps are being taken to sort out this backlog, and the government says anyone who has been approved for EI will automatically be enrolled in the new emergency benefit.
Employment Minister Carla Qualtrough called this an “unprecedented” volume of applications. In addition to reconfiguring the system to process and send benefits, retired civil servants have been called in to help.
“I want to thank all the public servants who have been working around the clock for weeks under strange and stressful circumstances to put these emergency programs in place,” Morneau said.
The government continues to indicate that more financial assistance will come to Canadians and affected sectors as the shutdown of many aspects of society continues, meaning the price will continue to rise.
TWO WEEKS OR TWO MONTHS?
In a new month, and after Toronto canceled all major events until the end of June, Trudeau indicated that the country would likely be asked to follow public health measures like physical distancing and subject to additional restrictions and to border closures for months, but it depends on how people act today.
Over the past few weeks, Trudeau has been faced with several questions about how long it will be before Canada emerges on the other side of the pandemic, and his response has always been some version of “weeks or months.” However, many of the financial relief measures being implemented are expected to be in effect until the summer.
“How we do it right now determines where our country will be in two weeks or two months,” Trudeau said, without giving details on what the internal projections are for the death rate from this disease in Canada.
The death toll is something other countries have discussed publicly, including the United States, where health officials believe the death toll could reach at least 100,000 people.
“We must all answer the call of duty. It is a service that most of us have never been called to do…. Listening to the rules of public health is your duty. Staying home is your way of serving, so be smart in what you do, in the choices you make, this is how you will serve your country and how we will all serve each other,” Trudeau said. .