COVID-19 Update - Federal Government Announces “Canada’s COVID-19 Economic Response Plan"

| 3 minutes

This morning, Prime Minister Justin Trudeau announced a new set of economic measures to assist Canadians as a result of the COVID-19 pandemic. These measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses.

Here are the key things employers need to know right now.

Helping Businesses Keep their Workers

The Federal Government is proposing additional supports for eligible small business/employers. In particular, employers who may benefit from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.

  • Businesses that are facing revenue losses and to assist in preventing layoffs, may be eligible for a temporary wage subsidy for a period of three months.
  • The subsidy will be equal to 10 per cent of 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.

Temporary Income Support for Workers and Parents

Canadians who do not have access to paid sick leave and who are sick, quarantined or forced to stay home to care for children, are provided with the following additional supports:

  • Waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits (as announced previously). This temporary measure is in effect as of March 15, 2020.
  • Waiving the requirement to provide a medical certificate to access EI sickness benefits.
  • Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to:
    • Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
    • Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not quality for EI sickness benefits.
    • Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.
  • Application for the Benefit will be available in April 2020, and require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility.

Longer-Term Income Support for Workers

The Government is providing additional support for Canadians who lose their jobs or face reduced hours as a result of COVID-19’s impact. These supports include:

  • Introducing an Emergency Support Benefit delivered through the CRA to provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment.
  • Implementing the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process (as announced previously).

We recognize that change resulting from COVID-19 is happening in real-time. When making decisions to protect your people and your business, we strongly recommend that you seek advice of counsel. Accordingly, our National Labour & Employment Group is available to assist clients on a 24/7 basis. If you need assistance, please reach out to any member of our team whenever you need to.

Please also regularly check our COVID-19 Hub for updates and additional information and insights.

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