In light of the pandemic caused by the coronavirus, the Canadian government announced an unprecedented economic package to help as many Canadians as possible during these turbulent times.
It is unprecedented, indeed. Even in during the Great Recession of 2008, the measures implemented were nowhere close to what we’re seeing now. This crisis was actually much more severe than the current one.
Many people -whether experts or not- are decreeing the world is in recession, but it’s actually too early to make that call. In economy, a recession is a temporary period during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
We’re not there yet, folks.
This pandemic is not going to last forever
Like all the ones we’ve had before -and we’ve had a few!-, it will stop at some point. It’s usually a matter of months or a little over a year, at most. Let’s look at the previous 2, most recent pandemics:
- H1N1: Apr 2009- Aug 2010
- SARS: Nov 2002-July 2003
As you can see, they didn’t last for years. Right now, China is at the tail end of the coronavirus pandemic. At the time of writing, this country hasn’t reported any new cases for the last couple of days.
Anyhow, let’s go back to the crux of this post:
Canadian personal finances
As I was saying above, the federal government announced a list of extended measures to help Canadians:
- Removal of the 1-week waiting period for all new EI claims
- Emergency Care benefit: for workers who don’t have paid sick days, don’t qualify for EI and have to stay home to care for their family or themselves -$450/week for up to 15 weeks-
- Emergency Support benefit: for anyone who doesn’t qualify for EI and lost their job or had to temporarily close their business -$450/week up to 15 weeks-
- Tax-filing deadline has been extended to June 30th, with payments to be made by Aug 31.
- Boost to the Canada Child Benefit, up to $ 300.
- Additional GST rebate, amount unknown at this stage
- 6-month moratorium on federal student loans
- Lower amount of mandatory withdrawals for RRIF holders
- Deferral of tax payments until Aug 31
- Wage subsidy: up to 10% of an employee’s pay, maximum 25K per employer
- Ease of borrowing through BDC and EDC
- CRA has also suspended its audits and re-assessments on businesses
Something for almost everyone
This has to be one the most comprehensive program I ever seen in Canada. It’s pretty extended.
However, many details are still blurry at this stage. We don’t know what will be required to qualify for these various programs. Both the Emergency Care and Support benefits are not available yet. Applications will open on April 1st.
It is also expected it will take a few weeks for claimants to actually start receiving money. That’s when an emergency fund comes in handy!
Unfortunately, our most vulnerable population is excluded from these announcements….It may fall on provincial governments to handle -and pay for- them.
Many banks, as well as CHMC, have also committed to helping people who may have difficulties with their mortgage payments. The details are also unknown and will probably be on a case-per-case basis.
We’re definitely not sure of how long this coronavirus will linger and the depth of its economic, health and social impact.
However, we will get through this, the same way we got through previous pandemics, economic turmoils and recessions. The world is not going to end! In the meantime, keep calm and carry-on…..