Federal Government Support for Industry During COVID-19

Last week the Prime Minister of Canada announced a stimulus package of up to $82 billion to help mitigate the impact of COVID-19 on individuals and businesses in Canada. There was $27 billion in direct support and $55 billion in additional liquidity to help stabilize the economy in uncertain times. They have said more will be provided as needed in the coming weeks. The measures announced include increases to social benefit payments, income tax payment deferrals and payroll subsidies.

The Prime Minister was very clear that these measures are not exhaustive and more initiatives will follow and likely more financial support.  Over the weekend many business organizations have suggested that the $25,000 support for business continuity will not be sufficient given that some countries have agreed to 75 percent of the costs for business continuity. CPCA will continue to provide specific details on support initiatives as more details are provided in the coming weeks as the federal Government determines the most expeditious ways to flow necessary funding to those in need.  The goal is to ensure business and their employees can stay in place and resume more normal business operations when the economy is up and running at full potential.

CPCA continues to monitor the ongoing government-related actions to assist industry in meeting demands such as employee retention and support to help access to funding under new and relaxed EI eligibility requirements. CPCA joined with other industry associations over a week ago via the Canadian Manufacturers Coalition to strongly support economic measures to soften the blow on industry with respect to COVID-19 fallout and to ensure business continuity and worker retention as the biggest part of that effort.

While non-essential travel restrictions have been imposed at the Canada-US border, there are several States where certain items such as empty paint can shipments from Pennsylvania to Canada, and possible other inputs, have been impacted for some CPCA member companies. CPCA has been in discussions with our colleagues at the ACA in the United States who are aware of this matter and have been in direct contact with the Governor’s office to address this concern. CPCA is asking all members to please inform the association of any other challenges in this regard so that we can take any action needed to raise awareness. As you would expect, we are limited in what we can do this side of the border on matters on the other side, but CPCA will do all it can at the federal level in Canada, and in Provinces where needed, to support the actions taken by ACA with various States.

The following support programs were mentioned in the Prime Minister’s address. Some of these initiatives may help alleviate the pressure companies may experience from employee support and business continuity perspective.

• Support programs for workers – Emergency Care Benefit, Emergency Support Benefit
• Temporary Canada Child Benefit increase
• GST relief
• Moratorium on repayment of student loans
• Doubling the funding of the Reaching Home program for homeless individuals
• Increased funding for shelters
• An Indigenous community support fund
• Extended deadline for those who have a CRA payment
• Business supports including tax deferrals and wage subsidy

(See full details below)

The ongoing spread of COVID-19 will have wide-ranging effects on all industry sectors, paint and coatings included. CPCA wants to take any and all measures we can to ensure that our members’ ability to comply with regulations and operate normal as possible and/or take advantage of government assistance to bridge from this crisis to more business as usual times in the weeks ahead. We ask all members to provide CPCA with answers to the following two questions:

1. Are you experiencing any issues related to staffing shortages, limited production environments, supply chain disruptions etc., that threaten your organization’s ability to meet upcoming regulatory compliance deadlines or market challenges?
2. As a result of the current situation, are there any upcoming regulatory deadlines that you would like to see extended in order to provide your organization with more time to comply?

Please provide your answers to CPCA by Friday, April 3rd, 2020. Your feedback will be used to focus our advocacy efforts on issues that may be most impacted by the uncertainties of the current pandemic being faced by all countries.

Should members require anything else on which CPCA can assist please contact us at your convenience.

Regards,
  
Gary LeRoux
President & CEO

Details of Federal Support Measures

Essential travel will continue, including preserving and maintaining supply chains. Federal Actions to Date Include:

Businesses

• Temporary Wage Subsidy: Proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% 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. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
• Income Tax Deferral: Allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
• Audit Deferral: The Canada Revenue Agency will not contact any small or medium sized businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.
• Augment credit available to farmers and agri-food sector through Farm Credit Canada.
• Flexibility on the Canada Account limit, to allow Government to provide additional support to Canadian businesses—through loans, guarantees, or insurance policies. The Canada Account is administered by Export Development Canada and is used by the government to support exporters when deemed to be in the national interest, to deal with exceptional circumstances.

Previously Announced

Additional Credit to SMEs: An additional $10 billion of credit support mainly targeted to small and medium-sized businesses via Business Development Canada (BDC) and Export Development Canada (EDC).

• Launch an Insured Mortgage Purchase Program: Under this program, the government will purchase up to $50 billion of insured mortgage pools through the Canada Mortgage and Housing Corporation (CMHC). As announced on March 16, this will provide stable funding to banks and mortgage lenders and support continued lending to Canadian businesses and consumers. CMHC stands ready to further support liquidity and the stability of the financial markets through its mortgage funding programs as necessary. The Government will enable these measures by raising CMHC’s legislative limits to guarantee securities and insure mortgages by $150 billion each.
• Help Banks augment lending into economy: The Office of the Superintendent of Financial Institutions (OSFI) announced it is lowering the Domestic Stability Buffer by 1.25% of risk-weighted assets, effective immediately. This action will allow Canada’s large banks to inject $300 billion of additional lending into the economy.
• Workers

EI Sickness Benefit: Waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure is in effect as of March 15, 2020.

• Waiving the requirement to provide a medical certificate to access EI sickness benefits.

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 qualify 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.

Emergency Support Benefit: Provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment.

Registered Retirement Income Funds Change: Reducing the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors’ retirement savings. This will provide flexibility to seniors that are concerned that they may be required to liquidate their RRIF assets to meet minimum withdrawal requirements. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.

Income Tax Deferral: Allow all individuals to defer, until after June 1, 2020 the filing of tax returns and allow taxpayers to defer payment of income tax amounts owing until August 31, 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.

Boosting Child Benefit Payments: Increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child. The overall increase for families receiving CCB will be approximately $550 on average; these families will receive an extra $300 per child as part of their May payment.

Increasing Goods and Services Tax Credit: Double the maximum annual Goods and Services Tax credit (GSTC) payment amounts for the 2019-20 benefit year with a one-time special payment in early May 2020.

Recovery & Longer-term Measures

Minister Morneau said there will be more to come. He said: “This is only the first step in the plan. When the time is right, we will announce more long-term investments to assist with recovery and help Canadians get back to their daily lives.”  The window for that longer-term thinking isn’t closed, rather, with the announcement today to address immediate needs, once the rollout of funding and lending measures cycle closes, there will be ample opportunity to start having recovery and longer-term measures conversations.