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COVID-19 Canada: Promises of Money and The Path Takes Before You Get It

In Canadian politics, COVID-19, Epidemic on March 25, 2020 at 1:03 pm

From Justin Trudeau’s Announcement to Actual People’s Bank Accounts in Canada

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Here’s the lowdown, with linked sources and the simplest explanation possible.

Since the coronavirus began to take hold in Canada, the government has been meeting and trying very hard to sort out a plan for slowing the spread of the virus.

Just as Italy’s numbers began to skyrocket, Sophie Trudeau tested positive for the virus. As recommended by health officials, she, her husband Justin and their children went into self-isolation at home.

Sophie’s husband Justin Trudeau, is the Prime Minister of Canada and affectionately known as JT. He went to work from home along with many other Canadians. During this time, he held almost daily pressers from his front porch. We have all seen him out there regularly addressing Canadians through the media. He’s been saying a lot of stuff about the virus and social distancing. As things started to escalate, he spoke of travel restrictions and urged Canadians to return home and self-isolate. He offered them money they could access through email if they found themselves stranded away from home. He eventually, closed the Candian borders including the border between the U.S. and Canada.

These pressers were peppered with money announcements and government jargon and a special thank you to the children of Canada for trusting in science and helping their parents work from home.  All very nice.

JT announced a huge economic aid package for businesses and individuals over several days in the past couple of weeks. It included billions in federal guarantees on loans through the BDC (Business Development Bank of Canada) with a specific 50 billion earmarked for small and medium-sized businesses.

With that announcement, the Government had hoped to encourage as many companies to keep employees on the payroll and allow them to work from home or wait until work can begin after the COVID-19 crisis comes to an end.

People were laid off anyway.  No one has received any of this promised money yet.

Then they announced a plan to get money to Canadians through the Employment Insurance system. Anyone with enough hours to qualify should simply apply and those who have been working but do not qualify would be able to get E.I anyway.

500,000 Canadians applied for E.I. in the first week and the system is now overloaded. Money that Canadians can use is still delayed.

The Government spoke directly with banks regarding mortgages and then announced that they had negotiated with the 6 big banks in Canada and got them to agree to mortgage deferrals up to 6 months for homeowners.  The idea being, that if homeowners didn’t have to make the mortgage payments, they wouldn’t need to get rent from tenants until the crisis was over.

Of course, banks fucked it by tying in very unfavourable conditions. Homeowners quickly discovered that the banks would only defer the principal amounts, everyone would still need to pay the interest portion and then at the end of the deferral period, would be required to make larger payments. Very few takers on that one.

The Government of Canada is trying to get money to Canadians before April 1. They tried to pass a bill yesterday that would have given new temporary powers to the government to make decisions during the COVID-19 Crisis.  On March 24, it did not pass unanimously as needed. Some MPs claimed the Liberals were trying to take advantage of the crisis.

There are 3 main takeaways from that bill.

  1. The Government would have been able to make quick spending decisions.
  2. The Government could make very quick decisions on borrowing
  3. The Government could make quick decisions on taxes.

It would have allowed them to bypass parliamentary procedures for certain decisions. Questions would be put to committee instead of 1st, 2nd and 3rd readings all with debates and a vote to send it up to be put on the Senate agenda. Depending on what it is and how it goes, that process can take weeks, months or years start to finish. The new powers were to remain in place until March 2021.

The government MPs stayed all night to debate the new bill again and did come to an agreement first thing in the morning.

Under the new version of the agreement, the government’s emergency powers will remain in place until September 2020 instead of March 2021.

Here’s what it looks like for Canadians:

  1. $2000/month for Canadians who are off work, due to the COVID-19.
  2. A temporary boost to Canada Child Benefits.
  3. Up to $900 biweekly for workers who don’t qualify for E.I., or are self-employed. Through the CRA.
  4. A six-month, interest-free reprieve on student loan payments.
  5. Double resources for the homeless.
  6. Tax filing extension to June 1 and deferred tax payments.
  7. $305 million for a new Indigenous Community Support Fund to address immediate needs in First Nations, Inuit and Métis Nation communities.

As soon as the bill passed the House this morning, Finance Minister Bill Morneau spoke to a Senate Committee of the Whole.

The way this is went down is a perfect example of why the government needs this bill so badly during this time of unprecedented crisis. Remember, this is as fast as it can possibly happen. I listened to the broadcast so you don’t have to.

Morneau presents the bill and speaks to it and says individuals need money in the next hours to buy groceries etc.

Here are some highlights of this morning’s questions from senators.

Senator: Will the Government of Canada pressure airlines to give refunds for travel because many had trips planned and then had to cancel them. He went on at length about airline websites and the drop-down menu of options such as ‘cancel my trip’, ‘travel at a later date’ and because it was easier, many chose ‘travel at a later date’. Those people received an airline travel voucher instead of money. Wouldn’t it be better for the Canadian Government to speak to those airlines and convince them to turn those travel vouchers into a refund and put the money back onto people’s cards?

Morneau didn’t really answer that one, because truly how would he and it’s a pretty stupid question. It sounded like this guy had a trip planned and had to take a travel voucher. No one feels sorry for you.

Senator: Canadian banks are wealthy and healthy. Blah, blah blah blah Canadian banks are great.

No real answer to that either. Like, OK, buddy. That’s great. Thanks.

Senator: Will the government of Canada provide money to the oil and gas sector? Why did the Government choose to use the Employment Insurance system because it is the worst approach because so many Canadians are not on the registry and now the system is overloaded? Why didn’t we subsidize wages instead?

Morneau had already said this bill is to subsidize small and medium-sized businesses. The government is not worried as much about big companies who have existing relationships and available credit with their banks.

Senator: Why doesn’t the government want to fund thousands of companies to keep people on the payroll as opposed to funding millions of Canadians? It would be so much easier. Then the employer/employee relationships could be maintained.

Morneau disagrees. Says the government wants to send money directly to Canadians – no need to break employer/employee relationship. His government wants to offer benefits directly to people. He goes on to say it is ‘important for people to receive direct benefits’.

Senator: I’ve been speaking to accountants and they have been issuing work cessation statements. That breaks the relationship due to layoffs.

Morneau answers him saying we changed our approach if employees find themselves with no income, they have access and it is not necessary to be laid off.

Senator Pate asks what steps will the government take to ensure a Guaranteed                     Livable Anual Income.

Morneau responds that there are lots of gaps, that’s why this bill is to address that and make sure we get money to people who are impacted by this crisis.  Guaranteed Annual Income is a separate issue that needs debate. Says he is talking about ‘right now.’ There is no time because Canadians need money for food and rent in the short term. April 1 is around the corner. We need to deal with it right now, not be dragged into a debate about Guaranteed Annual Income. It will have to wait until later. Right now, we are seeking extensive powers because of where we’re at.

Senator: Has the gov’t considered using CRA system to direct deposit into people’s bank accounts?

Morneau: We are trying to use CRA system and others to direct deposit. 70% of Canadians have direct deposit already, but some people will still need cheques. We are trying to get things done that are urgent while people are being asked to stay home.

After a mere 2 hours of questions, the bill passed the Senate. That was only possible because the Senate suspended all other business to deal with the COVID-19 bailout bill. It now awaits Royal Assent.

Royal Assent has been given. All systems go.

 

 

 

 

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