The federal government is pulling the plug on several COVID-19 support programs starting Saturday, Deputy Prime Minister and Finance Minister Chrystia Freeland announced Thursday, as she reminded Canadians the measures were always meant to be temporary.
However, the government does have a “targeted” $7.4-billion plan in place to support new COVID-19 benefits for hard-hit businesses and employees going into spring.
Here’s a look at the new benefits and the ones that are set to expire.
What’s expiring?
Come Saturday, the rent subsidy and Lockdown Support that have helped more than 210,600 organizations with more than $6.8 billion in support for rent, mortgage and other expenses are going to expire, as will the wage subsidy that paid out more than $95 billion to date to help employers re-hire workers and avoid layoffs.
“Today, our support needs to be more narrow, more targeted and less expensive and we need to look forward to the day, now not too far off, when we will be able to bring it to an end entirely,” Freeland said at a news conference Thursday.
While new measures will be put in place, the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) will come to a halt on Oct. 23.
The Canada Recovery Benefit (CRB), formerly known as the Canada Emergency Response Benefit (CERB), will also expire and be replaced by a more targeted program called the Canada Worker Lockdown Benefit.
What’s new?
The Canada Worker Lockdown Benefit is a new measure is aimed at providing income support to employees who are unable to continue with work due to government-imposed local lockdowns — if any in the near future.
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“Our emergency support measures were always designed to be temporary to get us through the crisis,” Freeland told reporters. “We’re now in a new phase, one that is very different from the darkest days in our fight against COVID. We have recovered lost jobs.”
Freeland said temporary local lockdowns “are still a possibility in the months to come.”
“We want Canadians to know that we intend now to put in place a measure that would snap into action immediately to support workers in the event of a new local lockdown,” she said.
The new program will include a $300 per week benefit and will only be available to workers whose work disruption has been directly caused by a government-initiated public health lockdown. Starting Oct. 24, the program will run until May 7, 2022 and would be available during the entire period of lockdown called on by the government.
The benefit will be accessible to those ineligible for Employment Insurance (EI) as well as those eligible, provided the latter are not receiving payment through EI for the same period.
However, workers who have had a loss of income or employment due to their refusal to comply with a vaccine mandate would not be able to avail of the benefit.
A look at extended benefits
The Canada Recovery Hiring Program is being extended until May 7, 2022, with authority for a further extension through regulations until July 2, 2022.
The benefit is for employers with more than 10 per cent losses in current revenue. An increased subsidy rate of up to 50 per cent is also available.
There are two streams under this program: first, the Tourism and Hospitality Recovery Program that aims to provide wage and rent support to hotels, tour operators, travel agencies and restaurants, with a subsidy rate of up to 75 per cent. The second is the Hardest-Hit Business Recovery Program, which is intended to support other businesses that have incurred deep losses, with a subsidy rate of up to 50 per cent.
Those applying for these programs will need to pass through a two-key eligibility process. Applicants must be able to show significant revenue losses not only over the course of 12 months within the COVID-19 pandemic but also in the month they’re applying in.
However, in the event of new and temporary government-imposed shutdowns, businesses would be eligible for up to the maximum amount of wage and rent subsidy programs, irrespective of their situation during the pandemic.
The proposed subsidy rates would be available through to March 13, 2022, after which the rates will decrease by half until May 7, 2022.
Increased monthly cap on eligible expenses
Under the Canada Emergency Rent Subsidy, businesses have a monthly cap of $75,000 on eligible expenses that can be claimed per business location and $300,000 in total for all locations.
To support hard-hit sectors like hotels and restaurants, the government of Canada has now proposed to make legislative amendments to increase the aggregate monthly cap from $300,000 to $1 million, beginning Oct. 24.
Employers and organizations that meet the new eligibility requirements for the rent subsidy under the Tourism and Hospitality Recovery Program and the Hardest-Hit Business Recovery Program would be eligible for this.
Other programs being extended until summer 2022 include the Canada Recovery Caregiving Benefit and the Canada Recovery Sickness Benefit.
“Canadians across the country may need continued support from the Canada sickness benefit and the Canada caregiving benefit. We all need to protect ourselves and one another by staying home when we’re sick,” Freeland said during a news conference Thursday.
“So we intend to extend eligibility for both of these benefits until May 7 of next year and will increase the maximum duration of each benefit by two additional weeks.”
This means the caregiving benefit will now move from the previous 42 to 44 weeks and the sickness benefit from four to six weeks.
So far, the Canada Recovery Caregiving Benefit has provided $3.58 billion to 465,610 different applicants while the Canada Recovery Sickness Benefit has delivered more than $742 million to 698,970 unique claimants.
According to David Macdonald, a senior economist for the Canadian Centre for Policy Alternatives, as many as 1.5 million workers are set to be directly affected once those programs end — most of whom won’t have another source of income or support.
Of those one and a half million workers, about 900,000 would be set to lose support from the CRB being cut according to Macdonald. He said that the newly announced programs “don’t look like they will cover them anytime soon.”
As for the CERS and CEWS cuts, Macdonald estimates more than 640,000 workers’ jobs could be in jeopardy, though they would still be eligible for EI despite its lack of a $500-a-week floor.
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