Trudeau to recall Parliament to pass multibillion COVID-19 aid increase
OTTAWA -- Parliament is set to be recalled for another emergency sitting, to consider a multibillion-dollar expansion to COVID-19 financial assistance measures, as Prime Minister Justin Trudeau restates the reality that Canada could be in for a months-long fight against the virus.
Trudeau called the expansion to the wage subsidy unveiled on Monday the largest economic program in Canadian history, and that’s why he thinks Parliament should be reconvened to approve it, though the recall is also needed because it exceeds what was included in the legislation passed just last week.
On Monday, Trudeau announced that any Canadian businesses that have seen their revenue decrease by 30 per cent or more due to the pandemic will be eligible for a 75 per cent wage subsidy, regardless of the number of employees they have. This announcement was a major increase to the initial 10 per cent wage subsidy for small- and medium-sized businesses, announced the week prior.
Wednesday afternoon, Finance Minister Bill Morneau spelled out further details about the plan, and put an estimated price tag of $71 billion on it.
The combined direct economic measures and tax deferrals announced to date total $190 billion.
“These are very, very significant expenditures,” Morneau said.
In an interview on CTV’s Power Play Morneau was asked why the initial legislation was not worded in a way to allow flexibility in the scope of the subsidy, he said that what was passed last week was meant to get the plans rolling out the door quickly but the “dynamic” situation and size of the subsidy program mean it’s appropriate that all parties reconvene to scrutinize the update.
Of the nearly $200 billion, $105 billion has been earmarked for the financial aid programs like the wage subsidy, Canada Child Benefit top-up and smaller-ticket funds focused on vulnerable populations, while $85 billion will come from allowing Canadians and businesses to defer tax payments.
According to a background document released by Finance Canada, there is an additional $570.2 billion being freed up through various loan guarantees and credit, the majority of which is being made available by banks and not the federal government.
Speaking to the measures being taken both by federal and provincial governments, Trudeau said that: “Canada hasn’t seen this type of civic mobilization since the Second World War. These are the biggest economic measures in our lifetimes, to defeat a threat to our health.”
“These historic measures will support Canadians to stay home to defeat COVID-19, but the government alone cannot win this fight.”
Trudeau has asked the government house leader and deputy prime minister to reach out to the other parties to discuss a date to return, something the Official Opposition has already indicated openness to, rather than signing what it called a months-long “blank cheque” to the Liberals.
Outgoing Conservative Leader Andrew Scheer said Wednesday that the widened scale of the program would require an amendment to the $107-billion fiscal aid package that was fast-tracked in emergency legislation that passed the House and Senate last week.
“To have a government introduce a piece of legislation only days later to make an announcement that does not match their own legislation, and now this possible scenario where there'd have to recall Parliament to fix their own mistakes is not instilling a great deal of confidence in Canadians right now," Scheer said.
Also on CTV’s Power Play, Scheer said that his caucus will be heading to Ottawa to be “extra vigilant” about the government’s legislative amendments after a later-scrapped draft of the initial aid package bill proposed sweeping new powers absent of parliamentary oversight through to the end of 2021.
Deputy Prime Minister Chrystia Freeland was asked what needs to be changed, and without offering specifics said that it was “proper” to have parliament play its role, given the “magnitude” of the additional measures.
Aimed at helping keep employees on staff, the emergency wage subsidy is being back-dated to March 15 and will be on the first $58,700 earned, meaning up to $847 a week per employee.
Trudeau emphasized that businesses will need to show they are doing “everything they can” to pay the remaining 25 per cent of their employee’s wages, or face serious penalties.
Morneau said that businesses will need to reapply each month, restating that individuals, bars, restaurants, and charitable organizations will also be eligible, while public bodies like hospitals and public schools will not.
“Get ready to re-hire people,” Morneau said, adding that the application will soon be available on the Canada Revenue Agency website, with money set to be made available in between three and six weeks.
Despite the further information on the massive program, questions still remain about what will happen for start-ups and other businesses that can’t demonstrate a drop in revenue compared to 2019.
The Canadian Federation of Independent Business says there are design features and unanswered questions that could impact the program’s goal of reducing layoffs.
“Government has confirmed that businesses will be required to prove a 30 per cent drop in gross revenue on a month-by-month basis by comparing their revenues to the same time last year. For some firms with very tight profit margins, even a small drop in sales can require significant numbers of layoffs in order to lower costs. New businesses, seasonal businesses and those who experienced a major event last year at this time would also find it challenging or impossible to demonstrate the 30 per cent decline figure,” said CFIB President and CEO Dan Kelly in a statement.
Other business groups have also raised concern with the prospect of it taking up to six weeks for the funds to be available.
“Many businesses that are not essential services have been operating with skeleton staff or completely shut down for nearly three weeks. Today, they are being asked to wait an additional six weeks before funds are available. We know that many smaller businesses do not have enough cash reserves to wait,” said Canadian Chamber of Commerce spokesperson Phil Taylor in a statement.
NDP Leader Jagmeet Singh said on CTV’s Power Play that he agreed the government’s aid benefits should be getting out the door quicker, as he’d been pushing for a much larger wage subsidy since the initial announcement from the government. He said he would have supported it the last time the House met, and and he is willing to speed up the passage of whatever is presented at the coming sitting of the House of Commons if that’ll help.
It remains to be seen how quickly MPs could be back on Parliament Hill, but the House of Commons rules require a 48-hour head’s up.
'ONE OR THE OTHER'
Updating Canadians on the federal government’s response plan to the pandemic, Trudeau confirmed that starting April 6, Canadians can apply for the Canada Emergency Response Benefit and get their money within 10 days or faster if they apply for direct deposit. But if they are set to get the new 75 per cent wage subsidy, they cannot collect both.
“It’s one or the other,” Trudeau said.
Morneau said that because the wage subsidy is being expanded, the cost of the emergency benefit will be less.
This benefit comes as more than 2.1 million Canadians have applied for employment insurance within the last two weeks, with less than half of those processed at this point and more coming in daily.
Steps are being taken to sort through that backlog, and the government says that anyone who has been approved for EI will automatically be enrolled in the new emergency benefit.
Employment Minister Carla Qualtrough called this an “unprecedented” volume of requests. In addition to reconfiguring the system to process and send out the benefit, retired public servants have been brought back to help.
“I want to thank all the public servants who have been working at all hours for weeks now under strange and stressful circumstances to get these emergency programs up and running," Morneau said.
The government continues to indicate more financial assistance will come to Canadians and impacted sectors as the shutdown of many aspects of society continues, meaning the price tag will continue to grow.
TWO WEEKS OR TWO MONTHS?
Into a new month, and after Toronto cancelled all major events through to the end of June, Trudeau indicated that the country is likely going to be asked to follow public health measures like physical distancing and subject to additional restrictions and border closures for months, but that depends on how people act today.
Over the last few weeks, Trudeau has faced several questions about the time it’ll take before Canada comes out the other side of the pandemic, and his response has consistently been some version of “weeks or months.” Though, many of the financial assistance measures being implemented are slated to be in effect into the summer.
“How well we do this right now determines where our country will be in two weeks or two months,” Trudeau said, without offering specifics to the question of what internal projections are for the death rate due to this disease in Canada.
The number of fatalities is something other countries have discussed publicly, including the United States, where health officials estimate the death toll could reach at least 100,000 people.
“We all have to answer the call of duty. This is service that most of us have never been called upon to do…. Listening to public health rules is your duty. Staying home is your way to serve, so be smart about what you do, about the choices you make, that is how you’ll serve your country and how we’ll all serve each other,” Trudeau said.