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 Bill Morneau

COVID-19 relief bill gets royal assent; wage subsidies boosted to $52 billion from $27 billion

Wednesday, March 25, 2020 @ 10:40 AM | By Cristin Schmitz

Last Updated: Wednesday, March 25, 2020 @ 4:38 PM


After hours of negotiations between the Trudeau government and opposition parties, the House of Commons and Senate passed on March 25 (with significant changes from its initial draft form) the COVID-19 Emergency Response Act.

Notably, Bill C-13 will replace the Emergency Care Benefit and Emergency Support Benefit announced by the government last week with a single “simpler and more accessible” support, according to the government. The Canada Emergency Response Benefit (CERB) — which is a taxable benefit — would provide $2,000 a month for up to four months to workers who lose their income as a result of the COVID-19 pandemic. The CERB would cover Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures, according to a government statement. The CERB would apply to wage earners, as well as to contract workers and self-employed individuals who would not otherwise be eligible for employment insurance (EI).

As well, workers who are still employed, but are not receiving income because of disruptions to their work situation due to COVID-19, would also qualify for the CERB. “This would help businesses keep their employees as they navigate these difficult times, while ensuring they preserve the ability to quickly resume operations as soon as it becomes possible,” the government said.

The government said the EI system was not designed to process the unprecedented high volume of applications received in the past week. “Given this situation, all Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not, would be able to receive the CERB to ensure they have timely access to the income support they need,” says the government’s press release. “Canadians who are already receiving EI regular and sickness benefits as of today would continue to receive their benefits and should not apply to the CERB. If their EI benefits end before October 3, 2020, they could apply for the CERB once their EI benefits cease, if they are unable to return to work due to COVID-19,” the government specifies.

Canadians who have already applied for EI, and whose application has not yet been processed would not need to reapply. Canadians who are eligible for EI regular and sickness benefits would still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.

The government said it is working to get money to Canadians as quickly as possible, with the portal to accessing the CERB to be up and running “in early April.” EI-eligible Canadians who have lost their job can continue to apply for EI here, as can Canadians applying for other EI benefits.

The government said Canadians “would begin to receive their CERB payments within 10 days of application. The CERB would be paid every four weeks, and be available from March 15, 2020 until October 3, 2020.”

In a news conference in Ottawa March 25, federal Finance Minister Bill Morneau told reporters the government is targeting April 6 to get the online application process ready to go.

He revealed that the wage subsidy will boost the $27 billion in direct support to workers that his government proposed last week to $52 billion (on top of the already-announced $55 billion in tax deferrals until Aug 31, 2020) — for a total initial COVID-19 federal relief package of $107 billion. “The idea is that we’re going to deliver for every Canadian that finds themselves in a situation where they’ve earned revenue in the past 12 months of $5,000 or more, and they don’t have an income as a result of COVID-19,” Morneau explained. “What we’re doing is ensuring that we enable people to bridge through this fairly difficult time, so they have the resources they need for themselves and their families. We designed this in a way so that it’s a wage subsidy delivered directly to employees, to people. So what this means is that for an employer, they will not have to separate the employment of their employee from their organization, so in that way we’re directly supporting employers. They will just be in a situation where this employee is no longer receiving income from their company. They can in fact be guaranteed that this employee will be able to apply in a simple way, and get access to $2,000 per month for four months. That is, we think, critically important.”

Morneau said “we’re targeting the week of April 6 for us to be able to deliver on this for people.”

In order to obtain the unanimous agreement of the opposition parties for quick passage of the COVID-19 federal relief package in the Commons, the minority government agreed to several transparency and accountability measures in the coming months, including that:

  • Starting the week of March 30, the Minister of Finance or his delegate must provide the Commons Standing Committee on Finance with a biweekly report on all actions undertaken pursuant to parts 3 and 8 of the COVID-19 Emergency Response Act and shall appear before the committee to discuss the report, provided that, until April 20, (the date on which the Commons is scheduled to resume), or any date to which the adjournment period is extended … if the committee is not satisfied with how the government is exercising its powers under the Act, it may adopt a motion during a meeting by videoconference or teleconference to report this to the House by depositing a report with the Clerk of the House;
  • The Standing Committee on Finance be instructed to start a review of the provisions and operation of the COVID-19 Emergency Response Act within six months of the day on which Bill C-13 receives royal assent, and to report its findings to the Commons no later than March 31, 2021;
  • Within 30 sitting days of the resumption of regular sittings of the House, the government table a comprehensive report of all activities undertaken pursuant to the COVID-19 Emergency Response Act and that this report be permanently referred to the Commons Standing Committee on Finance; and
  • The Commons calls on the government to provide regular updates to representatives of opposition parties on its management of the COVID-19 pandemic, including a biweekly conference call between the finance critics of recognized parties and the Minister of Finance.

See Bill C-13’s provisions, as described in the summary in the bill, below:

Finance Minister Bill Morneau

Part 1 implements, as part of the response to the corona virus 2019, certain income tax measures by (a) introducing a one-time additional payment under the GST/HST tax credit; (b) providing temporary additional amounts under the Canada Child Benefit; (c) reducing required minimal withdrawals from registered retirement income funds by 25 per cent for 2020; and (d) providing eligible small employers a temporary wage subsidy for a period of three months.

Part 2 enacts the Canada Emergency Response Benefit Act to authorize the making of income support payments to workers who suffer a loss of income for reasons related to the corona virus 2019. Part three enacts the Public Health Events of National Concern Payments Act, which authorizes payments to be made out of the Consolidated Revenue Fund in relation to public health events of national concern. It also provides for the repeal of the Act on September 30, 2020. Part 4 amends the Canada Deposit Insurance Corporation Act to allow the Minister of Finance to increase the deposit insurance coverage limit until September 30, 2020. Part 5 amends the Canada Mortgage and Housing Corporation Act to authorize the Minister of Finance, with the approval of the Governor in Council, to make payments to the Canada Mortgage and Housing Corporation out of the Consolidated Revenue Fund for the purpose of increasing the CMHC’s capital.

Part 6 amends the Export Development Act to broaden the purposes for which Export Development Canada is established and to permit the Minister of Finance, until September 30, 2020, to determine the amount of Export Development Canada’s authorized capital as well as the amount of certain limits applicable to Export Development Canada. It broadens the transactions for which the Minister of International Trade, with the concurrence of the Minister of Finance, may grant an authorization. It also provides for the suspension of certain provisions of the Export Development Canada Exercise of Certain Powers Regulations.

Part seven amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to the provinces and territories for the fiscal year beginning on April 1, 2019. Part 8 amends Part IV of the Financial Administration Act to authorize the Minister of Finance, until September 30, 2020, to borrow money under that Act for certain payments without the authorization of the Governor in Council, and it also amends that Part to extend the time for the tabling of the report on that Minister’s plans in relation to the management of the public debt. It also amends Part IV.1 of that Act to authorize that Minister to make payments to an entity and to procure the incorporation of a corporation or establish an entity, other than a corporation, for the purposes of promoting the stability or maintaining the efficiency of the financial system in Canada. Finally, it makes related amendments to the Borrowing Authority Act and a consequential amendment to the Canada Deposit Insurance Corporation Act.

Part 9 amends the Food and Drugs Act to, among other things, authorize the Governor in Council to make regulations (a) requiring persons to provide information to the Minister of Health; and (b) preventing shortages of therapeutic products in Canada or alleviating those shortages or their effects, in order to protect human health. Part 10 amends the Canada Labour Code to, among other things, create a regime which provides for a leave related to COVID-19 of up to 16 weeks. It also amends that Act to provide for the repeal of that regime and to provide for a quarantine leave under the medical leave regime. Part 11 amends the National Housing Act to increase, for a period of five years, the maximum total for the outstanding insured amounts of all insured loans.

Part 12 amends the Patent Act to, among other things, provide that the Commissioner must, on the application of the Minister of Health, authorize the government of Canada and any person specified in the application to make, construct, use and sell a patented invention to the extent necessary to respond to a public health emergency that is a matter of national concern. Part 13 amends the Canada Student Loans Act to provide that, during the period that begins on March 30, 2020 and ends on September 30, 2020, no interest is payable by a borrower on a guaranteed student loan and no amount on account of principal or interest is required to be paid by the borrower. Part 14 amends the Farm Credit Canada Act to authorize the Minister of Finance to determine the limit on the amounts that the Minister of Finance may pay to Farm Credit Canada out of the Consolidated Revenue Fund.

Part 15 amends the Canada Student Financial Assistance Act to provide that, during the period that begins on March 30, 2020 and ends on September 30, 2020, no interest is payable by a borrower on a student loan and no amount on account of principal or interest is required to be paid by the borrower.

Part 16 amends the Business Development Bank of Canada Act to authorize the Minister of Finance to determine the limit on the aggregate of the paid-in capital — and any related contributed surplus — of the Business Development Bank and any proceeds prescribed as equity.

Part 17 amends the Apprentice Loans Act to provide that, during the period that begins on March 30, 2020 and ends on September 30, 2020, no interest is payable by a borrower on an apprentice loan and no amount on account of principal or interest is required to be paid by a borrower.

Division 1 of Part 18 amends the Employment Insurance Act to give the Minister of Employment and Social Development the power to make interim orders for the purpose of mitigating the economic effects of COVID-19.

Division 2 of Part 18 provides that every reference in any provision of the Employment Insurance Act and of regulations made under it to a certificate issued by a medical doctor or other medical professional or medical practitioner or by a nurse practitioner is deemed to be of no effect and that any benefit that would have been payable to a claimant had such a certificate been issued is payable to the claimant if the Canada Employment Insurance Commission is satisfied that the claimant is entitled to the benefit.

Note: The headline in the story has been updated to reflect that wage subsidies were boosted to $52 billion.

If you have any information, story ideas or news tips for The Lawyer’s Daily please contact Cristin Schmitz at Cristin.Schmitz@lexisnexis.ca or at 613-820-2794.