Canada’s COVID-19 economic relief: What immigrants need to know

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The COVID-19 pandemic has upended the entire world as we know it, and we expect to feel the social and economic impact for years to come. The Canadian government is hard at work to ensure that all Canadian residents will receive some economic relief as we navigate these trying times. 

 

We have researched the various COVID-19 economic relief programs and summarized, which benefits apply to immigrants living in Canada. For aspiring immigrants in the process of relocating to Canada, see our blog post on Top 5 immigration updates you should know for 2020.

Table of Contents

Canada Emergency Response Benefit

 Prime Minister Justin Trudeau introduced the Canadian Emergency Response Benefit (CERB) in response to the needs of workers and self-employed individuals who have lost the source of income due to the COVID-19 pandemic. CERB was announced as a more comprehensive aid package to replace the Emergency Care Benefit and Emergency Support Benefit. Canada Revenue Agency (CRA) and Service Canada will jointly administer CERB.  

CERB will provide $500 a week for up to 16 weeks to support:

  • People facing unemployment
  • People who are sick, quarantined, or in directed self-isolation
  • People who are unable to work
  • Seniors

Immigrants who meet the eligibility criteria can apply for the CERB, which opened on Monday, April 6. 

  • Residing in Canada and at least 15 years old
  • Stopped working due to COVID-19 without having voluntarily quit their job or eligible for EI or sickness benefits;
  • Had an income of at least $5000 in 2019 or in the 12 months before the date of their application
  • Are currently or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four week period

To get started, you will be asked to answer a few survey questions. You can either apply online or automated phone service 1-800-959-2019 or 1-800-959-204. Visit canada.ca on how to apply.

Families

Increasing the Canada Child Benefit (CCB). 

The CCB is a monthly benefit that given to all Canadian residents who meet the following criteria:

  • Living with a child under 18 years of age
  • Primarily responsible for the care and upbringing of the child
  • A resident of Canada for tax purposes
  • All persons that are any of the following:
    •  a Canadian citizen, permanent resident, a protected person, a temporary resident who has been living in Canada for 18 months with a valid permit, and an indigenous person under the Indian Act. 

The Canadian government will be providing an extra $300 per child through the CCB for 2019-20. This increase would add approximately $550 more for the average family.

Immigrants who are already receiving CCB need not reapply. However, if you meet the above eligibility criteria and have not had a chance to apply, you can apply through the CRA website.

Extended tax filing deadline

The 2019 filing due date for income tax returns for individuals has been extended to June 1, 2020, and any income tax balances due have also been extended to August 31, 2020, without any penalties. 

The CRA is encouraging people who expect to receive benefits under the Goods and Services tax credit or the Canada Child Benefit to file their tax returns as soon as they can to ensure your entitlements are quickly determined. The earlier you file your tax return, the quicker you will receive your identified benefits. 

Special Goods and Services Tax credit payment

Starting on April 9, the CRA will provide a one-time special payment through the Goods and Services Tax credit for low and modest-income families. On average, the additional benefit will be approximately $400 for single individuals and $600 for couples.

This payment does not require a separate application and will be paid automatically to eligible people. 

Mortgage support

Immigrants with mortgages can expect mortgage relief through their Canadian banks on a case by case basis. Consult your bank’s dedicated COVID-19 page to learn more about the measures your bank will be instituting. Most of the large banks announced as early as March 17 that they will provide financial relief to Canadians severely impacted by the economic consequences of the COVID-19 pandemic. 

Scotiabank has created an application for a 6-month mortgage payment deferral. This deferral applies to families with insured or uninsured mortgages with the bank who have become unemployed or are experiencing a material reduction in income due to COVID-19. The advantage of this relief is that it will not require a credit check or impact a person’s credit score.

 BMO has created a Financial Relief Program for homeowners and investment property owners who have a mortgage with their bank to defer up to six months of their mortgage principal and interest payments. To qualify for this relief program, your mortgage must be in good standing. 

The Canadian Mortgage and Housing Corporate and other mortgage insurers have also created tools for lenders to help homeowners navigate through their financial difficulties. 

Students and recent graduates

Students with federal loans will automatically have their loan repayments and interests suspended until September 30, 2020. Students with provincial or territorial portions of loans will need to check with their loan providers to determine if there are any relief measures.

Most international students on student permits are not eligible for provincial or federal loans, and usually have loans with private banks or financial institutions.

Prodigy Finance is a popular financial organization that provides student loans to international students. They created a COVID-19 Resource Center and are asking students whose ability to make scheduled loan payments to contact them directly at [email protected].

Scotiabank and other Canadian banks have created COVID-19 relief pages to encourage those affected to enroll for direct deposit to receive the CERB payment quicker, request financial relief for credit card payments and other forms of financial assistance. Be sure to visit your bank’s website for updates on how you can apply for relief if you are a student. 

Businesses 

The Canadian government announced several relief measures to ensure that business owners and self-employed individuals:

  • Minimize layoffs and rehire employees
  • Lower and defer payments
  • Quickly access credit
  • Maintain financial stability

A Statistics Canada study published April 24, 2019, showed that immigrant-owned businesses in Canada created more jobs than those owned by native Canadians. Immigrants owned approximately 17% of the companies featured in the study.

Immigrants also tend to be self-employed compared to their Canadian born counterparts. Thus many immigrants would greatly benefit from the programs listed below. 

Canada Emergency Wage Subsidy

This proposed subsidy would cover 75% of salaries for businesses that qualify for up to 3 months, retroactive to March 15, 2020. All size businesses, except for public sector organizations, are eligible to apply. Companies can use the CRA portal to apply. 

The eligibility criteria for this subsidy is for all employers who experience at least a 30% decline in revenue during the eligible periods. For nonprofits and charitable organizations, the government will work with them to define an appropriate calculation of revenue.

The 75% wage subsidy will be capped at $847/week. Learn more about the eligible periods and other details of this subsidy on canada.ca. 

Canada Emergency Business Account

This new account will provide interest-free loans of up to $40,000 to small businesses and not-for-profit organizations, to cover their operating expenses for the periods with reduced revenues. To qualify for this, organizations must prove that in 2019 they paid between $50,000 and $1 million in total payroll. The programs roll out in mid-April and will be implemented through the financial institutions.  

Extending the Work Sharing program

The Work Sharing Program has been extended from 38 weeks to 76 weeks for employers directly affected by COVID-19. This measure provides income support to employees eligible for Employment Insurance who reduce their working hours because of circumstances beyond the control of their employers.

The government has made adjustments to this program which include:

  • Extending the duration
  • Waiving the mandatory cooling-off period
  • Reduce previous requirements for a Recovery Plan
  • Reduce the requirements and expand eligibility to employers
  • Expand eligibility for staff essential to recovery and other employers

Originally immigrant-owned businesses eligible for this program must:

  • Be a year-round business in Canada for a minimum of 1 year
  • Be a private or publicly held business or
  • Have a minimum of 2 employees in the WS unit

Currently, the program’s eligibility has been extended to public corporations and not-for-profit employers experiencing a reduction of business activity and or a reduction in revenue due to COVID-19. 

Reduced and deferred payments

The CRA is allowing businesses to defer income taxes owing on or after March 18 and before September 2020 until after August 31, 2020. This deferral applies to tax balances due and installments under Part I of the Income Tax Act. No businesses will incur interest or penalties on these amounts during the extension period. 

Additionally, businesses and self-employed individuals can defer GST/HST and custom duty payments until June 30, 2020. GST/HST payments owing from March 27 until the end of May can be deferred until June. GST and custom duty payments for imported goods owing for March, April and May can be deferred until June. 

Business Credit Availability Program

The BCAP will provide $40 billion of increased support through the Business Development Bank of Canada(BDC) and the Export Development Canada (EDC). The BDC and EDC will work closely with private-sector lenders to provide credit solutions for individual businesses in various industries such as oil and gas, air transportation, exports and tourism. 

The program includes:

  • Loan Guarantee for Small and Medium-Sized Enterprises of up to $6.25 million
  • Co-Lending Program for Small and Medium-Sized Enterprises

These programs will be rolled out in mid-April and businesses are encouraged to work directly with financial institutions. 

Insured Mortgage Purchase Program

This program was launched to purchase up to $150 billion of insured mortgage pools through the Canada Mortgage and Housing Corporation to provide long-term funding to banks and mortgage lenders. The program will ensure continued lending and add liquidity to the mortgage market for Canadian consumers and businesses. 

Support for Industries

If you are currently working in particular industries, there is also industry-specific support available such as:

  • Farm Credit Canada to provide an additional $5 billion in lending to producers, agribusiness and food processors.
  • The government will waive ground lease rents from March 2020 to December 2020 for the 21 airport authorities that pay rent to the federal government. 
  • The Canadian Radio-television and Telecommunications Commission (CRTC) will waive request for payment for Part I license fees by broadcasters for the 2020-21 fiscal year. 

Provincial and Territorial specific measures

Provincial and territorial governments are providing relief at their level, and if you live in the following provinces, you should check out their pages:

 Canada’s COVID-19 Economic Response Plan page is the primary source for the majority of the research in this post. We strongly encourage you to verify all the information at the relevant program sites. 

The Canadian government has described these measures as the first wave of economic relief, and we expect further stimulus packages to follow in the coming weeks. We will keep updating this post as we learn more.