Michael J. Hanlon
Robin B. Schwill
1. Spending Measures (Budget Allocations)
The Canada Emergency Response Benefit (CERB): The CERB provides $2,000 per month for 4 months to Canadians who have lost their job, are sick, quarantined or taking care of someone who is sick, working parents who must stay home for their children, workers who are not receiving income because of work disruption, and business owners who have no business.
Childcare benefit: $300 per child of additional payments.
GST Credit: individuals and families with low and modest incomes receive a top-up payment ($300/adult, $150/child).
Government-Insured Mortgages: lenders permitted to defer mortgage payments for up to 6 months.
Revised Insured Mortgage Purchase Program: Government will purchase up to $50B of insured mortgage pools to provide stable funding to banks and mortgage lenders
Specific programs: Indigenous Peoples ($305M), women’s shelters and sexual abuse centers ($50M), Reaching Home - homelessness program ($157M)
ON allocates$3.3B for additional resources to health care system. $50M for development of essential equipment and supplies. $40 million to support organizations that provide residential services to vulnerable classes (children, women, people with disabilities). Support for Families initiative: one time $200 payment per child under 12.
QC allocates $500M budget for COVID-19 response costs, $133M in emergency funding for senior residences.
AB defers payment of electricity and natural gas charges for residential, farm and small commercial customers.
AB provides 6month relief from energy regulator levies ($113M). $60M additional funding for social agencies. $153M in emergency funding made available for COVID_19 response and aid to farmers.
2. Tax Measures (Deferral of Payroll Tax Obligations, Extensions of Tax Filing Deadlines)
Income Tax: Filing deadline for individuals extended to June 1. Payment deadline for both individuals and businesses extended to August 31, 2020.
GST/HST Deferral: Sales tax remittances deferred until June.
Customs Duty and Sales Tax for importers: March, April and May accounts
ON defers payment of Workplace Safety and Insurance Board payments for six months. Defer remittance of education property taxes for 6 months.
AB defers payment of corporate income tax to August. Workers’ compensation benefits payments deferred for one year.
AB defers timber dues for six months.
QC defers filing date of income tax returns to June 1, and payment of income tax to July 31, 2020.
3. Subsidies to Preserve Jobs, Employee Benefits, Food Assistance
The Canada Emergency Wage Subsidy - provides for a 75% wage subsidy on the first $58,700 of an employee’s salary, for a three-month period. Open to most businesses (other than public bodies) who see a 15% drop in their revenue. A smaller (10%) subsidy is available for other businesses.
ON doubles Guaranteed Annual Income payments to $166/$332 month for individuals/couples for six months. $200/$250 one-time payment per child. Electricity rate relief for families, small businesses and farms.
QC will “top up” salaries so all employees make min $2000 per month. $890 million incentive program to be used for, among other things, increasing the salaries of certain low-income essential service workers.
AB provides a one-time payment of $1,146 to self-isolating individuals pending receipt of funds under the CERB.
AB requires landlords and tenants to develop payment plans during the crisis.
4. Public Loan Guarantees and Expansion of Loans to Businesses
Canada Emergency Business Account: provides up to $25B to financial institutions to provide interest-free loans of up to $40K to small businesses. 25% of the loan can be forgiven if repaid by December 31, 2022.
Small and Medium-sized Enterprise Loan and Guarantee Program: $40B to help small and medium-sized businesses meet cash-flow requirements. $20B is available through Export Development Corporation (EDC) as new loan guarantees, and $20B is available through the Business Development Bank of Canada (BDC) as a co-loan.
Business Credit Availability Program: $10B available through EDC and BDC through small business loans of up to $100K, working capital loans, purchase order financing, credit insurance and loan guarantees.
Farm Credit Canada: $5B of additional support extended to FCC to allow it to increase lending capacity to farmers and agri-business. Farmers are given an additional 6 months to repay certain loans.
Industry-specific relief: Support for the oil industry, the publishing and news sector, airline industry (waiver of ground lease payments)
QC allocates $2.5B to support business through loans and loan guarantees. Public lenders will relax repayment terms.
AB makes $1.5B investment in the Keystone XL Pipeline and provides a $6B loan guarantee.
5. Student Loan Relief
Canada Student Loans: six-month, interest-free moratorium on loan payments
ON, BC, AB, have also enacted 6-month payment deferrals/freezes.
6. Insolvency Law Relief
Discussions ongoing between the stakeholders, including the Offices of the superintendent of Bankruptcy regarding appropriate relief with respect to automatic deadlines, surplus income, and court closures.
1. Reduction of Interest Rates
The Bank of Canada lowered its target for the overnight rate by 50 basis points to ¼ percent (0.25%). The Bank Rate is correspondingly ½ percent (0.5%) and the deposit rate is ¼ percent (0.25%).
2. Expansion of Central Bank’s Holdings of Government Bonds
Bankers’ Acceptance Purchase Facility (the “BAPF”). The Bank of Canada announced a new BAPF. This measure will support a key funding market for small- and medium-size businesses. Starting March 23, 2020, the Bank will conduct secondary market purchases of one (1)-month Bankers’ Acceptances issued and guaranteed by any Canadian bank and of sufficiently high quality, broadly equivalent to a minimum short-term credit rating of R-1 (low).
The first BAPF operation will be conducted on March 23, 2020. For the first operation, the Bank will purchase up to $10 billion of one (1)-month Bankers’ Acceptances with a reserve rate of the overnight index swap rate plus 20 basis points (bps). The eligible maturity range for the first operation will include Bankers’ Acceptances that mature between April 20, 2020, and May 4, 2020.
Insured Mortgage Purchase Program (the “IMPP”). The Government of Canada is launching the IMPP under which the Government of Canada will purchase up to $50 billion of insured mortgage pools through the Canada Mortgage and Housing Corporation.
Purchase of Canada Mortgage Bonds (the “CMB”). The Bank of Canada will purchase CMBs in the secondary market through a competitive tender process. As a starting point, the Bank will target purchases of up to $500 million per week. Operations will be conducted twice weekly and will continue for as long as market conditions warrant. The targeted amount may be adjusted higher or lower to reflect changing market conditions. Purchases will be conducted through primary dealers.
Expansion of the Bank of Canada’s Bond Buyback Program. Acting as fiscal agent, the Bank of Canada will broaden the scope of the current Government of Canada bond buyback program. Until further notice, buybacks will extend across all benchmark maturity sectors and will be conducted at least weekly. Regular weekly operations will be conducted on a switch basis. Cash buybacks will be conducted following nominal bond auctions. The Bank of Canada will announce the specific operational details (timing, maximum size of replacement bond and buyback basket) ahead of each operation through its regular call for tenders process.
Changes to the Bank of Canada’s Term Repo Operations. To proactively support interbank funding, the Bank of Canada will temporarily add new term repo operations with terms of six (6) and twelve (12) months. The Bank of Canada broadened eligible collateral for its term repo facility. The Bank of Canada is increasing the frequency of its term repo operations to at least twice a week starting March 24, 2020.
Provincial Money Market Purchase (the “PMMP”). The PMMP program is an asset purchase facility that will acquire provincially issued money market securities through the primary issuance market.
Secondary Market Purchases of Government of Canada Securities Program (the “Program”) The Bank of Canada is launching the Program to purchase Government of Canada (the “Government”) securities in the secondary market. The effective start date is April 1, 2020. Program details are as follows: purchases will begin with a minimum of $5 billion per week across the yield curve; the Program will be adjusted as conditions warrant but will continue until the economic recovery is well underway; operations will be conducted daily; and the operations will be cash purchases conducted via reverse auctions.
3. Other Measures to Support Flow of Credit
Changes to the Standing Liquidity Facility (the “SLF”) Collateral Policy. To give financial institutions greater flexibility in managing their collateral, the Bank of Canada will allow Large Value Transfer System (the “LVTS”) participants to temporarily assign 100% of their non-mortgage loan portfolio (“NMLP”) as pledged collateral for the SLF. LVTS participants who do not use their NMLP will be able to hold up to 100% of their pledged collateral for the SLF in securities that are currently subject to concentration limits.
Increase in the Frequency of the Issuance of Government of Canada Treasury Bills (“TBs”). Bank of Canada and the Department of Finance announced a change to the frequency for TB auctions. Acting as fiscal agent, commencing April 7, 2020, the Bank of Canada will issue TBs on a weekly basis.
Credit Insurance Coverage by Export Development Canada (“EDC”). For credit insurance customers, EDC will: cover losses for goods shipped even if the buyer has not accepted the goods, subject to terms; and waive the sixty (60)-day waiting period for claims.
Lowering of the Domestic Stability Buffer (the “DSB”). The OSFI is lowering the DSB by 1.25% of risk-weighted assets, allowing Canada’s large banks to inject $300 billion of additional lending into the economy. DSB requirement is now set at 1.00%.
New Co-Lending Program (the “CLP”) for Small and Medium Enterprises (“SMEs”). The CLP will bring the Business Development Bank of Canada together with financial institutions to co-lend term loans to SMEs for their operational cashflow requirements. Eligible businesses may obtain incremental credit amounts up to $6.25 million BDC’s portion of this program is up to $5 million maximum per loan.
Contingent Term Repo Facility (the “CTRF”). The Bank of Canada announced its intention to activate the CTRF by April 3, 2020, to counter any severe market-wide liquidity stresses and further support the stability of the Canadian financial system. Upon activation, the CTRF would offer Canadian dollar term funding to eligible counterparties on a standing, bilateral basis. This facility would provide funding liquidity to a broad range of financial institutions that meet the eligibility criteria.
USD Term Repo Facility. The Bank of Canada announced that it intends to launch a USD Term Repo Facility, should the need arise. Funding would be provided against a broad range of Canadian dollar collateral eligible for the Standing Liquidity Facility. Upon activation, the US dollar Term Repo Facility would provide US dollar liquidity to Canadian primary dealers and operations would be done on a fixed-rate full-allotment basis and at overnight index swaps + 25 bps. Terms and conditions of the USD Term Repo will be published at the time of activation, if applicable.
Standing Term Liquidity Facility (the “STLF”). The Bank of Canada launched its new liquidity facility, the STLF, effective March 30, 2020. Under the STLF, the Bank can provide loans to eligible financial institutions in need of temporary liquidity support and where the Bank has no concerns about their financial soundness. The STLF provides access to a broader set of eligible counterparties against a broader set of collateral at a higher price relative to routine term repo operations and the Standing Liquidity Facility.
4. Suspension of Foreclosures/Evictions
5. Reductions/Suspensions of Mortgage Payments
6. Asset Purchases (Liquidity Facilities, Purchase of Private and Public Sector Securities, Acquiring Equity of Larger Affected Companies)
Commercial Paper Purchase Program (the “CPPP”). For the next twelve (12) months, the Bank of Canada will conduct primary and secondary market purchases of commercial papers (“CPs”), including asset-backed CPs, issued by Canadian firms, municipalities and provincial agencies with an outstanding CP program. The Bank will purchase CP with a tenor of up to three (3) months of sufficiently high quality, broadly equivalent to a minimum short-term credit rating of R-1 (high/mid/low).
7. Exchange Rate Adjustments
1. Social Distancing
As of March 21, 2020, there is a 30-day restriction on all non-essential travel at the Canada-U.S. border. This restriction covers all travel of an optional nature, such as tourism, recreation, entertainment.
Healthy people who must cross the border for work or other essential purposes may continue to do so. These travelers will only be let into the country if they have not been outside Canada or the U.S. in the 14 days before requesting entry into Canada. Canada and the U.S. recognize how closely their economies are integrated. It is essential that trade continue during this pandemic. Economic supply chains remain open and Canada will work to ensure that access to goods and services is not interrupted.
Restrictions and exemptions for foreign nationals
Any foreign national who has symptoms of COVID-19 will not be allowed to enter Canada.
Foreign nationals arriving from the U.S. without symptoms of COVID-19 will be allowed to enter Canada only for essential travel.
Foreign nationals, excluding those arriving from the U.S., will not be allowed into Canada. However, there are exemptions to these restrictions for foreign nationals arriving from other countries.
Crossing the border
Entry screening is an important public health tool. Canada border services officers are taking steps to ensure any traveler who may have symptoms of COVID-19 are referred for further health screening and examination when required.
Some travelers, such as truck drivers, firefighters and nurses, cross the border every day to work or study. They will not be impacted by the new border measures.
All international passenger flight arrivals have been redirected to 1 of 4 airports: Calgary International Airport, Vancouver International Airport, Toronto’s Pearson International Airport and Montréal’s Pierre Elliott Trudeau International Airport.
For returning travelers without symptoms of COVID-19
Returning travelers to Canada having no symptoms, must quarantine (self-isolate) for 14 days.
For returning travelers showing symptoms of COVID-19
Canadian or a permanent resident, having symptoms consistent with COVID-19, may still enter Canada by land, rail or sea, but may not enter Canada by air, to protect the health of all travelers.
Those who have symptoms and are permitted to enter Canada must ISOLATE for 14 days. This is mandatory. If required, immediate medical attention will be provided upon arrival in Canada.
Foreign travelers having symptoms consistent with COVID-19, will not be permitted to enter Canada.
ON declared a state of emergency on March 17, 2020, extended on March 30, 2020.
ON Order (O Reg 51/20) orders the closure of the following establishments from March 17 to March 31, 2020, unless terminated:
- All facilities providing indoor recreational programs;
- All public libraries;
- All private schools as defined in the Education Act;
- All licensed child care centres;
- All bars and restaurants, except to the extent that such facilities provide takeout food and delivery;
- All theatres including those offering live performances of music, dance, and other art forms, as well as movie cinemas; and
- Concert venues
ON Order (O Reg 52/20) prohibits all organized public events of over fifty people are hereby prohibited including parades and events and communal services within places of worship, effective March 17 to March 31, 2020, unless terminated.
QC declared a public health emergency on March 14, 2020, renewed on March 20, 2020, but has not yet declared a provincial state of emergency. All indoor and outdoor assemblies are prohibited except:
- if require in a workplace or pursuant to an activity not covered by a suspension;
- if required to obtain services/goods from or provide services/goods to an individual/ institution or enterprise whose activities are not covered by a suspension;
- in a means of transportation;
- outdoor assemblies if, (i) the persons assembled are the occupants of a same residence, (ii) a person receives a service or support from another person; (iii) a minimum of 2 meters is maintained between the persons;
- in a private residence between the occupants of that residence and any other person who provide them with a service or whose support is required.
All visits are prohibited in retirement homes and other long-term care facilities. Residents of such facilities may no longer exit their residences without supervision.
Quebecers of more than 70 years old must self-isolate and stay at home.
Local emergencies were declared for the Montreal and Eastern Townships Areas, considered has “hot spots” of the pandemic, allowing for more coercive measures by local police forces.
All Quebecers are being asked to stay home, and to avoid travelling from one region to another or from one city to another, except where necessary. Such travel should be confined to trips for medical reasons and work when teleworking is not possible. To this end, to protect certain regions that are more vulnerable (especially in remote areas), checkpoints have been set up on main roads leading to more than 12 health regions and territories of the Province.
AB declared a public health emergency on March 17, 2020, but has not yet declared a provincial state of emergency. Since March 27, 2020, the public or private gathering of persons in excess of 15 people in a group, in an outdoor location, is prohibited. Any persons gathering in an outdoor location must maintain a minimum of 2 metres distance from one another. The public or private gathering of persons in excess of 15 people in a group, in an indoor location, is prohibited. Any persons gathering in an indoor location must maintain a minimum of 2 metres distance from one another.
BC declared a public health emergency on March 17, 2020, and a provincial state of emergency on March 18, 2020, extended on March 31, 2020.
2. Closure of Public Places for Gathering
ON Amending O.Reg 52/20, on March 28, 2020, the Province of Ontario has prohibited organized public events and social gatherings or more than five people. Organized public events include parades, events including weddings, social gatherings and communal services within places of worship. This order replaces a previous emergency order which prohibits organized public events of over 50 people.
ON O. Reg 104/20 (March 30, 2020): Closure of outdoor recreational amenities
- All outdoor playgrounds, play structures and equipment
- All outdoor sports facilities and multi-use fields
- All off-leash dog areas.
- All portions of park and recreational areas containing outdoor fitness equipment.
- All outdoor allotment gardens and community gardens.
- All outdoor picnic sites, benches and shelters in park and recreational areas. Outdoor recreational amenities that are intended for use by more than one family are closed, regardless of whether they are publicly or privately owned and regardless of whether they are attached to a park system.
QC Please see Section 1, above.
AB Please see Section 1, above.
BC Provincial Health Officer restricted gatherings of more than 50 persons. Other restrictions have been imposed on night clubs, food and drink services and personal services establishment.
3. Closure of Non-Essential Businesses
ON O.Reg 82/20 orders the mandatory closure of all non-essential businesses starting at 11:59 pm on March 24, 2020.
QC has closed all non-essential businesses gradually, between March 15, 2020 and March 24, 2020, which will remain closed at least until May 4, 2020. Essential services such as grocery stores and other food retailers remain open but will be closed on Sundays for the month of April 2020.
Sunday Closures: all retail commercial establishments must close to the public on Sundays, including essential services. The only businesses which will be exempt are pharmacies, convenience stores, service stations, restaurants providing take-out, drive-through and delivery, as well as grocery stores, but only for orders placed online or by telephone for delivery
AB Since March 27, 2020,The following types of non-essential places of business are no longer permitted to offer or provide services to the public at a location that is accessible the public:
- Any place of business offering or providing non-essential health services (includes any service that is generally done to protect, promote or maintain health of an individual and where an interruption in the provision of services will not result in an individual’s life, health or safety being immediately endangered)
- Any place of business offering or providing personal services.
- Any place of business offering or providing wellness service, including but not limited to massage therapy services and reflexology services.
- Any retail store, including a retail store located in a shopping centre, or other similar place of business offering or providing only non-essential goods or services.
- No dine-in services are permitted to be offered or provided. Take-out and delivery services will continue to be available.
- Any place of business that is still permitted to operate that offers or provides services to the public at a location that is accessible to the public must prevent the risk of transmission of infection to co-workers and members of the public, provide for rapid responses if a worker or member of the public develops symptoms of illness while at the place of business, and maintain high levels of workplace and worker hygiene.
BC On March 23, Premier Horgan told reporters that shuttering non-essential businesses during the coronavirus crisis was not an approach he preferred.
In its March 26, 2020, news release, the BC government said that, in consultation with the provincial health officer (PHO), any business or service that has not been ordered to close, and is also not identified on the essential service list, may stay open if it can adapt its services and workplace to the orders and recommendations of the PHO.
4. School Closures
ON closed all schools, from elementary schools to universities.
QC Daycares, schools and higher learning establishments have been closed since March 13, 2020, and will remain so, until May 1st, 2020.
AB Schools and educational institutions have been closed since March 16, 2020, and will not reopen until further notice.
BC Under the direction of the Provincial Health Officer, the Minister of Education has suspended in-class instruction in all schools until further notice.
Support for Canadians abroad
To help Canadians return home or cope with challenges they are facing while travelling, the Government of Canada has created the COVID-19 Emergency Loan Program for Canadians Abroad.
The Program will provide the option of an emergency loan to Canadians in need of immediate financial assistance to return home or to temporarily cover their life-sustaining needs while they work toward their return.
Global Affairs Canada is providing 24/7 consular support to Canadians abroad affected by COVID-19 through the Emergency Watch and Response Centre and through consular staff at its network of missions.
Canada’s support for international efforts to fight the COVID-19 pandemic
The COVID-19 pandemic is a global threat that does not recognize borders and can only be overcome through coordinated action all around the world. Canada continues to contribute to international efforts to address the ongoing pandemic by providing urgent and necessary funding, including to support those who are most vulnerable.
On April 5, 2020, the Honourable Karina Gould, Minister of International Development, announced the allocation of $159.5 million in funding to support international efforts to fight the COVID-19 pandemic. This investment includes $50 million announced by Prime Minister Justin Trudeau earlier in March.
Details of the funding allocation can be found in the backgrounder linked to below.
- On February 11, 2020, the Government of Canada provided $2 million to the World Health Organization to help vulnerable countries prepare and respond to COVID-19 events.
- On March 11, 2020, the Government of Canada announced $50 million to support the efforts of international assistance partners to prevent and respond to COVID-19. This announcement included $8 million, which was allocated to the World Health Organization, the Pan American Health Organization, the United Nations High Commissioner for Refugees and the International Federation of Red Cross and Red Crescent Societies.
- The funding announced on April 5, 2020, will support the provision of medical supplies and services; increase water, sanitation and hygiene services; enhance public information on COVID-19 risk mitigation; and help strengthen local capacity to scale up for the response.
Backgrounder - Canada provides funding to address COVID-19 pandemic
QC Since March 28, 2020, Minister of Justice and Attorney General of Québec Sonia LeBel announced two temporary measures allowing notaries (i.e. solicitors) to close notarial acts (or deeds) remotely and bailiffs to serve pleadings other than by hand. These measures are effective until the end of the current public health emergency. They are part of the Québec government’s ongoing efforts to safeguard the rights of citizens while limiting the spread of COVID-19.
Closing notarial acts remotely
Notarial acts (or deeds) may be closed remotely provided that (i) the notary can see and hear each party;(ii) all parties and intervenors can see and hear the notary;(iii) where the context requires, witnesses can see and hear the parties and the notary;(iv) the signatories and the notary can see the act or the part of it that concerns them;(v) the signatories other than the notary affix their signature by a technological means that enables their identification and the acknowledgement of their consent; and (vi) the notary affixes his or her official digital signature.
The notary must ensure the integrity and confidentiality of the documents shared and of the processes leading to the signature of the act. He or she must also maintain the integrity of the act throughout its life cycle, including to ensure its preservation.
Serving pleadings by technological means
Bailiffs may serve pleadings by a technological means, such as email or fax, rather than by hand as is normally required. Citizens representing themselves may not unreasonably refuse to receive the notification of a document by a technological means. If a person does not have a technological means at his or her disposal to receive a document, the other usual methods of notification must be used. Lawyers will continue to receive notifications by technological means as is already the case.