The Canadian Real Estate Association just released a thorough summary of how the emergency economic measures announced yesterday by the Federal Government impact self-employed Canadians and small businesses.
We thought we would pass it along here to try and add a bit of clarity to our many friends and clients who also own and operate small businesses.
If you have questions about current status of the local real estate market we invite you to call us anytime. We’re here to help.
John & Cathy Call/Text; 905-892-8920
Team Berkhout Bosse, RE/MAX Welland Realty Ltd., Brokerage
Information related to the efforts to mitigate the outbreak of COVID-19 is constantly evolving. First and foremost, we recommend REALTOR®members follow the guidelines and precautions set by Canada’s public health authorities. See Health Canada’s website for comprehensive coverage.
In ongoing discussions with government officials from various departments and agencies, we continue to emphasize the unique challenges facing REALTORS® as economic measures to support self-employed Canadians and small businesses are considered. The result of these advocacy efforts since the emergence of COVID-19 are captured below.
- Government introduced the Emergency Care Benefit, providing up to $900 bi-weekly for up to 15 weeks, to workers, including the self-employed, who are quarantined or sick with COVID-19, as well as those who are taking care of a family member who is sick with COVID-19, but do not qualify for Employment Insurance (EI) sickness benefits. Application for the Benefit will be available in April 2020 through the Canada Revenue Agency My Account secure portal, My Service Canada Account, or through an automated application process by telephone.
- Also announced was the Emergency Support Benefit, which will provide up to $5 billion in support to workers who are not eligible for EI and who are facing unemployment. This will be available to Canadians who are self-employed; more details will be provided in the coming days.
- Effective March 16, the Bank of Canada has lowered its target for the overnight rate by 50 basis points to ¾ percent as a proactive measure taken to counter negative shocks to Canada’s economy. In the interest of providing financial institutions with the confidence to continue lending to one another, as well as to businesses and consumers, the Bank of Canada will also be purchasing approximately $500 million in mortgage bonds per week, while the Canada Mortgage and Housing Corporation will acquire up to $50 billion of insured mortgage pools.
- For small businesses, government will provide a temporary wage subsidy for a period of three months, equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. The subsidy is available to corporations eligible for the small business deduction, as well as non-profit organizations and charities.
- Businesses will also be allowed to defer, until after August 31, 2020, the payment of any income tax amounts that become owing between now and September 2020. This applies to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
- Regarding the stress test, the Office of the Superintendent of Financial Institutions is suspending all consultations on regulatory matters, including on the proposed new Benchmark Rate for the minimum qualifying rate for uninsured mortgages. Government is also suspending the coming into force of the new Benchmark Rate for the minimum qualifying rate for insured mortgages until further notice.
The full list of measures announced by the government today is available here. It is expected the House of Commons will be recalled next week to pass the emergency economic measures.
While all the details of the various programs announced today are not yet available, the Governor of the Bank of Canada concluded today’s press conference with the assurance that “if people need the support, they will get it.” We will continue to monitor the evolution of these programs and continue to advocate on behalf of REALTORS®.
Canada’s six largest banks also announced financial relief for Canadians impacted by the economic consequences of COVID-19, including up to a six-month payment deferral for mortgages and the opportunity for relief on other credit products.