After more than 12 hours of tense negotiations between the political parties, agreement was reached on the contents of the legislation needed to approve the government’s COVID-19 package. The COVID-19 Emergency Response Act was passed unanimously by the House of Commons just before 6:00 AM this morning. The legislation moved directly to the Senate where it was debated and passed without amendment around noon today. It has now received Royal Assent.
NEW FEDERAL LEGISLATION
As outlined within the legislation, the Prime Minister today announced the creation of the Canada Emergency Response Benefit (CERB) to support the unemployed. It replaces and combines the earlier announced Emergency Care Benefit and the Emergency Support Benefit announced last week. The CERB will provide a taxable $2,000 per month for workers for up to four months who have lost a job, are ill with COVID-19 or caring for a person sick with COVID-19, parents caring for children, the self-employed and people engaged in contract work. The new program applies to all these individuals, whether they qualify for EI or not.
Unlike EI, the application process for the Canada Emergency Response Benefit will be through the CRA. This is a recognition that CRA computer systems are more robust than EI systems at ESDC. It also allows CRA to deposit funds directly into accounts once they are approved, as long as people have (or will) register for direct payment.
Anyone reporting income of more than $5,000 last year will be able to apply. They hope the portal will be open by April 6 and to be able to deliver money to people within 10 days of application.
The Prime Minister said that more details on the new program will be available later this week.
QUARANTINE ACT IN PLACE FOR ALL RETURNING TRAVELLERS
Federal Health Minister Patty Hajdu announced today that effective at midnight tonight, all returning Canadian travellers must go into self-isolation. This requirement will be enforced through measures in the Quarantine Act, with penalties including criminal sanctions or fines. More details will be available this afternoon.
THE MEASURES INCLUDED IN THE BILL
The legislation provides the statutory backing for the initiatives the government announced last week, and clears the way for the government to start implementing the following measures:
- Authorizing income support payments to workers who suffer a loss of income for reasons related to the coronavirus;
- Augmenting the GST/HST tax credit;
- Augmenting the Canada Child Benefit;
- Lowering the minimum withdrawal level for RRIFs for 2020;
- Implementing the “temporary wage subsidy” for eligible small employers for three months;
- Amending 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;
- Allowing Canada Student Loans and Canada Student Financial Assistance interest relief;
- Providing interest relief on Apprentice Loans;
- Amending the Employment Insurance Act to give the minister the power to make interim orders to fight COVID-19 economic impacts and lifts any requirement for a medical documentation normally required by the Employment Insurance Act for benefit eligibility, provided the Canada Employment Insurance Commission verifies eligibility.
Several measures to support financial stability are also included in the legislation:
- Increasing the deposit insurance coverage limit until September 30, 2020, and potentially recapitalizing the CMHC by Order-in-Council if necessary, and increasing the maximum total for the outstanding insured and amounts of all insured loans;
- Broadening EDC’s mandate and allowing for it to be recapitalized;
- Changing BDC as well, “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”;
- Authorizing additional transfers to provinces and territories;
- Facilitating/streamlining the process for additional government borrowing;
- Giving the government more flexibility to determine the limit on the amounts that the government may pay to Farm Credit Canada.
- Providing for an extension until September of certain sections of the Financial Administration Act (special warrant) and provides more reporting time for tabling of public debt updates.
THE PARTY POSITIONS
While expressing overall support for the government’s package and the need for it to be passed quickly, the Conservatives bridled at what they saw as the government’s attempt to seize powers to raise taxes, debt and spending without Parliamentary oversight and accountability in an extended time period until January 1, 2022. They succeeded in forcing the government to delete those provisions from the bill; the former authority to bypass Parliament by using regulation to tax and spend was removed.
In addition, all measures in the act that have a sunset have been adjusted to end on September 30, 2020 and the authority to use Special Warrants to approve spending has ben removed, also bringing the end date back to September 30, 2020. The type of payments authorized under the Financial Administration Act have been limited, and the revised bill limits the spending that can be authorized by the government under the Canada Student Loans Act, the Canada Student Financial Assistance Act and Apprentice Loans Act.
Most importantly, the government is now required to make regular reports to the House of Commons Health & Safety and Finance Committees, and the Finance Committee has the right to recall Parliament if it identifies any abuses. Starting the week of March 30, the finance minister will give a biweekly report on all actions undertaken in relation to the pandemic to be discussed when (if) Parliament returns on April 20. The Standing Committee on Finance will begin a review of the COVID-19 Emergency Response Act within six months from today and will report its findings to the House no later than March 31 next year. With the government in a minority position, these measures provide strong tools for the opposition parties to enforce accountability on the implementation of the measures contained in the bill.
NDP leader Jagmeet Singh released a statement last night that stressed the need for the government to act quickly to help people “pay their rent, pay their bills and feed their families.” In the debate last night NDP members put forward eight measures “that will make the difference between making it through or not for most Canadians:”
- Send immediate and direct assistance to all Canadians with a cheque for $2,000 per adult with an additional $250 per child.
- Increase the wage subsidy going to small and medium-sized businesses to above 75%.
- Fix EI by waiving the waiting period, decreasing the threshold of working hours to qualify and removing the requirement to be “willing and able to work”.
- Help our healthcare system with the resources it needs by using federal powers to spur the production of medical supplies and equipment and recognizing the credentials of health care workers trained outside of Canada, so they can help.
- Work with all levels of government to put a moratorium on rent, mortgage and utility payments.
- Make banks waive interest fees and charges on credit cards, bank loans, lines of credit and mortgages for at least the next two payments cycles.
- Provide a clear plan for delivering the necessary supplies and equipment to Indigenous communities.
- Tie any help given to corporations to job and wage protection – the help must not go to CEO bonuses, stock buy-backs, etc.”
The Bloc Quebecois
Like the Conservatives, the Bloc Quebecois was always ready to support the government’s legislation, but its resistance was based more on issues of process and information-sharing than on substance. During the long negotiations leading to the agreement last night Bloc Leader Blanchette agreed the government needed some flexibility to quickly get financial relief out the door to Canadians and businesses without having to recall Parliament each time but argued that extraordinary powers should not last longer than September of this year. He also noted that defeat of the bill would be a vote of no confidence for the minority Liberal government and would possibly trigger an election.
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