COVID-19: Earnscliffe Update #21

COVID-19: Earnscliffe Update #21

With CERB payments set to end in early July for millions of Canadians, the federal government is under increasing pressure to announce transitional measures to support those who may still be without work due to the COVID-19 pandemic. This week, the government tabled new legislation meant to encourage a safe return to work, where possible, for CERB recipients while also proposing penalties for fraudulent CERB claims. Without a willing ally in the House of Commons, however, progress on passing the bill has stalled, as opposition parties refused to provide the unanimous consent required to proceed with debate.

THE FIGHT OVER CERB TRANSITION

Last Wednesday, the government failed in its attempt to table Bill C-17 in the House.  The bill contains several provisions affecting multiple programs.  Among other measures, C-17:

  • Outlines new penalties—retroactive fines and jail time—for making fraudulent claims for the Canada Emergency Relief Benefit (CERB);
  • Includes changes to the federal wage subsidy program;
  • Narrows eligibility significantly setting out conditions under which people must go back to work or forfeit their benefits; and
  • Provides for a one-time payment of $600 for people with disabilities who are eligible for the Disability Tax Credit.

Under the rules governing the House during the shut-down period, the government needed the agreement of all four opposition house leaders to introduce legislation.

The NDP refused consent for several reasons.  It rejected the punitive measures proposed for fraudulent CERB claims; they also wanted CERB coverage to be expanded to 16 weeks and the disability supports to have a wider focus.  The Conservatives renewed their demand that the Liberals end their shut-down of the House and restore normal sittings.  The Bloc Quebecois demands included a fiscal update from the government, a First Ministers’ meeting on health transfers and the repayment of the wage subsidies claimed by the Liberals.

When it became apparent that the required unanimous agreement was not possible, the government offered to split the bill, allowing the disability payment provision to go forward, but the Conservatives refused, maintaining that the legislation was not necessary to flow the money.  As a result, the proposed payment remains stalled until the impasse is resolved, but today, the Prime Minister said the government is “looking at ways that don’t involve legislation” for getting the money to people with disabilities.

When the government first introduced CERB in March, it turned aside Conservative suggestions for measures to safeguard against fraud, arguing that speed was of the essence.  The government even issued orders to public servants to concentrate at all costs at getting the money out the door and into the hands of needy Canadians. The penalties for fraud now proposed by Bill C-17 have prompted pointed questions from both tax policy experts and civil libertarians:

  • Allan Lanthier, a tax expert formerly with Ernst and Young, said “Retroactive legislation is used sparingly in Canada. Many taxpayers may now face significant fines for what they view as innocent errors under CERB rules that were changing from one news conference to the next.”
  • Michael Bryant of the Canadian Civil Liberties Association said the proposed law potentially violates the constitution because people can’t be found guilty of a crime unless the action was against the law when it occurred. He also noted that fraud is already a crime.

The challenges the government has faced with the proposed legislation are just the tip of a large iceberg. With the July 5 end date approaching, when many CERB recipients will lose their benefits, the government must figure out how to transition out of CERB, while not leaving millions of workers high and dry.  The program has already cost $43 billion and is eating up another $3.6 billion per week. The economy is now re-opening, and for people who started claiming the benefit on March 15, eligibility runs out on July 6.  The recent job numbers are encouraging, but it doesn’t help that almost a third of the labour force earns  under $15 an hour, which is less than CERB provides.

As it works out the transition, the government will have to walk some very fine lines, allowing the labour market to begin working again, while ensuring incentives to return to work as it continues to support those whose jobs have not yet returned.

PROVINCES COMING ONSIDE ON CECRA

On April 24, the federal government announced the Canada Emergency Commercial Rent Assistance (CECRA), intended to provide relief for small businesses experiencing financial hardship due to COVID-19. The program offers unsecured, forgivable loans to eligible commercial property owners to reduce the rent owed by their impacted small business tenants and meet operating expenses on commercial properties.

The government had high hopes for the program, reasoning that landlords would prefer giving up 25 per cent of their rent instead of receiving no rent at all, but the buy-in from landlords has been much lower than anticipated.  Landlords also complained that the application process was complicated and that it also required tenants to fill out their own applications.  As a consequence, the take-up on the program has been minimal.  A survey conducted at the end of May by the Canadian Federation of Independent Businesses showed that half of business owners would not be able to pay rent in June, and 20 per cent feared eviction if they continued to not pay rent.

Two weeks ago, the governments of British Columbia, Saskatchewan and Alberta all moved to ban commercial evictions in light of increasing reports of tenants being evicted.  Ontario followed suit last Monday, with Premier Ford ordering legislation to ban the eviction of commercial tenants from June 3 to August 31. Also last Monday, Quebec moved in a similar direction but with a slightly different approach.

CHANGES TO RESTRICTIONS FOR “IMMEDIATE FAMILY MEMBERS”

Last week, the government announced changes to prohibitions on entering the country.  As of June 8, foreign nationals who are immediate family members of Canadian citizens and permanent residents, and who do not have COVID-19 or exhibit any signs or symptoms of COVID-19, are allowed into Canada if entering to be with an immediate family member for a period of at least 15 days.  They will be required to quarantine for 14 days.

An immediate family member refers to a person’s:

  • Spouse or common-law partner;
  • Dependent child, as defined in section 2 of the Immigration and Refugee Protection Regulations, or a dependent child of the person’s spouse or common-law partner;
  • Dependent child, as defined in section 2 of the Immigration and Refugee Protection Regulations, of a dependent child referred to in paragraph (b):
  • Parent or step-parent or the parent or step-parent of the person’s spouse or common-law partner;
  • Guardian or tutor.

ARMED FORCES TO STAY LONGER IN ONTARIO / QUEBEC

Despite the much longer extensions requested by Premiers Ford and Legault, the Prime Minister announced today that the army will only stay until June 26 in Ontario and Quebec long-term care facilities. The PM suggested following the army’s departure, there may be a possible transition to support from the Red Cross.

NEW SUPPORTS FOR RE-OPENING THE ECONOMY

Last week, Small Business, Export Promotion and International Trade Minister Ng announced a federal government partnership with the People Outside Safely Together (POST) Promise program, an initiative launched by Canadian private sector organizations to help businesses across the country reopen safely.

The “POST Promise” is a voluntary commitment that business owners and managers can make by following five key public health actions that will help prevent the spread of COVID-19:

  • Maintaining physical distance;
  • Washing and sanitizing hands;
  • Cleaning and disinfecting regularly;
  • Staying home if unwell and self-monitoring for symptoms; and
  • Practising respiratory etiquette (including wearing a mask when physical distancing is difficult)

By displaying the “POST Promise” logo, participating businesses can reassure customers that they are doing their part to help protect Canadians’ health and safety.

Sponsors the POST Promise program include the Business Council of Canada, the Building Owners and Managers Association (BOMA Canada), the Canadian Federation of Independent Business, the Canadian Global Cities Council, Restaurants Canada and the Retail Council of Canada

The federal government also announced last week the creation of a new web hub for organizations looking to find resources on buying and supplying personal protective equipment (PPE).  The Supply Hub connects Canadian organizations with federal, provincial, territorial and other resources and information about PPE, including consumer guidance. Buyers will find PPE supplier lists, in addition to guidance to help plan their PPE purchases.

TEMPERATURE CHECKS IN AIRPORTS

Today, the Prime Minister announced that temperature checks in airports will become mandatory in a phased approach. First, travelers coming into Canada will be checked, followed by travelers leaving Canada and finally those travelling within Canada. He emphasized that this is not a direct measure to detect COVID-19 but is an added layer of protection to ensure Canadians who are travelling are healthy.

BY THE NUMBERS

The federal government released its regular bi-weekly report to the Commons Finance Committee on its emergency response measures. The depth and breadth of the measures is captured in the following summary of the programs, their costs and number of Canadians reached by federal pandemic programs:

Programs For Individuals And Groups

  • Canada Emergency Response Benefit: Over $43 billion in CERB payments to 8.41 million applicants as of June 4, 2020 (p.7)
  • Canada Emergency Wage Subsidy: $10.5 billion paid out through 354,870 CEWS applications, from 209,370 unique applicants as of June 8. (p.25)
  • Canada Emergency Commercial Rent Assistance: As of June 8, over 5,500 tenants with 38,700 employees supported, representing over $39 million in funding. (p.12)
  • Temporary EI Measures: 3.96 million EI ERB applications submitted through Service Canada, all have been processed for $20.56 billion in payments as of June 4, 2020 (p.18)
  • Canada Emergency Business Account: Over 663,000 applications approved for over $26.28 billion in additional credit.
  • Canada Emergency Student Benefit: Over $726 million in CESB payments to over 532,000 applicants as of June 7, 2020 (p.11)
  • Women’s Support Services: $40 million allocated to Women and Gender Equality (WAGE), including $30 million for immediate needs. Approximately $27.5 million has been distributed to 93 sexual assault centres, 432 women’s shelters and 167 organizations in Quebec, as of June 5, 2020. (p.8)
  • Food Banks: As of June 11, $70 million distributed to support local food banks and other organizations providing emergency hunger relief, with $30 million in spending remaining. (p.9)

Support for Liquidity

  • Provincial Money Market Purchase Program (PMMP): $6.7 billion as of June 4, 2020 (p.16)
  • Provincial Bond Purchase Program (PBPP): $2.9 billion as of June 4, 2020 (p.16)
  • Commercial Paper Purchase Program (CPPP): $1.7 billion as of June 4, 2020 (p.16)
  • Corporate Bond Purchase Program (CBPP): $58 million as of June 4, 2020 (p.16)
  • Secondary Market Purchase of Government of Canada Securities: $52.8 billion as of June 4, 2020 (p.16)

Grand Total

  • Protecting Health and Safety, Direct Support Measures and Tax Liquidity Support – Grand Total: $244,483,000,000 ($244 billion), 10.6% of GDP, as of June 11, 2020 (P.21)

THE UNITED STATES

The perfect storm of a global pandemic, fears of a historic reckoning, and economic distress has Americans worried about the future. Despite job numbers improving slightly, the reality for many businesses is that they may bring employees back just to have to let them go as consumer confidence remains depressed. Houston is on the verge of re-establishing lock-down orders as its numbers of new COVID19 cases have grown to record levels. Almost half of the states are seeing indications of a second wave as the effects of reopening are realized and are considering what actions to take to ensure hospital capacity and limit the spread of the virus.

As the United States continues to exorcise its past by remaking, renaming and removing structures and policies that are identified with systemic and historical racism, the rest of the world has taken note. The Black Lives Matter movement has spread to include countries from Canada to the U.K. and across Europe. Conversations on how to address systemic racism and bias have led to books on race, history, and discrimination leading the best sellers list, changing the global vocabulary while protests continue. Seattle’s mayor allowed protestors to take over city hall and police headquarters. Her decision to de-escalate has created a twitter war between the President and Governor Jay Inslee as well as with her directly. The President continues to view many of the protests as an affront to him personally and has threatened unconstitutional federal action to ”take back” cities like Seattle.

The path to the November 3rd election continues to be complicated. The primary elections in Georgia this past week saw long lines of people, spaced six feet apart, waiting to vote on new voting machines that either never showed up or did not work as promised. Meanwhile, the President has chosen June 19th or “Juneteenth,” a day that celebrates the end of slavery in the United States, to re-start his campaign rallies, starting in Tulsa, Oklahoma. In 1921, Tulsa was the scene of a race riot that killed scores of Black citizens. For many Americans, this feels like a slap in the face – a dog whistle for white supremacists in the midst of a historical correction that more and more Americans agree is desperately needed.

The President has a waiver in place for those that attend his rallies, stating that attendees absolve him of responsibility if they contract COVID-19. Due to COVID-19 restrictions, the Republican National Convention has been moved from North Carolina to Jacksonville, Florida. The showdown between the Governor of North Carolina and the President on the size of the gathering proved to be intractable.

As the country moves closer to election day and the markets continue their volatility, events continue to frame the overall conversation and threaten the electoral process. This moment has combined the stress of the great depression with that of the civil rights movement on the eve of an election. The characteristic optimism of Americans is being tested, as the road to economic recovery reveals itself to be unexpectedly complicated.

BRITISH COLUMBIA

British Columbia is now nearly four weeks from the beginning of phase 2 of “BC’s Restart Plan” and COVID-19 transmission remains low. As of June 9th, there are 183 active cases of in the province, and 6 straight days without a COVID death.  Overall, we’re seeing more movement towards modifying guidelines and encouraging reopening and expansion in certain sectors.

Premier Horgan this week announced that the Provincial Health Officer signed off on the NHL plan for Vancouver to be a host city for the NHL playoffs. Two-week quarantine will be required, but teams will be permitted to isolate as a group in isolation bubbles under the plan. The Premier has sent a letter to the Prime Minister requesting support for necessary exemptions for the entry of athletes, staff and officials.

  • Worksafe B.C. has released safety guidelines for the B.C. film industry to resume production, but anyone entering Canada will still need to adhere to the mandatory 14-day quarantine and the issue of non-essential travel will need to be addressed. The Premier noted that even though production is opening in California, BC remains competitive because of the skilled workforce here and the low numbers of COVID cases.

To encourage the return to amateur sport, B.C. announced an order to protect amateur sport organizations, their employees and volunteers from COVID-19 liability.

The PHO released a modified health order allowing restaurants to increase capacity above 50% with the caveat that 2 metre distance remains between parties.

Horgan indicated again that tourism is one of the hardest hits sectors and could benefit from the $1.5 billion in recovery funding in the COVID-19 Action Plan that has not yet been allocated.

Amid news of the curtailment of a Paper Excellence mill in Mackenzie impacting 253 workers, the province announced it will postpone changes to the  Manufactured Forest Products Regulation and the variable fee-in-lieu of manufacture on log exports.

ALBERTA

The second phase of Alberta’s relaunch strategy begins today, a full week earlier than that what the province had previously proposed and includes a wider array of businesses and activities that are authorized to resume operations. Movie theatres, community halls, wellness and personal services such as massage and nail salons are resuming operations along with K-12 schools for summer classes, pools, libraries, gyms, and other recreation facilities.

Gatherings can also be larger in numbers, with a 50-person maximum for indoor social events like weddings and funerals and up to 100 people are allowed to gather at outdoor events. Indoor events with assigned seating can also include up to 100 people. The cap on gatherings has been removed entirely for worship services, restaurants, casinos, and bingo halls. Guidance has been updated to allow for sports team to play in regional-only cohorts of up to 50 players.

The announcement of the accelerated and expanded second phase came on Monday, with Premier Kenney citing a 50% decrease in COVID-19 cases in Alberta since the first phase began on May 14. However, Alberta’s active case count has climbed by approximately 10% over the last week, and public health officials are asking Albertans to remain diligent in physical distancing and wearing a mask when that’s not possible.

As of June 11, Alberta has 7,316 total cases, 379 active cases, 6,788 recovered cases, 45 cases in hospital, 6 cases in intensive care and 149 deaths.

Latest News:

  • Details were revealed this week by Education Minister Adriana LaGrange about planning occurring for the 2020-2021 school year. Three options were presented with the aim of having in-school classes resuming with near normal operations and additional health measures.

MANITOBA

Manitoba has now released draft details of Phase 3 of their reopening plan targeted for implementation of June 21. Among a number of measures detailed in the plan, Phase 3 would allow public gatherings of 50 people indoors and 100 people outdoors while respecting social distancing. 

ONTARIO

With Ontario’s COVID-19 caseload beginning to decline for the first time in almost three months, Premier Ford this week announced Ontario’s second stage of its plan to re-open the economy.

In an about face for the Ontario government, the economy has begun to reopen on a regional basis, despite the Premier rejecting the idea of taking a regional approach earlier in the month. Effective Friday June 12 at 12:01 AM, 24 of the province’s 34 public health regions entered stage two of the reopening, leaving some of the province’s larger municipalities and economic engines such as Toronto, Durham, Halton, Peel, York, Haldimand-Norfolk, Hamilton, Niagara, and Windsor-Essex locked down in stage one.

With no travel restrictions within the province, this approach is not without its risks given its asymmetry. It remains to be seen if people from stage one regions travelling to phase two regions to enjoy expanded amenities will lead to COVID-19 outbreaks in places with previously low caseloads leading to a need to roll some of these regions back to phase one status. How will the public and government respond if this is the case? Could this exacerbate already existing urban/rural tensions in the province, and how will a government with a strong rural/smaller municipality presence in its caucus respond – only time will tell.

How will the Province decide who moves into phase two? With some regions in stage one and others in stage two, the province will consider four key factors to determine which regions will be allowed to move into stage two next:

  • Virus spread and containment;
  • Health system capacity’
  • Public health system capacity; and
  • Incidence tracking capacity.

At the beginning of each week, the government will provide an update on the ongoing assessment of those regions not currently included in Stage 2, and whether they are ready to move into Stage 2 at the end of the week. This would mean that the earliest places like Toronto could open will would be June 19th.

Phase two broadens the list of businesses that are allowed to open and includes restaurant patios, personal care services, salons and tattoo parlours, shopping malls, libraries, community centres and so on. The full list of which businesses are allowed to open as a part of stage two can be found here.

QUEBEC

The parliamentary session ended today with a special call by Premier Legault to pay tribute to the victims of COVID and to promise ourselves as a society to never again experience such a terrible situation. All opposition leaders made their St-Jean-Baptiste day remarks.

Marguerite Blais, Minister of Seniors and Caregivers, yesterday introduced a Bill 56 to create the  first national policy for caregivers.  The bill was accompanied by a detailed government action plan and the creation of a Scientific Observatory on Caregiving. This bill will be discussed when the National Assembly resumes in the fall.

In order to reduce the tax burden on Quebeckers, the Minister of Finance, Eric Girard, announced the standardization of school taxes, a measure totaling $800 million. He still maintains his earlier estimate of a $12 billion to $15 billion deficit for the year. The minister pointed out that Quebec closed 40% of the economy during the pandemic and that the current economic stimulus measures are necessary. While committing not to raise personal income and other taxes, and not apply austerity measures to education and health, he forecast a return to balance within 3 to 5 years.

The government launched eight retail task forces on Tuesday. They will be chaired by recognized experts in the sector and will join the “Panier bleu” Board of Directors. The idea of creating a Poste Québec is an alternative being considered by the Minister of Economy and Innovation, Pierre Fitzgibbon.

A $750 million plan to help the tourism sector was unveiled Thursday.

The Minister of Labour, Employment and Social Solidarity and Minister responsible for the Mauricie region, Jean Boulet, has announced that 104 projects, 95 regional and 9 national, will share $54,894,500 million under the new Jeunes en mouvement vers l’emploi (JME) program.

Bill 61

The study of Bill 61, aimed at stimulating the economy of Quebec, did not proceed to the detailed study stage and is deferred to the fall. The opposition groups have been highly critical of it and have created a united front to challenge the bill, which is very rare. As a result, the Legault government tabled some 20 amendments on Thursday.

Among the proposed amendments, the government agreed to reduce the period of the health emergency to October 1, rather than indefinitely. With respect to natural environments, they added more planning with respecting the three stages: avoid, minimize, compensate. The initial wording in the Bill was limited to compensation.

The Commissioner of Sustainable Development submitted his report on June 10. The government’s Sustainable Development Strategy 2015-2020 called for greater use of eco-fiscality, eco-conditionality and eco-responsibility, in accordance with the Sustainable Development Act. The government is committed to using economic instruments to ensure a transition to a green and responsible economy, but in reality, the Ministry of the Environment has not put in place the “necessary conditions” to take advantage of these instruments and does not, as the Commissioner points out, have all the up-to-date data to make informed decisions.

ATLANTIC CANADA

Nova Scotia

Long-term care homes are opening to visitors on Monday as well as child-care centers opening. The province has announced plans to extend its state of emergency, running through to June 28th unless extended further.

New Brunswick

Today Education Minister Dominic Cardy presented to the province’s Return to School Plan. The plan details how the province anticipates K-12 education will function as students return to class in September 2020.

REACH OUT. WE’RE IN THIS TOGETHER

We know there is much uncertainty in a rapidly evolving and complex landscape. It’s times like these where we know how important it is to make the right decisions in order to help mitigate the impact of this global crisis on your organization, your employees and respond to a shifting public policy environment. We are tracking funding at all levels of government so please reach out if we can help you navigate the new reality.

As one of Canada’s most experienced teams of government relations, public opinion research and strategic communications advisors, we’re acutely aware you are navigating rapidly changing circumstances and we want you to know, we’re here to help. We can act as a sounding board, help you design specific strategies and adapt to new ways of doing business and emerging public policy.

Consistent, accurate and regular communication is essential. The team at Earnscliffe regularly works with our clients on how best to engage with their communities – whether in business as usual circumstances, in community engagement and community-building processes, or in crisis scenarios. If you have emerging needs in any of these areas, please don’t hesitate to reach out.

The current situation presents a strikingly more complex crisis environment than we have seen in our lifetimes.   Earnscliffe has the tools to safely, responsibly, respectfully and reliably conduct opinion research and give you a sense of the public mood. At this time, there is no reason to make decisions in the dark if opinion research can shed valuable light to develop strategies and test tactics.

Reach out. We’re in this together.

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