Key to economic recovery is 'getting money into people's hands': C.D. Howe
Hours after Prime Minister Justin Trudeau secured passage for his stimulus package, attention is turning to delivering on the measures amid a surge in demand for cash from Canadians.
Trudeau, speaking Wednesday at a press conference in Ottawa, unveiled a new income replacement fund for people affected by the COVID-19 pandemic. The program will provide $2,000 (US$1,410) a month to individuals who have lost income due to the coronavirus. The added measures will bring the value of the total package to $107 billion, the government said Wednesday, up from $82 billion initially announced last week.
Payments would run for as long as four months, and can be claimed by people regardless of whether they are eligible to receive unemployment benefits. The self-employed can also apply. This is a consolidation of existing programs announced last week, and broadened out to include people who are waiting for employment insurance claims to be processed.
Justin Trudeau arrives for a news conference outside his residence in Ottawa on March 24, 2020.
The government is racing to deliver emergency financial aid as a sudden halt to economic activity costs hundreds of thousands of Canadians their jobs, driving the economy into a deep recession.
“This is an unprecedented situation with an overwhelming demand by Canadians to get money as quickly as possible,” Trudeau said. “We need to make sure we’re getting that money out quickly but also reliably to Canadians and that means doing things that government hasn’t done before and scaling up our processes extremely quickly.”
The prime minister rallied opposition parties to support his COVID-19 response plan early Wednesday after debate over borrowing, spending and tax powers stretched talks late into the night. Now he needs to get cash to individuals and businesses to keep the economy afloat.
The government received a record 929,000 applications for unemployment benefits last week and had only processed 143,000 claims, Trudeau told reporters. It has also reallocated 1,300 civil servants from other parts of the government to help handle the claims.
An online system to receive applications for the new program should be in place by April 6 and payments should be dispersed 10 days after a claim is submitted, Trudeau said.
“The EI system was not designed to process the unprecedented high volume of applications received in the past week,” the finance department said in a statement. “Given this situation, all Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not, would be able to receive the CERB to ensure they have timely access to the income support they need.”
The new program will “hopefully simplify the application process” and the government should roll out more measures to help businesses survive COVID-19, Brian DePratto, senior economist at Toronto Dominion Bank, said in a note to clients.
Finance Minister Bill Morneau told lawmakers in the Senate on Wednesday that direct transfers to individuals and companies will total $52 billion, up from $27 billion. The cost of tax deferrals remain at $55 billion.
Trudeau is governing from home after his wife tested positive for the coronavirus nearly two weeks ago.
Medical authorities have reported 1,959 confirmed cases with 27 deaths, according to Health Canada.