Prime Minister announces additional support for seniors and large & medium-sized businesses

PM Justin Trudeau Provides Update on Federal Response to COVID-19 on May 12, 2020. /Global Korean Post

 

Prime Minister announces additional support for seniors and large & medium-sized businesses

 

May 12, 2020

Global Korean Post

 

The Prime Minister, Justin Trudeau, announced new measures to support businesses and a series of additional measures to help Canadian seniors over two days.

The federal government invested $1.3 billion in a one-time special payment through the Goods and Services Tax (GST) credit in April. More than 4 million seniors benefited from this top-up, which gave an average of $375 for single seniors and $510 for senior couples.

These measures include:

  • Providing additional financial support of $2.5 billion for a one-time tax-free payment of $300 for seniors eligible for the Old Age Security (OAS) pension, with an additional $200 for seniors eligible for the Guaranteed Income Supplement (GIS). This measure would give a total of $500 to individuals who are eligible to receive both the OAS and the GIS, and will help them cover increased costs caused by COVID-19.
  • Expanding the New Horizons for Seniors Program with an additional investment of $20 million to support organizations that offer community-based projects that reduce isolation, improve the quality of life of seniors, and help them maintain a social support network.
  • Temporarily extending GIS and Allowance payments if seniors’ 2019 income information has not been assessed. This will ensure that the most vulnerable seniors continue to receive their benefits when they need them the most. To avoid an interruption in benefits, seniors are encouraged to submit their 2019 income information as soon as possible and no later than by October 1, 2020.

Millions of Canadians pay their bills and feed their families by working for large and medium-sized businesses. The government will offer support to those businesses affected by COVID-19 based on a number of conditions.

To help protect Canadian middle class jobs, and safeguard our economy, the Government of Canada will :

  • Establish a Large Employer Emergency Financing Facility (LEEFF) to provide bridge financing to Canada’s largest employers, whose needs during the pandemic are not being met through conventional financing, in order to keep their operations going. The objective of this support is to help protect Canadian jobs, help Canadian businesses weather the current economic downturn, and avoid bankruptcies of otherwise viable firms where possible. This support will not be used to resolve insolvencies or restructure firms, nor will it provide financing to companies that otherwise have the capacity to manage through the crisis. The additional liquidity provided through LEEFF will allow Canada’s largest businesses and their suppliers to remain active during this difficult time, and position them for a rapid economic recovery.
  • Use key guiding principles in providing support through the LEEFF, including:
    • Protection of taxpayers and workers: Companies seeking support must demonstrate how they intend to preserve employment and maintain investment activities. Recipients will need to commit to respect collective bargaining agreements and protect workers’ pensions. The LEEFF program will require strict limits to dividends, share buy-backs, and executive pay. In considering a company’s eligibility to assistance under the LEEFF program, an assessment may be made of its employment, tax, and economic activity in Canada, as well as its international organizational structure and financing arrangements. The program will not be available to companies that have been convicted of tax evasion. In addition, recipient companies would be required to commit to publish annual climate-related disclosure reports consistent with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, including how their future operations will support environmental sustainability and national climate goals.
    • Fairness: To ensure support across the Canadian economy, the financing is intended to be applicable to all eligible sectors in a consistent manner.
    • Timeliness: To ensure timely support, the LEEFF program will apply a standard set of economic terms and conditions.
  • Expand the Business Credit Availability Program (BCAP) to mid-sized companies with larger financing needs. Support for mid-market businesses will include loans of up to $60 million per company, and guarantees of up to $80 million. Through the BCAP, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will work with private sector lenders to support access to capital for Canadian businesses in all sectors and regions.
  • Continue to provide financing to businesses through Farm Credit Canada, the BDC, and EDC, including through the Canada Account. This will ensure the government is able to respond to a wide range of financing needs, including for some large employers facing higher risks, with stricter terms in order to adequately protect taxpayers.
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