Feds’ fiscal update promises more COVID-19 relief with extended wage and rent subsidies
Canada will see a $381.6 billion deficit this year, with the possibility of more pending further COVID-19 related lockdowns, said Finance Minister Chrystia Freeland in her fall fiscal update released late Monday.
The number is the result of the federal government’s COVID-19 aid package, which so far totals $490.7 billion.
Freeland said the government expects to spend $70 billion to $100 billion over the next three years to boost the country’s recovery from COVID-19, but that the full breakdown of funds is still to come. She expects one million jobs to be created as a result of the investment.
Wage and rent subsidy extensions
The government plans to increase the Canada Emergency Wage Subsidy (CEWS) from 65 per cent to 75 per cent from December 20, 2020 to March 13, 2021, and to extend the Canada Emergency Rent Subsidy to March 13.
This adjustment comes after the government had already extended the CEWS period to June 2021 during the speech from the throne earlier this fall.
The wage subsidy includes a base subsidy for all companies that have experienced a revenue drop, and a top-up wage subsidy for employers most adversely impacted by the pandemic. For the qualifying period, the base subsidy would remain at 4o per cent and the maximum top-up wage subsidy would increase to 35 per cent.
Furloughed employees will be eligible for a weekly wage subsidy between December 20, 2020 and March 13, 2021 to a maximum of $595.
Among the other line items pertinent to the manufacturing sector is a work-from-home tax credit up to $400 to help employees with “modest expenses.”
Vaccine manufacturing measures
An additional $126 million is going to a new bio-manufacturing facility at the National Research Council (NRC)’s Human Health Therapeutics Research Centre in Montreal, topping up the $44 million the government has already invested in the facility since the onset of COVID-19.
The funding will enable the NRC to increase vaccine manufacturing to up to two million doses per month.
A $23-million investment is also going to the NRC to support research and development for a COVID-19 vaccine and therapeutics, and $150 million is set aside for securing equipment and supplies for vaccine packaging once they are manufactured.
Tax cuts on face masks and shields
The government plans to exempt certain face masks and face shields made after December 6, 2020 from sales taxes (GST and HST).
The masks and shields must either be authorized for medical use or meet construction requirements that ensure they prevent the transmission of infectious viruses.
CME ‘welcomes’ allocations
Following Freeland’s fiscal update, the Canadian Manufacturers & Exporters (CME) association released a statement welcoming the stimulus package.
“Manufacturers are part of the solution, and we believe that we are well-positioned to work with government in helping to create those good, middle class jobs that Minister Freeland emphasized in her statement,” says Dennis Darby, president and CEO of the CME.
CME says that the extension of the wage and rent subsidies, plus an extra 25 per cent in support for businesses that had to close or limit their activities during a lockdown period, will assist the manufacturing sector.
“The global coronavirus pandemic has shown Canadians how important it is to have manufactured goods in Canada, including PPE and vaccines,” says Darby.
The CME also expressed support for the government’s $20-million plan to design a national childcare system, which it says will help to attract more women to jobs in the manufacturing industry.
Access the full 2020 economic statement here.