Canada’s COVID-19 Economic Response – what’s in it for landlords?
The Government of Canada is taking action to help Canadians facing hardship as a result of the COVID-19 outbreak. Canada’s COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses.
Along with other action, the Government is taking these steps which are relevant to many tenants and the rental housing providers who provide their homes.
Temporary Income Support for Workers and Parents directly affected
- Waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits.
- Introducing a new Emergency Care Benefit providing up to $900 bi-weekly ($2,100 per month), for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to:
- Workers, including the self-employed, who are quarantined or sick with COVID-19, but do not qualify for EI sickness benefits.
- Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not quality for EI sickness benefits.
- Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.
Applications can be made in April, presumably including a retroactive payment
Longer-Term Income Support for Workers
For Canadians who lose their jobs [or self-employed income] or face reduced hours as a result of COVID’s impact,
- an Emergency Support Benefit delivered through the CRA to provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment.
Income support for low-income Canadians
- A one-time special payment through the Goods and Services Tax credit (GSTC) of close to $400 for single individuals and close to $600 for couples, by early May.
- An increase in the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child, as part of their May payment.
All these measures should help tenants pay their rents.
The Role of Financial Institutions
The Minister of Finance continues to encourage the heads of Canada’s large banks to show flexibility in helping their customers whose personal or business finances are affected by COVID-19. In response, banks in Canada have affirmed their commitment to working with customers to provide flexible solutions, on a case-by-case basis, for managing through hardships caused by recent developments. This support will include up to a 6-month payment deferral for mortgages.
What is missing
While these measures seem appropriate and helpful, a number of items important to residential tenants and landlords are unclear or missing. CFAA is communicating with the government to seek to ensure that:
- the banks’ flexibility in enforcing mortgages for homeowners will extend to rental housing providers;
- the Emergency Support Benefit will support those who were self-employed or working in the gig economy (as it seems it is meant to do);
- the federal government will share the costs of new and reasonable program of direct financial assistance to residential renters provided by any province, on a 50-50 basis; and
- consideration is given to the creation of a fund to which rental housing providers can apply for no-interest, no fee loans to fund their mortgage payments, property taxes, utilities or other expenses, if their tenants do not pay a significant portion of their rent as a result of the COVID-19 crisis.
CFAA’s letter to the government will be posted on the CFAA website soon.
- New Housing Accelerator FundDecember 15th, 2021
- CFAA Rental Housing ConferenceMarch 8th, 2020
- CMHC’s New Use Of Funds Rule For Insured BorrowingJune 18th, 2020
- CFAA Awards Program 2023 launches!February 21st, 2023
- Upcoming Webinar: National Economic Outlook with Benjamin TalJanuary 11th, 2023