Today, after an official announcement that Canada and the United States have restricted all non-essential travel between the countries, Prime Minister Justin Trudeau and Minister of Finance Bill Morneau also announced a variety of measures intended to economically assist Canadians during the COVID-19 pandemic.
Below is a summary of the employment-related measures that have been confirmed so far. This is a rapidly evolving situation and we anticipate further changes and clarifications in the coming days. We are monitoring the situation closely, and will continue to communicate updates as soon as they become available.
- Restrictions at the Border. Beginning “very quickly”, and for an indefinite period, Canada and the United States have agreed to restrict non-essential travel between the countries. This restriction is meant to prevent shoppers and tourists from travelling across the border, but is not meant to prevent travel for commerce. Also, employees who cross the border each day to work at hospitals or provide other essential services will be permitted to continue doing so. Finally, international students, workers on visas, and other temporary foreign workers will be able to enter Canada, although the government expects that they will follow guidelines to self-isolate for 14 days.
- Emergency Care/Support Benefit for Those Not Eligible for EI. Starting in early April, the government will implement an emergency care benefit for people who are not otherwise eligible for Employment Insurance (for example, those who did not have enough “hours” to qualify). The benefit, which is meant for those who are ill, are self-isolating or have to take care of a sick family member, will be available for up to 15 weeks and be comparable to what those who do qualify for EI would receive. Employees will be able to apply online to receive this benefit, and will not require medical evidence to apply. For those that would not otherwise qualify for EI, the government will also create an emergency support benefit for employees who lose their job or have their hours reduced.
- 10% Wage Subsidy for Small to Mid-Sized Employers. There will be a 10% wage subsidy for small to mid-sized employers for the next 3 months, up to $1,375 per employee and $25,000 per employer, to encourage employers to keep workers on payroll during this time. Employers who qualify include corporations that are eligible for the small business deduction, not-for-profit organizations, and charities.
- Tax Payment and Filing Relief.Canadians will not have to file their taxes until June 1, 2020. If they must pay taxes as a result of the return, they have until August 31, 2020 to pay that amount. The government will allow businesses to defer payments of income tax amounts until after August 31.
As the national response to the COVID-19 pandemic continues to rapidly evolve, employers are increasingly faced with around-the-clock challenges on how to support employees and their families in these unprecedented times. Planning for how to address the challenges and changes is essential to ensure that employers successfully navigate these difficult financial times calmly and effectively.
Please contact your Baker McKenzie lawyers (above) for more information.
You can also access our Coronavirus Resource Center for information on the impact of this situation on your business and what you can do to manage these risks. It covers areas of immediate concerns such as employer obligations, contract issues, supply chain disruption, financing and force majeure, as well as more forward-looking issues such as the practical impact of COVID-19 on transactions and IPO activity.