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December 14, 2021

Your CFA Update on COVID-19

Federal Economic and Fiscal Update Released

Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released the Economic and Fiscal Update 2021. The statement is basically its a stand-pat document that focuses on the nation’s finances and updates Canadians on the government’s plan to finish the fight against COVID-19.

The federal government’s final deficit for 2020-21 is lower than projected in Budget 2021 at $144 billion, down from estimated $154 billion. To date the federal government has spent $511 billion on the pandemic.

According to the Minister, the plan is working:

·         Canada has exceeded its goal of creating a million jobs

·         Canada has the second-fastest jobs recovery in the G7

·         Canada has recouped 106% of the jobs lost at the depths of the pandemic (compared to only 83% in the US

·         Canada’s GDP is expected to return to pre-pandemic levels by the first quarter of 2022.

 

Canada has a world- leading vaccination campaign with 84% of the eligible population (five years of age and up) having received their first dose, but the Omicron variant of concern is a reminder that work remains to end the pandemic. The Economic Update outlines federal pandemic investments to:

·         ensure booster shots are available, free of charge, to all eligible Canadians

·         procure pediatric vaccines for all eligible children

·         provide millions of rapid tests to provinces, territories, and Indigenous communities, for free

·         secure COVID-19 therapeutics; support a standard proof of vaccination credential in all provinces and territories; and more.

 

HASCAP Extension: The federal government is extending the Highly Affected Sectors Credit Availability Program to March 31, 2022. This program was set to expire on Dec. 31, 2021.

Working to address Supply Chain challenges: To help strengthen supply chains and address bottlenecks, the federal government will launch a new, targeted call for proposals under the National Trade Corridors Fund to assist Canadian ports with the acquisition of cargo storage capacity and other measures to relieve supply chain congestion. The fund will dedicate up to $50 million to support eligible priority projects. Further details on the targeted call for proposals will be announced in the coming weeks.

Labour Availability: The federal government is proposing to allocate $85 million in 2022-23 toward processing more permanent resident and temporary resident applications and reducing immigration processing times for key areas of the economy affected by the pandemic. It will also speed up the process to citizenship for the many permanent residents already contributing to building a stronger Canada.

In response to rising labour shortages, the federal government has reasserted its commitment to increase immigration levels and reduce backlogs to help alleviate pressure. The federal government has also committed to bring forward a more targeted strategy to address labour shortages in the new year.

Paid Sick Leave: the government is moving forward with 10 days of paid sick leave for workers in federally regulated workplaces.

Tourism & Hospitality: A new $60-million fund will deliver support for workers in the live performance sector. Targeted support programs will continue to provide wage and rent subsidies to tourism and hospitality businesses, as well as organizations that are facing deep and enduring losses. To help address labour shortages and help businesses grow, the government is taking action to reduce immigration processing backlogs. 

Inflation: Factors like global supply chain disruptions and climate change impacts are driving up the prices of energy, groceries, and other everyday goods. Yesterday, the Government of Canada renewed the Bank of Canada’s 2% inflation target to help ensure that the current inflation rate does not become entrenched. The government is committed to making life more affordable for the middle class and those working hard to join it, including through significant investments in early learning and childcare that will save young families thousands of dollars a year.

New Small Businesses Air Quality Improvement Tax Credit

The Economic and Fiscal Update includes a new Small Businesses Air Quality Improvement Tax Credit of 25 per cent on eligible air quality improvement expenses incurred by small businesses to make it more affordable for them to invest in safer and healthier ventilation and air filtration.

Businesses would receive the credit on eligible expenses incurred between September 1, 2021, and December 31, 2022, related to the purchase or upgrade of mechanical heating, ventilation and air conditioning (HVAC) systems and the purchase of standalone devices designed to filter air using high efficiency particulate air (HEPA) filters, up to a maximum of $10,000 per location and $50,000 in total.

Eligible Entities

Eligible entities include unincorporated sole proprietors and Canadian-controlled private corporations with taxable capital employed in Canada of less than $15 million in the taxation year immediately preceding the taxation year in which the qualifying expenditure is incurred. The taxable capital of associated corporations is also counted. The credit would also be available where qualified expenses are incurred by a partnership.

Click here for more information on the Small Businesses Air Quality Improvement Tax Credit

CFA Action: CFA is working to clarify how the cap will be applied (corporate entities, CRA tax accounts, etc.) to ensure franchised businesses can take full advantage of the new credit.

Enhanced Home Office Expense Deduction

The Economic and Fiscal Update also includes an enhanced Home Office Expense Deduction which will extend the simplified rules for deducting home office expenses and increase the temporary flat rate to $500 annually. These rules will apply to the 2021 and 2022 tax years.

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Bank of Canada renews 2% inflation target, adds jobs to mandate

The Bank of Canada will maintain its 2 per cent inflation target for the next five years, but has formally been given license to moderately overshoot it to “support maximum sustainable employment.”

In a mandate renewal released jointly with the Canadian government on Monday, the government directed the central bank to use monetary policy to boost employment levels as long as those efforts don’t jeopardize the broader objective of stable prices.

The move effectively gives Governor Tiff Macklem more latitude to keep interest rates lower than what they would have been had the focus remained squarely on the inflation number -- though the central bank and government argued the new mandate only formalizes what was already an implicit part of recent Bank of Canada policy. At a press conference in Ottawa, both Macklem and Finance Minister Chrystia Freeland said there was no real change in the framework that will guide rate decisions. 

Most economists reacted positively to the news because the Bank had already been taking employment into account throughout its pandemic supports and quantitative easing decisions.

Trudeau, premiers to discuss new measures to contain omicron variant this evening

Prime Minister Justin Trudeau is scheduled to speak with Canada's premiers tonight at 6 p.m. ET to discuss the possibility of stricter public health measures in response to the omicron variant.

Quebec to roll out rapid tests in pharmacies, urges people to work from home as omicron looms

Quebec will begin rolling out 10 million rapid tests in pharmacies across the province as of Monday and is asking people to once again work from home, as cases and hospitalizations have seen a sharp rise in the past week. 

Dubé said health officials are monitoring the situation and the possible impact of the omicron variant ahead of the holidays, when groups of 20 are supposed to be allowed to gather. Dubé hasn't said whether those gatherings will still be allowed. 

He announced Tuesday that employers should immediately once again prioritize work from home. 

Dubé said the variant is believed to be two to three times more contagious than the delta variant, and that non-vaccinated people are more at risk of being infected and of developing complications.

Ontario is recruiting 100 international entrepreneurs to start or grow businesses

Ontario is recruiting 100 international entrepreneurs to start or grow businesses in regions outside of the Greater Toronto Area that have been hit hard by pandemic job losses through the Entrepreneur Stream of the Ontario Immigrant Nominee Program (OINP). This initiative will create more local jobs in a variety of sectors including information technology, life sciences, and tourism while bringing new investments to cities and towns often overlooked by entrepreneurs.

Through this two-year project, international entrepreneurs will be able to purchase or start new companies, hire local workers and drive economic growth in their new communities.

Each entrepreneur who is selected will be required to invest a minimum of $200,000 into their business – generating at least $20 million for Ontario’s economy. The project will prioritize applications from entrepreneurs looking to start or grow their business outside of the GTA, especially in communities hit hard by job losses resulting from COVID-19.

The Entrepreneur Stream of the Ontario Immigrant Nominee Program was initially established in 2015, only two nominations have been made to date. To improve this program, this project will better support entrepreneurs that apply and help connect them with business opportunities that best fit them.

New chair appointed for BC Labour Relations Board and Employment Standards Tribunal

Jennifer Glougie has been appointed as the new chair of the BC Labour Relations Board and the Employment Standards Tribunal.

The appointment was announced by David Eby, Attorney General, following a merit-based recruitment process.

Glougie holds a law degree from the University of Victoria and a PhD in linguistics from the University of British Columbia. She is a member of the Law Society of British Columbia and the Canadian Bar Association, as well as the Canadian Linguistics Association, the International Association of Forensic Linguists and the International Law and Language Association.

As part of her private practice, Glougie was involved in labour education through the Canadian Labour Congress and various labour councils throughout the province. Glougie has served as associate chair of the BC Labour Relations Board since May 2018.

Glougie will take over as chair from Jacquie de Aguayo, whose term ends Feb. 4, 2022. 

Manitoba Pandemic Paid Sick Leave Program extended

Manitoba Pandemic Paid Sick Leave Program, established to help cover the costs of employee sick leave related to COVID-19, is being extended until March 31, 2022, Finance Minister Scott Fielding announced today.

Announced in May, the voluntary program provides eligible employers with up to $600 per employee for a maximum of five full days (40 hours) of COVID-19 related sick leave. Eligible sick leave for the program related to COVID-19 includes testing, vaccinations and side effects, self-isolation due to COVID-19 symptoms or care for a loved one in any of these circumstances.

The federal program covers up to four weeks of leave and requires eligible individuals to apply for leave and wait approximately one week for payment. Under Manitoba’s program, employees are paid on schedule and employers can request partial reimbursement from the province.

Eligible employees are those who live in Manitoba and work and receive wages here on a full-time or part-time basis. To date, the program has received approximately 4,250 employer applications representing 16,300 workers, totaling $5.2 million in benefits, with $275 as the average benefit per eligible worker.

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COVID-19's impact on the world is creating waves across all sectors and industries.

Every member of the CFA community is dealing with an issue that is affecting the world, our industries, our communities, our businesses, and our people.

We would like to hear from you if you have any topics, issues or questions to navigate turbulent times in order to support you further: 

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