September 24, 2020
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September 24, 2020

Your CFA Update on COVID-19

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Deeper dive into the Throne Speech – follow up from yesterday’s COVID Updates

As was outlined in yesterday’s CFA Update the Liberal Government presented a renewed policy agenda to Canadians. Following the Speech, the Prime Minister made a rare national television address to speak directly to Canadians, telling them that the Government will continue to spend to backstop jobs and businesses through the pandemic.

Commitments in the speech

  • Extending CEWS through to next summer
  • Expanding the CEBA loan program
  • CERB ending and EI changes
  • Banning single use plastics in 2021
  • Exceeding Paris 2030 climate targets
  • Accelerating steps toward a national pharma-care program
  • Canada-wide childcare program

What was missing

  • A new or revised commercial rent relief program

Opposition Reaction

The Official Opposition Conservatives immediately rejected the Throne Speech, saying that it was divisive, does not support middle class workers in the resource and small business sectors, and creates too much debt. The Bloc Quebecois will also vote against the Speech.

Holding only a minority position in Parliament, the Liberal Government will require the NDP’s support for the Throne Speech to remain in power. The NDP previously made its support conditional on the Throne Speech addressing income supports, housing, paid sick days, child care, and long-term care. All of those topics were spoken to in some way today, making NDP support more likely than not. However, the NDP did not announce its voting intentions after the Speech, setting up some nervous days ahead for the Government. The House of Commons rules allow for up to six days of debate before the required confidence vote on the Speech.

NDP Leader Jagmeet Singh told reporters after question period today, Singh called the boost to $500 a week from the proposed $400 a "major victory" for Canadians but added he still has concerns about how accessible the paid sick leave will be. He refused to explain in detail what he is asking for, saying that negotiations with the government are ongoing and those talks could affect the entire bill.

What’s Next

The House of Commons and Senate resume their normal sitting schedules as of today. However, an agreement reached by the Parties will allow for reduced quorum in the House, with remote participation and voting by MPs. House Committees are not scheduled to resume work until October 7 at the earliest. The Opposition will use its control of the House Committees to extract compromises in the Government’s policies and to reopen studies of the Government’s ethics.

Stakeholders should expect new Mandate Letters in the coming days, which will be key to understanding which Ministers are responsible for developing the new programs announced today.

For stakeholders whose issues were addressed in the Throne Speech, immediate engagement at the political and departmental levels is crucial to ensure that legislation and policies are developed quickly and with your views in mind. In addition to the many items mentioned in the Throne Speech, a variety of other initiatives like privacy and broadcast reform will remain on the legislative agenda.

Look-Ahead: Fall Fiscal Update

The Speech did not define the Government’s fiscal framework for a rapidly expanding policy agenda, after the previous ‘fiscal anchor’ of declining debt-to-GDP ratio was abandoned during the initial response to COVID-19. However, it is clear that the Liberals view significant Federal spending as an essential part of addressing the pandemic.

The Government is committed to updating the Federal COVID-19 Economic Response Plan this fall. While unlikely to be a full Budget, that update will set the Government’s new fiscal framework and allocate funding to many of the programs announced today. Given the Government’s rhetoric about the drawbacks of austerity, stakeholders should expect a high Federal deficit and spending as a percentage of the national GDP for the foreseeable future.

What This Means

The vision for government laid out by the Liberal Party’s Election 2019 policy platform remains intact, with the addition of fighting COVID-19 as the highest priority. With that crowded agenda in mind, the challenge for stakeholders will be ensuring that your issues are prioritized. It is very unlikely that a Minority Government could accomplish all of the goals set out in today’s speech.

BC PST Rebate on Select Machinery and Equipment

The B.C. PST Rebate on Select Machinery and Equipment is a temporary provincial sales tax (PST) program to help corporations recover from the financial impacts of COVID-19.

The program acts like a refund but is separate from the existing PST Refund process. Under this temporary program, corporations can apply to receive an amount equal to the PST they paid between September 17, 2020 and September 30, 2021 on qualifying machinery and equipment.

Qualifying Machinery and Equipment – For simplicity, Income Tax Act (Canada) capital cost allowance (CCA) class definitions already familiar to incorporated businesses will be used to establish which types of capital assets qualify for the rebate program. To be eligible for the rebate, eligible property must be:

  • described by the definitions found in Schedule II to the federal Income Tax Regulations, as they read on September 1, 2020, for CCA classes 8, 10, 12, 16, 43, 43.1, 43.2, 46, 50, 53, 54, and 55
  • obtained substantially (more than 90%) for the purpose of gaining or producing income, and
  • not excluded (as set out in the technical backgrounder)
  • Additionally, software and goods, other than goods obtained by lease, must be capital assets for the rebate to apply.

Detailed rules can be found in the Technical Backgrounder: B.C. PST Rebate on Select Machinery and Equipment.

You will be able to apply online starting April 1, 2021. More information about the application process will be released in the future.

Legislation Introduced to Extend Recovery Benefits

Today the federal government introduced Bill C-2, which includes the previously announced Canada Recovery Benefit, the Canada Recovery Sickness Benefit and the Canada Recovery Caregiver Benefit. In concert with other previously announced EI changes, these programs are part of the proposed package designed to replace the Canada Emergency Response Benefit (CERB), which is winding down.

Specifically, the legislation includes:

  • Canada Recovery Benefit (CRB) of $500 per week for up to 26 weeks, to workers who are self-employed or are not eligible for EI and who still require income support. This Benefit would support Canadians who have not returned to work due to COVID-19 or whose income has dropped by at least 50%. These workers must be available and looking for work, and must accept work where it is reasonable to do so;
  • Canada Recovery Sickness Benefit (CRSB) of $500 per week for up to two weeks, for workers who are sick or must self-isolate for reasons related to COVID-19. This Benefit supports our commitment to ensure all Canadian workers have access to paid sick leave; and,
  • Canada Recovery Caregiving Benefit (CRCB) of $500 per week for up to 26 weeks per household, for eligible Canadians unable to work because they must care for a child under the age of 12 or family member because schools, day-cares or care facilities are closed due to COVID-19 or because the child or family member is sick and/or required to quarantine.

More detailed eligibility criteria can be found online.

Ontario rolls out $1B updated testing and contact-tracing plan

Today, Ontario Premier Doug Ford said his government will invest $1 billion to expand testing and contact-tracing capacity heading into flu season, including some $30 million to "prevent and manage outbreaks" in priority settings like long-term care facilities, retirement homes and schools. 

The province's network of labs is currently facing a backlog of 53,840 test samples, the most since cases of the respiratory infection were first detected in January. 

During a media briefing Thursday morning, health officials said that publicly funded testing sites are moving away from offering tests to asymptomatic people. Instead, the province will return to a more targeted approach, as hospitals, testing sites and labs have reported being overwhelmed by public demand for tests.

Home prices across Canada could fall almost 7% in 2021, Moody’s predicts

Moody's 2021 home price index forecasts 6.7% decline for single-family homes, 6.5% drop for condos. According to a forecast by Moody's Analytics, Inc., there is a "dangerous" oversupply of new, single-family homes in Calgary and Edmonton, on top of affordability issues in Vancouver and Toronto, the financial intelligence company said in a report this week.

Moody's report did not go into detail on how it created the forecasts, but said that its 2021 home price index also calls for a 6.7 per cent decrease for single-family homes and a 6.5 per cent decline in condo apartments.

The prediction from Moody's comes after the Canadian Real Estate Association reported record-shattering home sales in July and August amid low mortgage rates.

CMHC echoes Moody’s forecast

But Moody's forecast says the real estate sector will lose its momentum in the first half of 2021, and it's not alone. Canada Mortgage and Housing Corp. economist Bob Dugan also predicted earlier this week that housing prices will fall going forward.

"Moody's Analytics expects that the shortlived burst of growth in the third quarter will produce too few job gains to meaningfully reduce unemployment," the report said. For instance, Moody's said that housing starts — a closely watched statistic that has rebounded sharply this summer — partly reflects investments made before the pandemic.

While home prices would fall in every region under Moody's model, the impact would be uneven and would favour small, affordable markets. While lower immigration may hurt condos in urban markets, Moody's suggested that buyers seeking more space may look to Oshawa, Ont., as prices rise in other Toronto suburbs like Mississauga.

New Brunswick's travel bubble with Quebec shrinks

The New Brunswick travel bubble will get even smaller Friday, when most of the Avignon Municipal Regional County in Quebec, which borders Campbellton, is removed.

Now residents from only two communities in the region, Listuguj First Nation and Pointe-à-la-Croix, will be allowed into New Brunswick without having to self-isolate. This change comes a week after New Brunswick restricted travel from the Témiscouata Municipal Regional County, which borders the Edmundston area.

Both the Témiscouata and Avignon regions formed a travel bubble with New Brunswick on Aug. 1, but now people from most parts of these two regions must have an essential reason for travel to get into the province and must self-isolate for 14 days.

Webinar Series On Demand


Impact of COVID-19 on Banks & Lenders: Now how do you approach the bank

SPEAKERS: Paul daSilva, RBC; Joseph Pisani, BMO Bank of Montreal; Tom de Larzac, HSBC Bank Canada; and, Mohammed Jehangir, CIBC

In this webinar, learn how COVID-19 has impacted how Canadian banks are looking at business loans and what additional information they need. What programs and services have banks introduced to serve SMEs and how can they be accessed? What is the impact of the pandemic on  a bank's risk tolerances? Have banks changed how they will lend and for what they will lend? Are loan losses as government support programs taper off expected to tighten loan approval requirements? How do I take advantage of changes in the marketplace? How do i grow my franchise?


CFA’s Business Recovery Summit Series

Stay up-to-date with the latest news and developments with Canada’s financial institutions at CFA’s Business Recovery Summit Series throughout the month of October, where speakers will present updates on financing and lending. Register here


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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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