Remarks by the Deputy Prime Minister and Minister of Finance on targeted COVID-19 support measures to create jobs and growth

Speech

October 21, 2021 -  Ottawa, Ontario - Department of Finance Canada

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Good morning, everyone. Thank you, Prime Minister.

When the COVID-19 crisis hit, our government rapidly rolled out a number of broad-based programs to respond to our country’s greatest economic shock since the Great Depression. The objective was straightforward: to prevent, insofar as possible, economic scarring and help workers and employers get through the pandemic and the restrictions it provoked. These programs have been a lifeline for workers and businesses across the country. They have protected millions of jobs, and helped hundreds of thousands of Canadian businesses keep going through the worst days of the pandemic. 

Our emergency measures were always designed to be temporary, to get us through the crisis.

Thankfully, we’re now in a new phase; one that is very different from the darkest times in our fight against COVID.

We have recovered lost jobs, vaccination rates are high – and will get higher as it becomes possible to vaccinate more of our children. Borders are reopening, and the fourth wave appears to be coming under control in many parts of the country.

Last month, we reached our goal, as promised in last year's Throne speech, of creating one million jobs. Canada has now recovered 100 per cent of the jobs lost in the depths of the COVID recession, compared to the United States, which has only recovered 78 per cent. Children are back in school. We have accomplished all of this together, while sticking to health restrictions that have saved lives. And by that essential measure, Canada is second only to Japan in the G7.

So, there are many reasons to be optimistic about what we've already achieved. Our economy is rebounding, and we are winning the fight against COVID.

However, it's also true that the recovery is uneven and that the health measures that are saving lives continue to restrict some economic activity.

That is why today we are announcing what we very much hope and believe is the final pivot in delivering the support needed to ensure a robust recovery. The existing income and business support programs will end on October 23rd, as previously announced. We are moving from the very broad-based support that was appropriate at the height of our lockdowns, to more targeted measures that would provide help where it is needed while prudently managing government finances.

I’ll now outline the new programs that we intend to put in place as of October 24th.

First, I will begin with our ongoing support for jobs and businesses. We will continue to focus relentlessly on jobs and growth. That is why we are extending the Canada Recovery Hiring Program until May 7, 2022, at a 50 per cent rate. This will help businesses continue to hire back workers and to create the additional jobs we still need for a full recovery.

We also recognize that some businesses are unable to fully reopen because of ongoing, and necessary, health restrictions. That is why we are proposing two new streams of targeted recovery support.

The first stream, the Tourism and Hospitality Recovery Program, would provide support through the wage and rent subsidy programs to employers. Here we are talking about hotels, restaurants and travel agencies that continue to face public health restrictions and limits on travel. The subsidy rate for this highly-targeted group of businesses would start at 40 per cent for applicants with a 40 per cent revenue loss, increasing in line with their revenue loss, to a maximum of 75 per cent.   

The second stream, the Hardest-Hit Business Recovery Program, will be available to employers who can show they have faced deep and enduring losses, and will provide support through the wage and rent subsidy programs. The subsidy rate for this group would start at 10 per cent for applicants with a 50 per cent revenue loss, increasing to a maximum 50 per cent subsidy for those with a 75 per cent revenue loss.

Support through both of these new streams would be available from October 24, 2021 to May 7, 2022. From March 13, 2022, to May 7, 2022, the support will decrease by half as we prepare for a full recovery and the end of these extraordinary pandemic-related benefits.

The eligibility for these programs will be a two-key system. One key will consider whether the employer has faced a significant revenue loss over the course of 12 months of the pandemic. The second key is revenue loss in the current month.

Finally, we are creating a new lockdown support program that will be available in case the pandemic requires further local lockdowns in any part of the country. For those businesses that face temporary local lockdowns, we will make the wage and rent subsidy programs available up to the maximum amount for the duration of the local lockdown. We are putting this insurance policy in place now to ensure that provinces, territories, and municipalities can continue to make the right public health choices knowing that support will be there for workers and businesses.

We are also committed to our election promise to provide support for arts workers and technicians.

Second, we are making adjustments to pandemic income support programs, to reflect the new phase of the recovery. As with the business support measures, we are moving from broad programs to more narrowly-targeted support.

We are still fighting the fourth wave of this pandemic and it is particularly virulent in some parts of the country. Temporary local lockdowns are still a possibility in the months to come. We want Canadians to know that we intend now to put in place a measure that would snap into action immediately to support workers in the event of a new local lockdown.

As the CRB has done up until now, the new benefit, the Canada Worker Lockdown Benefit, would provide $300 a week to workers who are subject to a lockdown, including those who are ineligible for Employment Insurance.

We also know that Canadians across the country may need continued support from the Canada Recovery Sickness Benefit and the Canada Recovery Caregiving Benefit. We all need to protect ourselves and one another by staying home when we're sick. And our children, many of whom still cannot be vaccinated, are particularly vulnerable, which means parents need to be able to stay home to take care of them.

So we are proposing to extend eligibility for both benefits until May 7, 2022. And we will increase the maximum duration of each benefit by two additional weeks.

We estimate the total cost of these measures, from October 24, 2021 through May 7, 2022 will be $7.4 billion. That compares to the $289 billion we have spent on income and business supports since the start of the pandemic.

Fighting COVID required unprecedented government spending, in Canada and around the world. Canadians supported that unprecedented spending because they understood that it was not only the compassionate thing to do, it was the economically smart thing to do. And they understood that providing support to businesses and workers during lockdowns allowed us all to do the right thing, together, and to save lives.

Today, as the economy is reopening and jobs are being created, as we are getting vaccinated and restrictions are carefully being eased in our communities and at our border, the time has come to adapt our income and business support measures to these happier circumstances.

Now, our support needs to be more narrow, more targeted – and less expensive. And we need to look forward to the day – now not too far off – when we will be able to bring it to an end entirely.

Our unrelenting objective is to protect and create jobs, and to drive economic growth. It is to ensure the strongest possible recovery for everyone.

Thank you.

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