A recession is looming; and what you should know about financial help from the government
With North America now being the epicenter of Covid-19, government-mandated mass closures and self-quarantine has pretty well put all of our lives on hold for the past few weeks- and this has had a significant negative impact on our economy. As the virus continues to spread, people have hunkered down for the long haul, with some experts saying that we might be on lockdown for the rest of the summer. If so, this will have certain devastating impacts on our economy.
Over a span of just one week, Canada saw over 1.1 million claims for Employment Insurance filed. This amount exceeds the per capita number of EI applications filed during The Great Depression. As non-essential businesses have been ordered to close, small businesses are being hit the hardest as they see their sales dry up. Most small businesses do not have the liquidity to survive several months of closure. In turn, they have been forced to temporarily or permanently lay off many of their employees. A frightening potential scenario currently being floated is where both people and businesses are unable to pay their rent, landlords/owners would then not be able to cover their mortgages- and you would see a chain reaction resulting in mass mortgage defaults and an economic collapse worse than the sub-prime lending crisis of 2008.
Gearing up for a potentially long and harsh recession, the Canadian Government is preparing to run a record-setting deficit exceeding $110 BILLION this year. A large chunk of that would be in deferred tax payments- as they have extended the deadline to file income tax- however, what people MUST remember here is that their payments are NOT being cancelled- they are just being put off for further down the road- so you will still owe for them when the time comes, PLUS any interest accrued since then.
The good news is- in these dark and uncertain times, the Canadian Government is offering financial relief in all forms- to both businesses and individuals. The single most important government credit that people must know about is the Canada Emergency Response Benefit- which offers $2000 per month for up to 4 months. This benefit is for ALL Canadians who have lost their employment income due to Covid-19- and it does NOT matter whether you actually have Covid-19 or not; you can qualify for it regardless. The government is planning to kick off applications for the benefit on Monday April 6- the website to apply has yet to be made public- so please continue to monitor your local news media for information. There are also currently a host of financial resources available for both Canadian businesses and individuals, which can be found here: https://www.canada.ca/en/department-finance/economic-response-plan.html
Right now, there is a lot of uncertainty around our economy. We do not know if this virus could be gone in three weeks or three months. With a recession now almost inevitable, the Government of Canada has taken steps to cushion the blows and ensure Canadians’ pocketbooks are impacted as minimally as possible- so please do your own research to identify what benefits you and your family can quality for. And as always, the folks at Apaylo wish all of you nothing but the best in these tough times. We will all emerge from this together, stronger.