As we navigate through this extraordinary situation together, the Atlantic Business Federation remains committed to providing you with all the relevant information and resources on government assistance programs as they become available. We understand that these are challenging times, and we would like to do all that we can to help our clients and members. Due to the fluid nature of the situation, the data provided in this email may become quickly outdated, but stay tuned to the various websites below to keep up with the newly added programs to protect the financial well-being of Canadians and the economy.
The two critical links from the Government of Canada you should bookmark are:
We recognize that this is an uncertain point in time for businesses and that many organizations have been negatively impacted. To ensure that you are aware of the programs and assistance available to you, please see below for some of the Federal programs that are currently being offered to employers specifically:
1) EI - Employment Insurance
https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html; Visit the EI sickness benefits page to apply
Please note that there are key differences if you have contracted the virus and are in quarantine. To understand how different scenarios are treated, please read everything thoroughly. Contact the following numbers only if the above quarantine condition applies.
· Telephone: 1-833-381-2725 (toll-free)
· Teletypewriter (TTY): 1-800-529-3742
2) Work-Sharing (WS) Program - Adjustment program designed to help employers and employees avoid layoffs when there is a temporary reduction in the average level of business activity that is beyond the control of the employer. Special measures have been taken to extend agreements from 38 weeks to 76 weeks across Canada for those affected in the forestry, steel and aluminum sector.
The link above covers details on special protocol around waiting periods, length of coverage and eligibility
For information on the application process visit: Applicant guide for the temporary special measures
Submit using the following methods:
Western Canada and Territories
3) Additional links for the government’s economic plans:
Canada‘s COVID-19 Economic Response Plan
EDC stands ready to support Canadian exporters impacted by COVID-19
The Government of Canada is taking exceptional measures to minimize the impact of the current situation on Canadians and are continuing to work diligently to find solutions. Atlantic Business Federation is committed to doing its part as well and will continue to update you as we learn more. Please do not hesitate to reach out to us for more information or any concerns. Stay safe and healthy.
Atlantic Business Federation
1 844 940 5927
As part of the provincial response to the COVID-19 pandemic, Government has announced a new Emergency Contingency Fund as an initial step to help support Island businesses.
Please call the toll-free support line 1-866-222-1751 between 8:00 a.m. to 8:00 p.m. Monday through Friday.
Staff on the phone lines are collecting contact information from businesses and noting their concerns to help begin the development of program supports from the contingency fund.
We are currently experiencing a high volume of calls, but want to assure Islanders we are working to address this demand and ask for your patience as we increase supports for this phone line.
Get Accurate Information
The situation with COVID-19 is rapidly evolving. Find accurate, up-to-date information, including when to seek help :
If the workplace is covered by a collective agreement, employers may consult with their collective agreement and discuss the matter with the union if there is some question on the interpretation of any of the leave and pay provisions.
Is an employer expected to lay their employee off during the 14 day quarantine period so they can access employment insurance (EI) benefits?There's no requirement for employers to terminate or lay off employees under the Employment Standards Act to create EI eligibility.
What are the ramifications if an employer does not pay their staff during this time?From the employer's perspective, under the Employment Standards Act there would be no ramifications, unless they are laying staff off or terminating staff.
Does the 14 day quarantine count as sick leave?Yes, under Government of Canada employment insurance rules.
Do companies have the right to impose their own policies related to employee leave during this time?Yes, so long as the policies are in compliance with the Employment Standards Act and other legislation (e.g. human rights or Occupational Health and Safety) and advice or directives from public health.
Does a business owner have the right to remove someone from their establishment who is not following public health’s recommendations? (e.g. not practicing social distancing) Yes, employers have the obligation to take every reasonable precaution to protect the occupational health and safety of persons at or near the workplace – see Occupational Health and Safety Act, s.12(1).
This involves assessing the risks of the workplace and taking appropriate action to either eliminate or, if that is not possible, to minimize those risks.
If an employer determines that someone is posing an undue risk to the health and safety of individuals in the workplace, they are obligated to address the risk. This could involve refusing to provide services to a person engaged in the risky behavior or providing adequate protection to their workers.
How does social distancing work for employees to customer? (e.g. someone working a checkout) Some jobs do not allow for the elimination of risks associated with social distance.
For example, cashiers may be required to work within the recommended two (2) metre distance. In these cases, the employer is responsible for providing personal protective equipment to minimize the risk, such as gloves if exchanging money, and adequate hygiene practices for people, spaces and equipment.
Are there any additional steps business owners should be taking to protect their employee’s health, as well as their own health? All employers and workers should follow the preventative guidelines set out by the Chief Public Health Office.
Where possible, employers should look into work from home options, social distancing workstations within the workplace and limiting face-to-face meetings with employees and clients to only that which is essential.
Are there any extra precautions for businesses in high-risk areas such as pharmacies? As with any place of employment, employers must assess the risks of their workplace and take appropriate action to either eliminate or minimize those risks. Businesses that provide health care services, such as pharmacies and clinics should review their protocols for reducing the risk of transmission or exposure to ensure that risks are minimized.
Employment Insurance Telephone Information Service
Coronavirus disease (COVID-19) –
Employment and Social Development Canada
EI Sickness Claims Online:
The Employment Insurance Telephone Information Service is an automated telephone service that provides recorded general information on the Employment Insurance program. It is available 24 hours a day, seven days a week.
To obtain information on your claim, you must speak with an Employment Insurance representative.
You can complete the following tasks by telephone:
The hours of operation are 8:30 a.m. to 4:30 p.m. local time, Monday to Friday.
The Department of Finance created shockwaves this week with its announcement that it will be revamping how insured mortgages are stress tested.
Now that the dust has settled, here’s a more in-depth look at the implications, as well as some industry reaction.
But first, a quick recap of what’s changing come April 6, 2020:
According to estimates from Mortgage Professionals Canada’s chief economist Will Dunning, yes.
He plotted his estimate of the typical “special offer” rate advertised by major lenders, and as recently as late-2018, the new qualifying rate would have been nearly 40 basis points higher than the new qualifying rate. Dunning notes, however, that it would be beneficial to have official data provided directly from the Canada Mortgage and Housing Corporation (CMHC) to remove some of the guess work from estimating the official average insured mortgage rate.
“Given the history, it’s highly possible that there will be future times when the new qualifying rate will be higher than the posted rate, but I don’t see that as important: the posted rate should never have been part of the mortgage stress tests,” Dunning told CMT.
How will the rate be calculated, exactly?
That’s still to be determined, at least publicly. The Bank of Canada says it can’t confirm if the new benchmark rate will be based on all insured applications (such as 2- to 4-unit properties, self-employed borrowers, second homes, rental properties, etc.) or just a core group.
How much of the mortgage market will be impacted by the stress test rate change?
As of 2018, insured mortgages accounted for less than a third of new mortgages. Although, the Office of the Superintendent of Financial Institutions (OSFI) announced it is also considering a similar change in its formula for stress testing uninsured mortgages (those with more than 20% equity). OSFI is currently accepting input from stakeholders by email until March 17, 2020.
How much does it help the average buyer? There’s no question the new formula for stress testing insured mortgage will help many buyers who are currently just on the cusp of being able to pass the stress test.
Consider that the current stress test rate of 5.19% is a full 283 basis points higher than the lowest available insured mortgage rate on the market.
The new formula will narrow that gap by 30 basis points after April 6. This will decrease the income required to buy a $300,000 home by roughly $1,500, assuming a 5% down payment and 25-year amortization.
Alternatively, it will allow those who can easily pass the stress test to purchase about 5% more home. As Ron Butler of Butler Mortgage Inc. told us, “Someone who qualified for a $500K mortgage (previously) will qualify for $525K in April.”
Does the move go far enough to help buyers? It depends on who you ask. Industry representatives say the changes are welcome, but that there’s still room for improvement to assist young and aspiring homeowners struggling to enter the housing market.
“A stress test at 4.89% is better than one at 5.19%, but this test threshold is still too high, for several reasons,” MPC’s Chief Economist Will Dunning told CMT.
“Most importantly, the tests fail to acknowledge that by the time of a renewal in five years, the borrower’s income will have increased, usually by more than 10%, and they will have more capacity to make payments. The calculations should, but don’t, take this into consideration.”
Dunning adds that after a five-year term of the borrower faithfully making payments, the outstanding principal will have been reduced by 14-15%. “The design of the test doesn’t properly account for this, and therefore it over-estimates how much the payments would increase. And, it increasingly looks unlikely that rates will rise by anywhere near the 2 percentage points that the revised test will assume.”
Paul Taylor, President and CEO, Mortgage Professionals Canada told BNN Bloomberg that he’s not sure if the change will help qualify a “tremendous” number of additional buyers.
“It certainly will help some folks on the margin,” he said. “But it’s certainly good news for the marketplace from a policy perspective.”
Taylor added the association would like to see the test closer to 75 basis points above a buyer’s contract rate (as opposed to 200 bps) based on calculations that take into account income growth and mortgage principal payment over the term of the mortgage.
Responding to concerns of the change contributing to increased home prices, Taylor said this: “I think the lack of supply is really what is causing the increase in those prices. There are just far more people than there are housing products available for them. This particular change…is not really going to affect the prices in isolation. I think it’s the rest of the dynamics in the market that are going to create the increases that everybody is expecting.”
Industry Reaction to the Stress Test Change Here’s a selection of other viewpoints from across the industry on the stress test rate change:
Jason Stephen, President of The Canadian Real Estate Association (CREA)
“REALTORS have advocated for changes to the stress test on behalf of potential homeowners who have been sidelined, borrowers who have moved away from the regulated market to less-regulated options, and real estate markets across the country in need of relief. We are pleased the government has taken steps to address some of these issues in Canadian housing markets.”
Evan Siddall, head of the Canada Mortgage and Housing Corporation (CMHC):
“It’s worth noting that by changing the reference rate, authorities are recommitting to the merits of the stress test. The credibility of the measure is strengthened via this technical improvement. Calls to reduce the margin (from 200 to 75 bps) do not have traction at present.”
Rob McLister, Founder of RateSpy.com
“Will a looser stress test stoke the market? Absolutely. While it might boost buying power by just 3% or less (depending on what the new benchmark turns out to be, come April 6), the psychological boost will be material. Homebuyers—particularly younger buyers—are already worried about prices running away from them, given the double-digit gains of the last 12 months. News of an easier mortgage stress test won’t help.”
Doug Porter, Chief Economist, BMO Bank
Extending similar qualifying rate changes to uninsured mortgage stress testing could “put further upward pressure on prices, especially in markets that are already leaning to a sellers market.”
Bill Morneau, Minister of Finance (responsible for the latest qualifying rate change)
“We think these are positive moves to ensure that the approach remains effective for Canadians and that it also deals with changing market conditions…I think what’s important for us to ensure is that we continue to protect people’s most important investment. This will ensure that people only take on mortgages that are appropriate for their situation.”
To see rates and discuss the changes as it affects you please call 1 902 940 5927 or toll free 1 844 940 5927 - www.peimortgageservices.com.
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