COVID-19 Federal Policy

New: Read ONN’s call for a $680-million stabilization fund for Ontario’s nonprofit sector


Ontario COVID-19 Policy Updates

COVID-19 Resources for Nonprofits

Advocacy from the Nonprofit Sector

Sector Survey on Effects of COVID-19

Federal response to the COVID-19 pandemic

Contents:

Overview 
New money
Employer supports
Worker supports
Household supports
Conclusion 

Overview: Federal plans aim to support workers, employers, and households as the economy reopens

As the COVID-19 pandemic hit Canada mid-March and has evolved over the past four months, the federal government has announced, bolstered, and modified multiple programs to support workers, employers and households. In March 2020, the federal government announced their economic response plan and passed two key pieces of legislation. The first enacted the $107 billion COVID-19 pandemic aid package and the second the 75 per cent wage subsidy program. These legislations will expire September 30, 2020. On July 27, 2020 Bill C-20, An Act respecting further COVID-19 measures was passed to extend the Canada Emergency Wage Subsidy to December.

In May 2020, the federal government announced partnerships with provincial and territorial governments to implement the Temporary Wage Boost for Essential Workers and the Canada Emergency Commercial Rent Assistance (CECRA) programs. Also, applications for the federal government’s $350 million Emergency Community Support Fund for nonprofits and charities that deliver essential services opened through United Ways, community foundations and the Canadian Red Cross.

As Canada moves into a phased re-opening of the economy, we are seeing policy responses evolving to bridge shutdowns and re-openings for workers, employers, and households. The federal government’s most recent announcements are on extending and adapting previous supports announced.

The Canada Emergency Wage Subsidy (CEWS) program is extended to December 2020 with significant changes to the program. CECRA is extended for the month of July while the Canada Emergency Business Account (CEBA) is expanding  criteria to include organizations with a payroll of $20,000 or less. For workers, the Canada Emergency Response Benefit is extended to the end of September at which point people can either transition to Employment Insurance or to one of the three newly created recovery benefits. Temporary positive changes are easing Employment Insurance eligibility criteria. 

The federal government’s overall strategy to deal with the economic fallout of the pandemic is to provide immediate and temporary supports that:

  • Focus on keeping workers and employers linked during the pandemic so they can both help to restart the economy as soon
  • Are designed iteratively as the pandemic progresses
  • Are stackable so that people and organizations that need additional or different forms of help can get it (i.e., eligible households and employers can take advantage of multiple benefits primarily through existing channels, such as Canada Revenue Agency, Employment Insurance, and private financial institutions) 
  • Complement each other (i.e., employer, worker, and unemployment supports) 
  • Target particular demographic groups, communities and sectors so that supports address specific needs (e.g., Community support fund for nonprofits and charities)

Nonprofit Sector Advocacy

Thanks to nonprofit sector advocacy, the federal government has been including nonprofits and charities in their response plans, recognizing the sector’s critical value and needs that are different from other sectors. However, there is more work to be done. Limiting the damage to the sector and ensuring it weathers the pandemic into the recovery phase will depend on further federal and provincial funding to stabilize the sector. At the federal level, ONN is advocating alongside Imagine Canada for a Nonprofit Sector Resilience Fund and provincially for a sector stabilization fund.

Federal Supports

Nonprofits and charities stand to benefit, particularly from:

  • New funding for where needs have increased such as for food security, seniors, and gender-based violence
  • Critical employer supports, such as wage subsidies, interest-free loans, and rent relief 
  • Worker and household supports, such as the new Canada Emergency Response benefit for those in our sector who are forced to take time off and do not qualify for EI
  • Key legislation amendments that signal to sector advocates what future policy responses may emerge in the future

New money for social services

The federal government is supporting communities particularly vulnerable during the COVID-19 pandemic by increasing funding to nonprofits and charities providing essential services. Funding will assist in modifying services, managing and preventing outbreaks in facilities, and address other needs that may arise.

$350 million for nonprofits and charities that deliver essential services to those in need. The fund will flow through United Way Centraide Canada, Community Foundations of Canada, and the Canadian Red Cross to ensure money flows to organizations and communities quickly. It will support a variety of activities, such as: supporting seniors and people with disabilities during the pandemic; scaling up help lines that provide information and support; helping households access government benefits; providing training, supplies, and other required supports to volunteers; and replacing in-person, one-on-one contact and social gatherings with virtual contact. 

Applications for funding have opened as of May 19th. The Canadian Red Cross’ infographic highlights which intermediaries nonprofits and charities should apply to and for what. Below is a snapshot:

  • Non-profit organizations may apply to the Canadian Red Cross’ national portal here.
  • Registered charities and other qualified donees may apply to Community Foundations of Canada’s national portal here or to their local United Way Centraide here.
  • Community organizations of both types can apply to the Canadian Red Cross for training and equipment to help their staff and volunteers prevent disease transmission.

$500 million to establish a COVID-19 Emergency Support Fund for Cultural, Heritage and Sport Organizations to help address the financial needs of affected organizations within these sectors so they can continue to support artists and athletes. A majority of the fund will be administered by Canadian Heritage and be divided among departmental programs, Portfolio agencies, and delivery organizations. The remainder will be disseminated through the Canada Council for the Arts, Digital Citizen Initiative, Canada Media Fund, and Telefilm Canada.

$100 million to improve food security for people, including Indigenous peoples and Northern populations, facing challenges because of COVID-19. Funding will be provided to national, regional, and local organizations across Canada – including but not limited to Food Banks Canada, Salvation Army, Second Harvest, Community Food Centres Canada, and Breakfast Club of Canada. It will be used to purchase food and other basic necessities, help organizations find new ways to reach people in need, and buy or rent equipment and other materials to help address the unique needs of communities and the health-related challenges presented by COVID-19.

$9 million for United Way Centraide Canada to help seniors get groceries, medication and other critical items. The aid will also go toward assessing seniors’ individual needs and connecting them to the necessary community resources. An additional $20 million is being invested in the New Horizons for Seniors Program to support organizations that provide community-based projects.

$7.5 million for Kids Help Phone to provide mental health support to children and youth impacted by school closures and reduced access to social support and community resources.

$157 million for the Reaching Home initiative to continue to support people experiencing homelessness during the COVID-19 outbreak. The funding could be used for a range of needs, such as purchasing beds and physical barriers for social distancing and securing accommodation to reduce overcrowding in shelters. Funding will be disseminated through municipalities.

$50 million to support women’s shelters and sexual assault centres to help with their capacity to manage or prevent an outbreak in their facilities. This will be disseminated through Women and Gender Equality Canada, Indigenous Services Canada, Women’s Shelters Canada, and Canadian Women’s Foundation.

  • $535 million for a new Indigenous Community Support Fund to address immediate needs in First Nations, Inuit, and Métis Nation communities. It will be distributed through existing agreements with partners, including Friendship Centres. 
  • $75 million for Indigenous organizations providing services to Indigenous peoples in urban centres and off reserve. to support community-based projects addressing critical needs as well as support elders, transportation, and educational materials for Indigenous children and youth. 
  • 82.5 million in mental health and wellness supports to help Indigenous communities adapt and expand mental wellness services, improving access and addressing growing demand, in the context of the COVID-19 pandemic.

Analysis

Although the government is flowing money to nonprofits and charities as soon as possible, it may still have to rely on reserves or existing budget lines to mitigate the outbreak and meet increased demand in the interim.

The $350 million Emergency Community Support Fund is a welcomed support. However, it cannot substitute a sector-wide program that can assist most nonprofits and charities in weathering the pandemic now and its long-term impacts. Many of those in need of emergency support in our sector may not be on the frontlines delivering essential services, but are essential to thriving communities. We are supporting Imagine Canada’s call for a sector resilience grants program, join the efforts

Employer Supports

Below are the current federal supports available to nonprofits and charities. New supports and updates to existing supports have been announced on a rolling basis since March 27, 2020 with the most recent announcements made in August 2020.

The extended due date for incorporated nonprofits to file T2 corporation income tax returns and for nonprofits to file T1044 information returns is now June 1, 2020. Other deferrals that may apply to charities are noted on the Canada Revenue Agency (CRA) website.

Worker supports

Workers can access Employment Insurance regular and sickness (EI) benefits, the Canada Emergency Response Benefit (CERB), or one of the three Canada Recovery Benefits (Recovery, Caregiving, and Sickness) for support during the pandemic. Even given the new temporary changes to EI that have lowered eligibility criteria, the CERB is being replaced by the new Recovery Benefits for those who do not qualify for EI. 

The policy response takes into account the various impacts of COVID-19 on being able to work (shutdowns, caregiving, sickness) and the need to support those who do not qualify for EI. It establishes three avenues for workers to access supports during this time: (1) the workplace through paid leave or work from home capabilities, (2) EI or (3) the newly created CERB or Recovery Benefits.

Below are the current federal supports available to workers. Supports were updated in August 2020.

As of September 27, 2020, the EI program will temporarily (one year) lower qualification criteria for benefits

  • Number of hours needed to qualify for EI is set to 120 hours for regular and sickness benefits which is equivalent to 3.5 weeks of full-time work in the last 52 weeks. The EI unemployment rate – which governs the number of hours needed to qualify for EI in a region – for all regions has been set to a minimum of 13.1 per cent. So at the most workers will need 420 hours to qualify for EI and if they do not have 420 hours, the program will “credit” them 300 hours.
  • Minimum benefit rate is $400 per week ($240 for extended parental benefits)
  • At minimum 26 weeks of regular benefits are available
  • At minimum 14 weeks of best weeks of earnings are being used to calculate the weekly benefit rate
  • EI premium rate is frozen

Employment Insurance Sickness Benefits: For those who qualify for EI but cannot access paid workplace leave due to COVID-19 related sickness or caregiving. 

Workers can apply for this benefit if they are: 

  • Sick with COVID-19 or quarantined
  • Taking care of someone who is sick with COVID-19
  • Parents who have to stay home to care for children because of school and daycare closures

Eligibility Criteria:

  • Be employed in insurable employment
  • Have their normal weekly earnings reduced by more than 40 per cent
  • Worked at least 120 hours in the previous year

Workers receive:

  • 55 per cent of their average weekly earnings where the salary cap is $54,200 and amounts to a minimum of $400 per week 
  • Benefits for at least 26 weeks
  • No waiting period 
  • No medical certificate required

Canada Emergency Response Benefit (CERB): For those who do not qualify for EI but are facing job loss or reduced hours due to COVID-19

Workers can apply for this benefit if they are:

  • Sick with COVID-19 or quarantined
  • Taking care of someone who is sick with COVID-19
  • Parents who have to stay home to care for children because of school and daycare closures
  • Employed but are not receiving income because of disruptions to their work
  • Have lost their job due to the COVID-19 pandemic
  • Seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work as a result of COVID-19
  • Have exhausted their EI regular benefits and are unable to find a job or return to work because of COVID-19

Eligibility Criteria:

  • At least 15 years old
  • Reside in Canada
  • Have a valid Social Insurance Number (SIN)
  • In the previous year had a total income of at least $5,000 from either employment, self-employment, or EI maternity, parental or adoption benefits. 
  • Have stopped working for at least 14 consecutive days within a four-week period

Workers Receive:

  • Taxable benefit of $2000 a month paid out every four weeks
  • Available for up to 32 weeks between March 15, 2020 to October 3, 2020. It can be claimed until December 2, 2020.
  • Can earn up to $1000 while collecting CERB

Applications for the benefit opened on April 6, 2020 through the Canada Revenue Agency and My Service Canada online portals as well as over the phone.

Canada Recovery Benefit: For those who do not qualify for EI (e.g., self employer, gig workers), have exhausted CERB, and are facing job loss or reduced hours due to the COVID-19 pandemic.

Workers can apply for the benefit if due to COVID-19 pandemic:

    • Stopped working and are available and looking to work
    • Are working and have had a reduction in employment income

Eligibility Criteria

    • 15 years old
    • Earned $5000 in 2019 or 2020 which amounts to 360 hours at $14 minimum wage
    • Did not quit voluntarily
    • Attestation based
    • Need to look for and accept work when reasonable

Workers receive:

  • Taxable benefit of $400 per week for up to 26 weeks paid out every two weeks
  • Have to pay back the benefit if annual net income without the benefit is over $38,000 (excluding the recovery benefit) in the calendar year

Canada Recovery Sickness Benefit (paid sick leave): For those who do not qualify for EI (e.g., self employed, gig workers), have exhausted CERB, and are unable to work because they are sick or have to self-isolate 

Workers can apply for this benefit if due to the COVID-19 pandemic they have to miss 60 per cent or more of their scheduled work in the week because:

  • They are sick
  • Have to self-isolate themselves

Eligibility Criteria

  • 15 years old
  • Earned $5000 in 2019 or 2020 which amounts to 360 hours at $14 minimum wage
  • Attestation based
  • No medical certificate / sick note needed

Workers receive:

  • Taxable benefit of $500 per week for up to 26 weeks paid out every two week
  • 1 week waiting period
  • Have to pay back the benefit if annual net income without the benefit is over $38,000 (excluding the recovery benefit) in the calendar year

Canada Recovery Caregiving Benefit: For those who do not qualify for EI (e.g., self-employed, gig workers), have exhausted CERB, and are unable to work due to COVID-19 related caregiving responsibilities.

Workers can apply for this benefit if due to the COVID-19 pandemic they have to miss 60 per cent or more of their scheduled work in the week because of caregiving responsibilities:

  • Have to care for children under 12 because schools or child care are closed or they are at high risk or their usual caregiver is not available
  • Have to care for a family member with a disability or a dependent because regular their programming is closed or they are at high risk or their usual caregiver is not available

Eligibility Criteria

  • 15 years old
  • Earned $5000 in 2019 or 2020 which amounts to 360 hours at $14 minimum wage
  • Attestation based
  • Are not receiving pay from an employer
  • Are not receiving Employment Insurance benefits, CERB, any other Canada Recovery Benefits, short-term disability benefits, workers compensation, Quebec Parental Insurance plan benefits in the same week

Workers receive:

  • Taxable benefit of $500 per week per household for up to 26 weeks paid out every two weeks
  • 1 week waiting period
  • Have to pay back the benefit if annual net income without the benefit is over $38,000 (excluding the recovery benefit) in the calendar year

Household supports

To help households more generally, the government will be providing temporary top-up payments in April and May 2020.

Individuals who are certificate holders of the Disability Tax Credit, currently receive Canada Pension Plan disability benefits, Quebec Pension Plan disability benefits, or disability supports from Veterans Affairs Canada, as of June 1, 2020 will receive one-time, tax-free payments. This entails $600 for those that have a valid Disability Tax Credit certificate and $300 for those who have a valid Disability Tax Credit certificate and are eligible for the Old Age Security (OAS) pension or the Guaranteed Income Supplement (GIS).

Seniors who are eligible for the Old Age Security (OAS) pension will receive a one-time payment of $300 and those who are eligible for the Guaranteed Income Supplement (GIS) will also receive a one-time payment of $200. OAS and GIS payments will continue even if 2019 taxes have not been filed by seniors.

Families will receive two extra payments

Low-income families will receive a one-time extra payment.

The Minister of Employment and Social Development (ESDC) is authorized to make interim orders for mitigating the COVID-19 pandemic. Any changes made under this power will expire a year later, at the latest. Doctor’s notes are no longer required to receive any EI benefits. This provision will be repealed on September 30, 2020.

$500 million in one-time additional payments will be made to Provinces and Territories for the fiscal year 2019. Ontario will receive $193,721,000.

Analysis

It is under this temporary power granted to the Minister of Employment and Social Development Canada (ESDC) that changes to EI have been made to mitigate further employment downfalls as the pandemic evolves. 

The recent proposed changes to Employment Insurance (EI) – less number of hours required to qualify and a minimum floor for benefit rate and duration – and the creation of various Canada Emergency Benefits for those who do not qualify for EI are evidence that the EI program is not equipped to meet the needs of current and future labour market realities. There is no shortage of research on the need and how to modernize EI as jobs that are “9-5 with adequate wages and benefits” decline, precarious work increases, and disruptions of work due to technology edge closer. In fact, the COVID-19 pandemic has accelerated the arrival of the future of work where technology disrupts what people do (the number of and quality of our jobs), how they do it (the use of technology such as automation and artificial intelligence to do our work), and the skills needed to bridge the two. 

Conclusion

Federal policy responses to the COVID-19 pandemic are now moving from emergency to recovery as the economy opens up and pandemic impacts are continuously assessed. It is important for the federal government to continue to recognize and support nonprofits and charities during this transition and into the recovery phase. Despite the common misperception of nonprofits as merely filling in gaps left by the market and the state, the nonprofit sector is a major contributor to Canada’s economy and a large employer, far beyond its role providing services to the most marginalized people in our communities. The sector contributes 8 per cent of the country’s GDP and employs 2 million workers.

Next: ONN will be looking for a sector resilience grant program that takes into account the size, the various needs and the breadth of the sector (human services, arts and culture, sports and recreation, environment, faith groups, and more). Support will be required for organizations with varied business models, including organizations that receive grants and those that rely heavily on earned income such as social enterprises and the arts and culture sector.

We will continue to monitor policy announcements, update the sector, and advocate for supports for nonprofits and the communities they serve.

Nonprofits are in unprecedented times and are no doubt finding it difficult to plan for an unknown future. What we do know is that nonprofits are resilient, innovative, and nimble. Our sector must draw on these traits, while advocating for governments to recognize the value of our work. We encourage you to continue to strengthen your decent work practices, share and collaborate with peers when possible, and advocate for the needs of our sector and our communities. 

Resources

ONN COVID-19 resource page

ONN COVID-19 policy updates