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 plan aims to support workers, employers, and households now to quickly restart the economy later

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’re 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 has been extended to December 19, 2020 with significant changes to the program. CECRA has been extended for one more month – July – while the Canada Emergency Business Account (CEBA) has expanded criteria to include organizations with a payroll of $20,000 or less. The Canada Emergency Response Benefit for workers has been extended for eight additional weeks. 

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.

$305 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. An additional $75 million in funding was announced on May 21, 2020 for Indigenous organizations providing services to Indigenous peoples in urban centres and off reserve. This new announcement will support community-based projects addressing critical needs as well as support elders, transportation, and educational materials for Indigenous children and youth.

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 on July 13, 2020.

This is a hotline service for small businesses, including nonprofits and charities, who need financial planning advice and may not have access to an accountant. Advisors will answer questions about tax regulations and the implications of COVID-19, inform nonprofits and charities about government support programs that best fit their unique circumstances, and provide strategic financial planning for recovery. 

It is bilingual, available for four-weeks (7/days a week from 8am-8pm), and is operated by the Canadian Chamber of Commerce.

Hotline: 1-866-989-1080

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

To support workers during the pandemic, the federal government is using pre-existing Employment Insurance (EI) benefits and has introduced a new benefit for those who do not qualify for EI, the Canada Emergency Response Benefit (CERB). The policy response 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.

Below are the current federal supports available to workers. Most recent supports were announced June 16, 2020.

This program is for employed and self-employed workers who have paid into the EI system, but who cannot access paid workplace leave.

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

To qualify for this EI benefit, workers have to be employed in insurable employment, their normal weekly earnings have to be reduced by more than 40 per cent, and they must have worked at least 600 hours in the previous year. For this particular EI benefit, there is no waiting period nor is a medical certificate required. It is available immediately.

Workers will receive 55 per cent of their average weekly earnings where the salary cap is $54,200 and amounts to a maximum of $573 per week for up to fifteen weeks.

Workers who have paid into the EI system and are not sick but have reduced hours or lost their job due can apply for EI regular benefits or the new CERB outlined below.

This benefit is for workers who do not qualify for EI.

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

This is a taxable benefit of $2,000 a month, available for up to six months, between March 15, 2020 to October 3, 2020. It can be claimed until December 2, 2020. It will be paid every four weeks. Workers can earn up to $1000 while collecting the CERB.

Workers who are currently receiving EI regular and sickness benefits can apply for CERB if their benefits end before October 3, 2020 and they cannot return to work because of the COVID-19 pandemic. Workers who qualify for EI can receive CERB now and apply for EI benefits afterwards. Workers who have already applied for EI sickness benefits will be automatically assessed for 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 and people have begun receiving their first CERB payments.

Analysis

While criteria regarding the circumstances in which workers can apply for the EI sickness benefit have been changed for the COVID-19 outbreak, all other criteria to qualify for EI, as well as its benefit rate, remain the same. This EI benefit can be topped-up by employers through a registered Supplemental Unemployment Benefit. The CERB addresses some recommendations from the sector and beyond to modernize Employment Insurance – albeit the benefit is supplementary and temporary. It is important to note that since workers who qualify for EI can access CERB first and then EI, they can get an additional fifteen weeks of benefits, depending on how the pandemic evolves.

CERB is helpful for women workers (80 per cent of the sector’s workforce)

The CERB is helpful for workers in the nonprofit sector who need to take time off to care for others (a responsibility disproportionately affecting women workers), especially given this time when schools and daycares are closed and household members may be contracting COVID-19. It is also helpful for those who do not have access to work-from-home options (e.g., residential or home care workers) or paid workplace leave. It is essential for those facing reduced hours and job loss.

Broad qualification criteria captures workers who do not qualify for EI

Broken down, the earnings criteria of $5,000 in the previous year is equivalent to approximately working 360 hours for a $14 minimum wage, which is the threshold many EI modernization advocates have recommended. These provisions were also part of ONN’s EI maternity and parental leave benefit modernization asks. Although the benefit is a flat payment, it is calculated using a similar benefit rate (slightly less) than the current EI rate of 55 per cent of average weekly earnings. In 2017/2018, the maximum weekly amount was $573 and the average benefit was between $480 for men and $423 for women.

The broad qualification criteria is particularly critical for those nonprofit workers who do not qualify for EI (e.g., contract, freelance, gig, or self-employed workers), and for those in subsectors not currently prioritized to receive emergency COVID relief (e.g., arts and culture, sports and recreation).

The April 15 announcements on changes to CERB further increased which workers can qualify for it. Now, those who are working reduced hours as opposed to being laid off (workers are able to earn a maximum of $1000 while collecting CERB), those who primarily received EI regular benefits in the previous year, and those who were unemployed before the pandemic and were looking for work but are unable to find employment as a result of COVID-19 are eligible for the CERB. Those that were primarily receiving EI sickness and special benefits in the previous year and have not earned $5000 are still not eligible for CERB.

Earning an additional $1000 on CERB is helpful

The provision that enables workers to earn a maximum of $1000 while collecting CERB gives nonprofit employers the opportunity to retain workers for reduced hours and workers the flexibility in managing household expenses and caregiving responsibilities.

CERB may be better for low-income workers in high-risk workplaces

At first glance, CEWS allows for workers to retain more of their wages (75 per cent) than CERB (roughly 55 per cent and equivalent to $13 minimum wage and for those who are able and find part-time work to earn an extra $1000 it is equivalent to $20/hour). However, CERB is a flat amount rather than a percentage of workers’ wages which is better for low-income workers as they can generally retain more income. The increase in income that comes from returning to work at a workplace that is receiving CEWS might not be worth the risk in high-exposure workplaces where work is low-waged and low-valued.

Barrier to return to work is not the CERB but lack of decent work

The contention that CERB is making it difficult for enterprises to bring back workers should be framed as an issue of decent work for workers. Decent work includes, in the context of a pandemic, access to adequate personal protective equipment, heightened workplace safety measures, paid sick days, and living wages for essential work that is currently undervalued. Decent work, in the context of a pandemic, ensures essential service nonprofits retain staff and remain open to continue delivering services in communities.

We are seeing a growing crisis in certain parts of the nonprofit sector, particularly in human service areas that are funded by governments (outside urgent healthcare institutions) where frontline workers are risking their lives to go to work, often without adequate PPE and for wages that are insufficient to keep workers in community settings rather than opting to work in higher-paid institutional settings — or to stop working altogether and receive federal relief. Status quo funding rates and pay structures have created long-standing recruitment and retention challenges in many nonprofit settings — these challenges have now become a full-blown crisis.

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

The new temporary power granted to the Minister of Employment and Social Development Canada (ESDC) to make changes to EI during the pandemic signals that the government may utilize the EI system to mitigate further employment downfalls as the pandemic evolves. This is important to note for many in the sector who have been advocating to modernize EI and for sector workers and employers as another potential avenue for security.

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