policy
06. policy The advent of the global pandemic early in 2020 triggered responses from all levels of government in Canada with the goal of providing households and businesses an opportunity to see their way through the economic downturn that would inevitably follow. Notable subsidies that were introduced include the Canada Emergency Response Benefit, the Canada EmergencyWage Subsidy, and the Canada Emergency Commercial Rent Assistance, as well as residential tenant and landlord supports here in British Columbia. Financial institutions also joined the fray, offering deferrals on mortgage payments for Canadian homeowners. Here, we present a summary of some of these new and emerging policies, as well as an overview of a couple of other notable policy-related changes that we can expect to see soon.
CANADA’S MORTGAGE DEFERRAL WINDOW CLOSING Beginning in March 2020, as some of the potential financial implications stemming from what amounted to an economy-wide shutdown came into focus, numerous
will have, by year-end, provided almost $60 billion to businesses to retain their employees through the downturn. While CEWS was recently extended into 2021, expectations are that CERB will wind down through the fall; as such, the continued re-animation of the Canadian economy will depend in part on the ability of the government, households, and private businesses to collectively transition towards a subsidy-free framework without disrupting growth. Needless to say, this will be easier said than done. “for customers whose mortgage deferrals have expired, 99% are current on their payments” as of the end of August. With an estimated 500,000 mortgages on payment deferral across Canada (equal to 10% of all outstanding mortgages), even a modest proportion of homeowners being unable to resume payments could create an elevated level of supply in certain markets, which in turn could slow the pace of price appreciation through the balance of 2020 and into 2021.
Canadian financial institutions permitted eligible homeowners to defer their mortgage payments for up to six months. Beginning in August, the so-called “deferral window” began to close, meaning the first mortgage holders to defer had resumed their payments. And the early returns have been positive: for example, Scotiabank noted that
WINDING DOWN THE FEDERAL FISCAL SUPPORTS While the Great Suppression has been without precedent in its manifestations on employment, gross domestic product, retail spending, and other features of our economic profile, it would have been much worse in the absence of government supports for households and businesses, which were implemented swiftly and effectively.
In Canada, support for households has been provided primarily through the Canada Emergency Response Benefit (CERB), to the tune of $80 billion to-date. Additionally, the Canada Emergency Wage Subsidy (CEWS)
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