weekly rennie brief: March 27, 2020

THE WEEK IN REVIEW - 27 MARCH 2020

your rennie brief

what you need to know about the latest COVID-19 initiatives in canada

• In response to the anticipated disruptions caused by the spread of COVID-19, Canada’s federal government, the government of British Columbia, the Bank of Canada, and other institutions are taking steps to help mitigate the negative effects. • Each week rennie will publish a summary of the latest policy changes, financial market interventions, and other relevant actions introduced in the preceding week. • This summary includes all announcements up to 27 March 2020.

government of canada On March 25th, Canadian parliament passed an AID PACKAGE worth an estimated $107 billion in response to the current and anticipated economic consequences of the country’s COVID-19 response. The CANADA EMERGENCY RESPONSE BENEFIT (CERB) has been created, combining the previously-announced Emergency Care Benefit and Emergency Support Benefit aimed at providing assistance to those directly or indirectly impacted by the COVID-19 response. The CANADA FARM CREDIT facility will provide an additional $5 billion in lending capacity to farmers. Up to $192 million allocated to VACCINE DEVELOPMENT . The small- and medium-sized business WAGE SUBSIDY , previous set to 10% of employees’ wages, has been increased to 75%. A new SPECIAL EMERGENCY BUSINESS ACCOUNT , facilitated by the banks and guaranteed by the federal government, will provide interest-free loans (in the first year) of up to $40,000 to small businesses. All GST, HST, AND DUTY AMOUNTS OWING have been deferred to June 2020 (estimated value: $30 billion). government of british columbia The BC government has announced a $5 billion COVID-19 action plan, of which $2.8 billion would support individuals and services and $2.2 would support businesses. Key features of the plan include the following: As part of a new BC EMERGENCY BENEFIT FOR WORKERS programme, a one-time, tax-free $1,000 payment will be made to workers who are eligible for employment insurance (EI). Additionally, this will be made available to those who are self-employed or parents who are at home with their children. The Benefit will complement existing and additional benefits available to workers from the federal government. Effective immediately, all business can defer their EMPLOYER HEALTH TAX PAYMENTS until September 30th. The SCHOOL TAX levied on the business, light-industry, and heavy-industry property classes has been cut in half. This will provide $500 million in immediate relief for commercial and

industrial property owners, with savings to be passed on to tenants paying triple-net leases. All STUDENT LOAN REPAYMENTS have been put on hold until September. FILING AND PAYMENT DEADLINES for the provincial sales tax (PST), municipal and regional district tax, tobacco tax, motor fuel tax and carbon tax have been extended to September 30th. The BC government is also implementing a number of immediate measures impacting tenants and landlords including but limited to: A temporary RENT SUPPLEMENT that would off-set tenants’ rent payments by providing up to $500 per month (for up to three months) directly to landlords through BC Housing. Note that these funds are aimed at assisting renters (and by extension their landlords) that are facing financial hardship as a result of the COVID-19 crisis but who do not qualify for existing rental assistance programmes. To qualify, renters must show that they have experienced a loss of income (by formally applying for EI). The HALTING OF EVICTIONS would prevent landlords from ending tenancies for any reason (except in exceptional health/ safety circumstances). Additionally, the enforcement of existing eviction notices by the RTB have been halted (again, except in extreme cases where there are safety concerns). Beginning April 1st, ANNUAL RENT INCREASES will not be permitted for as long as BC is operating under its state of emergency protocol. bank of canada The Bank has announced a new PROVINCIAL MONEY MARKET PURCHASE (PMMP) program that will support the liquidity and efficiency of provincial government funding markets by acquiring provincially-issued money market securities through the primary issuance market. The OVERNIGHT TARGET RATE was slashed by an additional 50 basis points on March 27th, to 0.25%, matching its all-time low. The Bank will begin ACQUIRING GOVERNMENT OF CANADA SECURITIES in the secondary market at a rate of at least $5 billion/week, across the yield curve. This will continue until the economic recovery is well underway.

For further information please contact Ryan Berlin (rberlin@rennie.com) or Andrew Ramlo (aramlo@rennie.com). The information set out herein (the “Information”) is intended for informational purposes only. RAR & RMS has not verified the information and does not represent, warrant or guarantee the accuracy, correctness and completeness of the information. RAR & RMS does not assume any responsibility or liability of any kind in connection with the information and the recipient’s reliance upon the information. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information may change any time without notice or obligation to the recipient from RAR & RMS.

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