NATI Supports Stimulus Announcement – March 19, 2020
Prime Minister Announces COVID-19 Stimulus Package
Prime Minister Justin Trudeau announced an $82-billion stimulus package in response to the COVID-19 pandemic. The package consists of $27-billion in emergency aid for immediate help to Canadians and businesses as well as $55-billion in tax deferrals to help stabilize the economy. This announcement establishes a quick and strong response by the Federal Government and is a positive step towards maintaining the economic confidence of the public. Trudeau said that the supports aim to help Canadians pay for rent and groceries, to help businesses continue to meet payroll and pay bills and to stabilize the economy. The overarching message of the announcement was that the government will do whatever it takes to assist Canadians through this crisis.
In summary, some of the key elements include:
- Business income tax deferral until after August 31, 2020 for any income tax amounts owing from
March 18 – August 31, 2020.
- The Canada Revenue Agency (CRA) will not start any post-assessment GST/HST or Income Tax audits for the next four weeks for small and medium-sized firms.
- Temporary wage subsidy for a period of three months for eligible small businesses, equal to 10% of the remuneration paid during that period, to a maximum subsidy of $1,375 per employee and $25,000 per employer.
- More than $10 billion of additional cash flow support via the Business Credit Availability Program delivered through the Business Development Bank of Canada and Export Development Canada.
- Flexibility on the Canada Account limit in exceptional circumstances.
- Information on supports is available through the Business Development Bank of Canada and Export Development Canada.
- Other announcements specific to individuals include adjustments to the waiting period for EI, an extension of EI-like benefits to those who might not otherwise qualify, and the announcement by several Canadian banks to offer
six-month deferrals on mortgage payments for those impacted by job loss or reduced hours.
While the announcement demonstrates significant support for Canadians and business, the Newfoundland and Labrador technology sector has unique elements that warrant consideration when rolling out effective relief and support programs.
“The role of NATI is to advocate for our member companies who represent the province’s technology and innovation sector,” said NATI CEO, Paul Preston. “We are consistently connecting with members to determine what supports they most need to help them weather this COVID-19 pandemic.”
“Many local tech companies are concerned about how they will pay their employees,” NATI Board Chair, Craig Rowe explained. Rowe, who is also the CEO of ClearRisk Inc. shared, “Finding skilled talent has been the number one challenge for tech companies before the pandemic. So, laying off skilled employees already in place here in the province would certainly set the sector back significantly.”
We know that our local tech companies are concerned and impacted by lost sales opportunities and some anticipate cash flow challenges. Organizations are looking for supports but to be effective they must flow fast. If assistance is not received quickly, companies may simply not be able to survive.
We are continuing to connect with our member companies to ensure we advocate for those things needed, including the potential for not only deferral of taxes owed but possibly decreased tax rates, interest-free and/or non-repayable loans, and other wage subsidy supports that go beyond the announced maximum of $25,000 per employer.
NATI has taken action to advocate on behalf of members:
- Established a Task Force with six technology CEOs with Board Chair, Craig Rowe and NATI CEO, Paul Preston.
- Created a Slack collaboration channel for members to share challenges and work together.
- Surveying and connecting with members daily to understand the challenges so we can respond and support members effectively.
- Added a NATI.net COVID-19 Response Page to share NATI’s response and actions taken as well as a consolidation of available supports for technology companies.
Other Highlights from the Announcement
- Canadians who do not qualify for employment insurance or do n0t have access to paid sick leave will receive up to $900 biweekly for 15 weeks.
- A new emergency support benefit will be created for self-employed and part-time workers who do not qualify for EI.
- Individuals will not have to file their tax returns until June 1 and can defer any payments until after August 31.
- For parents facing school and kindergarten closures, there will be an increase in the Canada Child Benefit. Every adult who qualifies will receive up to $300 with $150 for every child.
- The GST credit will be increased to assist people with lower incomes.
- More targeted measures have been promised for individuals particularly affected by the virus or are in a vulnerable position.
- A six-month moratorium will be established for people paying off student loans.
- Funding homelessness in communities is being doubled.
- Indigenous Community Support Fund to address immediate needs in First Nations, Inuit and Métis Nation communities.
The Economic Response Plan can be found in full at the following link: https://www.canada.ca/en/department-finance/economic-response-plan.html
The Newfoundland and Labrador Association of Technology and Innovation (NATI) is a not-for-profit industry association that works closely with members, industry and government to help shape policy and advocate for those issues that matter most to members. As the voice of the $1.6 billion technology sector in NL, our mission is to help members grow and scale through our work on talent development, programming, technology advocacy, digital transformation, and strategic partnerships.
For more information, please contact:
Director, Innovation Programs, NATI