Federal Update: The Safe Restart Agreement

The federal, provincial and territorial governments have reached a deal on the Safe Restart Agreement to support the gradual return to work and economic recovery across Canada. Announced by Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland, the Agreement bumps up the federal contribution from the proposed $14 billion to over $19 billion dollars to support provinces, territories and municipalities.

Under the Agreement, federal support will address seven priority areas to help the economy safely restart over the next six to eight months, and prepare for a second wave of COVID-19, including:

  • Funding for municipalities to support operational costs
  • Investments in transit, shared equally between the federal government and provinces
  • Support for increasing COVID-19 testing, contact tracing and collecting public health data
  • Support for health care capacity, including support for mental health and problematic substance abuse challenges
  • PPE for health care workers and other essential workers
  • Support for vulnerable populations, including support for long-term care facilities and those requiring home or palliative care
  • Addressing the reduced availability of childcare spaces
  • Establish up to ten days of paid sick leave for workers who do not currently have access to it

While details are scarce, the Agreement does not appear to impose conditions on funding, but rather provides some flexibility for provinces and territories to invest funds in each priority area as fits the needs of each jurisdiction. Provinces and Territories will have to publicly disclose how they are using the money, providing accountability that funds are being used for each priority.

The conclusion of the Agreement is notable for several reasons, including the fact that it applies to all provinces and territories, including Quebec. It also successfully incorporates all the federal government’s priority streams, rather than providing an unconditional transfer to the provinces. Sticking points in negotiations had included certain priority areas, such as paid sick leave, and requests for unconditional funds from Quebec.

Successfully concluding the Agreement also involved extensive negotiation with mayors and municipal leaders across Canada.

Ontario Premier Doug Ford today revealed the province is receiving $7 billion under the Agreement. In his remarks, Ford called it a “great deal” and acknowledged the work of the Prime Minister, Deputy Prime Minister, premiers, and mayors in achieving the Agreement.

Mayor John Tory spoke positively about the conclusion of the Safe Restart Agreement, while noting that allocations to municipalities were still to be confirmed. Tory also noted that negotiations were challenging, particularly around the responsibility to support municipalities. Federal and provincial governments were taking equitable responsibility for the challenges facing cities and towns.

Additional Developments:

  • The Prime Minister also confirmed that the Canada-US border would remain closed until August 21, 2020. Questioned about international travel, the Prime Minister also indicated that restrictions on international travel would remain in place to protect the health and safety of Canadians.
  • Further, additional details on the Canada Emergency Wage Subsidy will be revealed by Finance Minister Bill Morneau on Friday. As announced on Monday, the subsidy will be extended until December.