A Targeted Approach to the Second Wave

With the start of the Thanksgiving weekend, governments across Canada have taken action to respond to the second wave of the COVID-19 pandemic.

Unlike the first wave earlier this year, the response to the second wave is more targeted and precise to respond to the regional nature of the rising threat of the virus, particularly as increased public health restrictions are implemented in hot spot regions in both Ontario and Quebec.

Beyond these active regions, updated federal modelling also indicates concern with increasing rates of COVID-19 in several provinces, including Alberta, British Columbia, Saskatchewan and Manitoba. With the rate of infection increasing and higher incidence among young people, forecasts indicate concerns with accelerated growth in the number of cases.

Key concerns driving the second wave response from governments are capacity of the health system, keeping schools open and mitigating the impact of a return to heightened public health measures on employment and the economy.

New Economic Measures

New federal measures announced today are focused on protecting jobs and businesses, ensuring that they are able to weather subsequent public health restrictions and shutdowns throughout a second wave. A new Canada Emergency Rent Subsidy will provide rent and mortgage support directly to tenants and property owners until June 2021 for organizations affected by COVID-19.  The program replaces the previous Canada Emergency Commercial Rent Assistance, which provided support to landlords.

Similar to the extended Canada Emergency Wage Subsidy (CEWS), the subsidy is provided on a sliding scale, providing up to a maximum of 65 per cent of eligible expenses until December 19, 2020. A 25 per cent top up will be available for businesses ordered to temporarily shut down by mandatory public health orders. This program is estimated to cost $2.2 billion through the end of 2020, but will depend on the impact of the virus and potential new restrictions in the coming months, particularly if they expand to other provinces and regions.

The federal government also announced that the CEWS would be extended to June 2021, and the subsidy rate will remain 65 per cent of eligible wages until December 19, 2020. Rounding out business supports is an expanded access under the Canada Emergency Business Account for an additional $20,000 loan, half of which would be forgivable.

Ontario and Quebec Implement Greater Restrictions

The federal package preceded the confirmation that Ontario was implementing greater public health restrictions in the Toronto, Peel and Ottawa regions in an attempt to contain the spread of COVID-19 in these regions. Effective Saturday at 12:01 am, these regions face increased restrictions on the limits for social gatherings and public events, closing restaurants and bars for indoor food and drink services, and closing gyms, casinos, cinemas and other venues for a minimum 28 days.

Complementing the federal actions to support businesses and recognizing the challenge that these new measures pose to businesses, Premier Ford committed to making $300 million available to support affected businesses during the lockdown period.

In Quebec, nearly all municipalities between the Montreal region and the Quebec City area along the St. Lawrence have moved into red zones, the province’s maximum alert level. This includes the closure of bars and restaurants, increased restrictions in schools and closures of gyms. In addition, police checkpoints will be out this weekend in hot spots to ensure that travel is essential.

With this move into a second wave and the response measures announced today, the level of coordination and support between the federal and provincial governments remains responsive to changing circumstances and focused on supporting those most impacted by this second wave of COVID-19. However, these measures may be only a first volley in the battle against the second wave, should they fail to decrease the rate of contacts and reduce the incidence of cases in the coming weeks and months.