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Financial resources available for Canadians during COVID-19 pandemic

The government has implemented a variety of programs and benefits for those seeking financial support during the global pandemic
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With over 1,000 confirmed cases of COVID-19 in Canada, and more than 300 of those cases in Ontario, it seems like the response from various levels of government is becoming more strict every day.

People are worried about their health, both physically and financially.

“I can’t sleep due to stress. I lost my job, have no income, no way to pay bills, rent or afford food. I’m self-employed so no E.I. I need a way to make some money, otherwise, I hope the government freezes everything,” said local entrepreneur, Jackie Kozak. 

Freezing everything might not be a part of the official response, but all levels of government have acknowledged the financial burden caused by the response to the coronavirus and they are stepping up to help.

Effective immediately, tax payments have been deferred as well as the waiting period and medical certificate needed to apply for Employment Insurance (E.I.) have been waived. 

Additionally, the government will be placing a six-month, interest-free hold on the repayment of Canada Student Loans. 

All major banks have agreed to work with their customers to find a solution for mortgage and other credit product payments that are now difficult or impossible to manage. 

For those who have been directly affected by COVID-19, an Emergency Care Benefit has been announced that will pay up to $900 bi-weekly to those who are quarantined, sick or taking care of a family member who is, but do not qualify for E.I. sickness benefits, including the self-employed.

Also included in the Emergency Care Benefit are parents with children who require care or supervision due to school or daycare closures, and are unable to earn employment income, regardless of whether they qualify for E.I. or not.

For those who lose their jobs or face reduced hours as a result of the coronavirus, the government has announced an Emergency Support Benefit to provide support to those who are facing unemployment but are not eligible for E.I. 

Both the Emergency Care Benefit and the Emergency Support Benefit are still making their way through the legislative process but are expected to be available in early April.

Applications for both benefit programs will be handled through the Canadian Revenue Agency (CRA) and Service Canada online portals. 

For new users of these online services, once you’ve set up your account online, your access code will be mailed to you in five to 10 business days. 

The government has also made it easier to access your savings, by immediately lowering the minimum withdrawal amounts for Registered Retirement Income Funds.

Be careful about “Cashing out RSPs that would be seen by the CRA as earned income,” said Debbie Viveiros, a mortgage agent with Mortgage Edge in Bradford.

Whether you’re looking at borrowing against the cash value of a life insurance policy or leveraging the value of your home, there is no tax implication on withdrawing equity from yourself.

A homeowner who has lost their source of income should be looking at their budget for the next three to six months before things can be expected to get back to normal.

What expenses, like commuting costs and daycare, can be cut out now that you’re at home?

“I don’t recommend taking any more than what you’ll need for six months. We only want to take enough to make things square and stay in the black. If, at the end of six months, you’re in the black, you’ll be further ahead than most people,” said Viveiros.

“Interest rates are low at the moment and it’s a good time to remove equity from the home rather than rack up debts,” she continued.

Before you make any decisions about your financial future, contact your bank, contact your mortgage broker and contact your financial planner.