Feds pledge one-time benefit top-up to seniors in COVID-19 aid

OTTAWA — Prime Minister Justin Trudeau raised the possibility of extending emergency federal aid programs to ease the economic burden from COVID-19 as his government announced one-time payments for seniors that an advocacy group says falls short of helping their financial crunch.

The federal government is set to spend more than $146 billion, with $2.5 billion more in measures announced Tuesday to give seniors a one-time, tax-free top-up payment to help manage extra costs associated with COVID-19.

The Liberals have already indicated they will extend a $73-billion federal wage subsidy program beyond its early June end date, and have been pressured to extend the $35-billion Canada Emergency Response Benefit that has so far paid out $30.5 billion to 7.8 million people.

Trudeau said the government would remain flexible to provide Canadians the support they need, when they need it, but stopped short of saying which programs would be extended, or by how much.

He said the government was looking at short-term support needed with lockdowns in place to slow the spread of the novel coronavirus.

“We want to get through this, we want to get through this quickly, but we know that we need to support people right now as we get through and that’s what this extra help for seniors will help with,” Trudeau said.

The help for seniors will come in the form of a $300 payment to the more than six million people who receive old age security, and $200 more for the 2.2 million who also receive the guaranteed income supplement.

At the same time, the government announced it won’t suspend OAS and GIS payments this summer to seniors who forget to file their taxes on time, but warned the information will be needed by October.

Seniors Minister Deb Schulte said the Liberals arrived at the top-up figures by looking at extra dispensing fees with limits on prescriptions, additional travel costs for seniors avoiding public transit due to health concerns, and delivery fees for groceries.

“All small amounts, but it adds up,” she said. 

The $2.5-billion measure will provide payments to 6.7 million seniors, and add to the $59.5 billion the government has budgeted on seniors benefits for this fiscal year.

The government said it expected payments to be made in the coming weeks.

The Canadian Association of Retired Persons said the extra money, while helpful, falls short of addressing concerns seniors have about their retirement security.

The organization called for the government to waive mandatory withdrawal amounts from registered retirement income funds, beyond the 25 per cent drop already announced, and eliminate withholding tax on RRSP withdrawals this year.

Schulte said the government would watch financial markets through the rest of the calendar year before making any decisions, since most seniors don’t need to make RRIF withdrawals until the end of the year.

NDP seniors critic Scott Duvall said his party was “largely disappointed” with the Liberals’ one-time spending help for seniors, calling on the government to provide an ongoing increase to OAS and GIS amounts.

Similarly, the Liberals have been pressed to extend the this month’s one-time top-up to the Canada Child Benefit for the duration of the economic crisis. The $300-per-child payment lands at the end of next week.

“The pandemic and its economic effects will last longer than initially anticipated and this benefit has proven to be an effective income security tool for parents and caregivers who do have access to it,” the anti-poverty group Campaign 2000 wrote in an open letter to Trudeau.

“Top-ups to the CCB should last the duration of the pandemic response and be a key mechanism for the recovery plan.”

Any additional spending measures would drive this year’s federal deficit even deeper.

The parliamentary budget officer said in a report late last month that it’s likely the federal deficit for the year will hit $252.1 billion as a result of the COVID-19 pandemic just based on spending measures to date.

Yves Giroux told a House of Commons committee Tuesday the estimate was optimistic.

“I’d like to elaborate more on that, we don’t have details of some of these measures,” Giroux said, citing the financing program announced Monday targeting large companies, or the wage subsidy extension.

“It’s very difficult to estimate what is a likely deficit figure given that details are missing for some of these potentially very expensive measures.”

He said the Liberals should soon provide a fiscal update so taxpayers know how much the government expects to spend on COVID-19 aid, the depth of the federal debt this year, and forecasts for the short- and medium-term.

This report by The Canadian Press was first published May 12, 2020.

Jordan Press, The Canadian Press