COVID-19 updates: Mortgage, loans, insurance and more.
The COVID-19 pandemic is having a major impact on personal finance products. We’re working to bring you the best and latest information so you can make the right money moves during this challenging time.
COVID-19 and your money: What you need to know.
What are the latest updates on how COVID-19 could impact your finances?
Last updated: May 27, 2020
The COVID-19 outbreak has prompted all levels of government and financial institutions to develop a full-scale response. See the latest updates below:
Ontario has extended its emergency orders until June 9. That includes closure of outdoor playgrounds, play structures, public swimming pools, as well as bars and restaurants except for takeout and delivery. Gatherings limited to five
Prime Minister Justin Trudeau says he will work with provinces to ensure that all workers get 10 days of paid sick leave a year.
The Ontario government has launched the new Ontario Tools grant program, which will help nearly 12,000 apprentices start their careers. The provincial government said it's forgiving more than $10 million in loans owed by apprentices and giving anywhere from $400 to $1,000 (depending on the sector) to new eligible apprentices for the purchase of new equipment.
Prime Minister Justin Trudeau has announced an additional $75 million in financial support for Indigenous people living off-reserve.
Phase 1 of Ontario's reopening plan is now in effect. It allows most retail stores with street entrances, vehicle dealerships, and construction services to reopen.
Students eligible for CESB can apply for the emergency coronavirus benefit as of May 15. The $9 billion dollar program will pay qualified students up to $1,250 until August.
Canadian seniors who collect Old Age Security to get a one-time payment of $300. Seniors who receive a Guaranteed Income Supplement will get an additional $200. The total cost of the program is $2.5 billion and the federal government says about 2.2 million people are eligible for both.
The federal government, along with the provinces and territories, has reached a $4-billion deal to boost the salaries of essential workers who earn less than $2,500 a month. The federal government will provide $3 billion and the provinces and territories will supply the remainder.
The Ontario government announced on May 6 that it would be extending the province's state of emergency until May 19. This means (among other things) that non-essential businesses must remain closed until at least this date, and that public gatherings of more than five people are still prohibited.
Justin Trudeau has announced additional funding for the Canada Child Benefit. Parents reliant on this benefit will now receive an extra $300 per child in May.
The deadline for individuals to file has been extended to June 1, 2020, and the deadline to pay any amounts owed has been extended to September 1, 2020.
Manitoba has unveiled plans to gradually re-open non-essential health-care and retail businesses under strict guidelines starting on May 4.
The Ontario government has expanded its temporary pandemic pay (an additional $4 an hour for the next sixteen weeks, as well as a possible $250 lump-sum a month if they worked 100 hours or more) to a number of front-line workers to include paramedics.
On April 27, applications opened for the $73 billion wage subsidy program to help businesses that have seen a drop in revenue because of COVID-19. The first payments should begin to arrive on May 7.
Prime Minister Justin Trudeau has announced a number of financial relief measures for Canadian students. First, students who are currently in school or planning to start in September, or who graduated in December 2019 will be eligible for a $1,250 monthly stipend from May to August. (If they're caring for someone else or have a disability, that amount rises to $1,750.) Students who are working but earning less than $1,000 a month can also apply. Second, the federal government is launching a grant of between $1,000 and $5,000 for students volunteering in the fight against COVID-19, which can be used toward their fall tuition. Third, the government is increasing the maximum weekly amount of financial assistance that students can get in 2020-21 to $350 (previously $210).
The province of Ontario has amended a regulation under the Insurance Act that makes it easier for insurance companies to provide customers with financial relief. Insurance companies would be able to provide premium rebates to drivers for up to 12 months after the pandemic has ended.
On April 16, the federal government announced a commercial rent relief program for Canadian businesses: Canada Emergency Commercial Rent Assistance (CECRA). "The program will seek to provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), May, and June," according to the government's website. The government also expanded the Canada Emergency Business Account (CEBA) to include businesses that paid between $20,000 and $1.5 million in total payroll in 2019 (previously it was between $50,000 and $1 million).
Wages for essential workers making less than $2,500 a month are going to be boosted. Details on who would be eligible for this new funding are still being worked out.
Prime Minister Justin Trudeau announces expanded eligibility for emergency benefits. CERB is now available for people earning $1,000 or less a month, people expecting a seasonal job that isn’t coming and people who’ve run out of EI since Jan. 1.
A $73 billion wage subsidy bill was passed by an emergency sitting of Parliament designed to help companies avoid laying off employees. The government will pay businesses that have lost 30% of their revenue a 75% wage subsidy over the next three months.
Small businesses can now apply for government-backed loans of up to $40,000 from Canada's banks and credit unions. The loans will be guaranteed interest-free until the end of 2022.
The Canada Emergency Response Benefit (CERB) kicked in on April 6. The CERB gives Canadians ages 15 and older the ability to apply for $2,000 a month ($500 a week for up to 16 weeks) if they are jobless or underemployed due to COVID-19. For more information, check out the Government of Canada’s website.
For more information about each province’s individual response, see the pages below:
What kind of economic support is available for Canadians during the COVID-19 pandemic?
The Canadian government will provide the following income support for Canadians. Head over to the government of Canada’s website to learn about the economic response plan in more detail.
For Canadians without paid sick leave, the government is waiving the one-week waiting period for those who wish to claim Employment Insurance (EI) sickness benefits and is waiving the requirement to provide a medical certificate to access EI benefits.
The government has also introduced a $900 bi-weekly Emergency Care Benefit for up to 15 weeks to provide income support to the following: workers who are quarantined or sick with COVID-19, workers taking care of a family member sick with COVID-19, parents with children who require care or supervision due to school or daycare closures. Read more about how to access these benefits on the Canadian government's website.
To get these benefits, you must be ineligible for EI.
For Canadians who lose their jobs or face reduced hours, the government is introducing an Emergency Support Benefit to provide up to $5 billion to support workers who are not eligible for EI benefits.
The government is also implementing the EI Work Sharing program, which provides EI benefits to workers who agree to reduce their normal working hours due to the COVID-19 pandemic. Read more about how to access these benefits on the Canadian government's website.
For low-to-moderate income families, the government will provide a one-time special payment by early May 2020 through the Goods and Services Tax Credit (GSTC), which will aim to increase income for recipients by $400-$600.
For families with children, the government is proposing an increase to the Canada Child Benefit (CCB) payment by $300 per child.
For seniors, the government is reducing the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.
For students with debt, the government is placing a six-month freeze on the repayment of student loans.
For small business owners, the government has implemented a number of measures to avoid layoffs and help ease financial stress during this time.
For qualifying small and medium-sized business owners the wage subsidy will grow from 10% to 75% - back-dated to Sunday, March 15.
A special emergency business account will see banks offer a loan worth up to $40,000 - government-guaranteed and interest-free for the first year. If the company can repay the balance of the loan by the end of 2022, up to $10,000 of that will be forgiven.
Head over to the government of Canada’s website to learn more.
Special reports on COVID-19 from LowestRates.ca:
LowestRates.ca writers have been working diligently to bring you the latest information about how COVID-19 can impact your financial future. Check out some of their latest work here:
- Are cottagers eligible for home insurance discounts because of COVID-19?
- If banks want us to go digital during COVID-19, they need to improve their mobile platforms
- 12 home insurance discounts that can help you save money
- How to approach your debt during COVID-19
- COVID-19 is stirring up feelings of financial shame. Here’s how to overcome it
- How to budget if you've got an irregular income due to COVID-19
- Ellen Roseman: The true cost of COVID-19 payment deferrals
- Will car loan interest rates go down because of COVID-19?
- COVID-19 is changing the way Canadians apply for life insurance
- Receive a financial windfall recently? Here’s how not to squander it
- Will your home insurance cover working from home or having a home business?
- We’re mid-pandemic. Is now a good time to buy a used car?
How COVID-19 is affecting mortgages, insurance and loans.
How does COVID-19 impact my mortgage?
This is a really difficult time for homeowners, for a number of reasons. Whether you’re looking for more information about how COVID-19 might impact your mortgage or you want to get a better rate, LowestRates.ca we’ve consulted experts to help you make informed decisions.
First, some background. On March 18, the six major Canadian banks agreed to allow homeowners to defer mortgage payments. Trudeau had initially asked for a deferral period of up to six months. They're granting deferrals on a case-by-case basis and interest will still accrue. When you resume regular payments, your payment will be higher.
The CMHC has said it will support lenders allowing homeowners to defer mortgage payments.
In addition to potentially deferring their mortgage payments, many Canadians may also have the opportunity to renew their current mortgage at a lower rate. The Bank of Canada cut interest rates twice during the month of March for a total of almost 50 basis points, or half a percentage point each time. This means that if you already had a variable mortgage, your interest rates will decrease automatically.
If you have a fixed mortgage, on the other hand, you may be able to contact your lender to decrease your monthly mortgage rate. It’s important to note though, that when rates are decreasing, there are typically large penalties for breaking your mortgage. You’ll have to determine with your broker or insurance representative whether breaking your mortgage and obtaining a new one at a lower rate would save you more money in the long run, despite the additional fee.
To contact your lender to inquire about deferred mortgage payments, see the list of contact numbers below:
- ATB: 1-800-332-8383
- B2B: 1-800-263-8349
- BMO: 1-877-895-3278
- Bridgewater: 1-866-243-4301
- CIBC: 1-800-465-2422
- CMLS: 1-888-995-2657
- Optimum: 1-866-411-3775
- Equitable: 1-888-334-3313
- Connect First: 403-736-4000
- Chinook Financial: 403-934-3358
- First Calgary Financial: 403-736-4015
- First National: 1-888-488-0794
- Haventree: 1-855-272-0051
- Home Trust: 1-855-270-3630
- HSBC: 1-888-310-4722
- ICICI: 1-888-424-2422
- Manulife: 1-877-765-2265
- MCAP: 1-800-265-2624
- Merix: 1-877-637-4911
- Marathon: 1-855-503-6060
- RBC: 1-866-809-5800
- RFA: 1-877-416-7873
- RMG: 1-866-809-5800
- Scotia: 1-800-472-6842
- Servus: 1-877-378-8728
- Street Capital: 1-866-683-8090
- TD: 1-866-222-3465
A lot of people are having trouble getting access to their lender during this time. We recommend going through a broker, who may have a more direct path to your lender than you do.
While we know this is probably the last thing on your mind right now, but if in the future you’re interested in seeing what another lender might be able to offer you following the rate cuts, LowestRates.ca allows you to compare mortgage rates from over 30 banks and brokers across the country.
How does COVID-19 impact my car insurance?
These are difficult times for Canadians, and we want to help you through it as best we can.
We know that money is going to be tight for a while, but you might have no choice but to hang on to your car.
If you’re not planning to give up your car, you may be able to save money by taking advantage of lower car insurance rates. The Insurance Bureau of Canada (IBC) announced on April 8 that the auto insurance industry will be offering drivers rebates and discounts on their premiums, since many people are no longer commuting to and from work and therefore not using their vehicles. IBC estimates these savings will add up to $600 million.
Allstate Canada announced it will be refunding its customers $30 million on their May auto insurance bills. It's a one-time "stay-at-home payment" of about 25%. And Aviva Canada will be providing around $100 million in relief, giving customers who have completely stopped driving as a result of COVID-19 an up-to-75% decrease in their premiums. ICBC has also waived fees for drivers who want or need to cancel their insurance during the pandemic.
Also, when the economy is in a slump, people tend to have less extra money to spend on things like insurance. This could result in decreased demand for insurance services which forces insurance companies to compete for your business.
What we’re seeing right now isn’t just a normal slowdown — we’re in the middle of a COVID-19 outbreak that has frozen the economy. The pandemic has led to social distancing around the world, which has forced businesses to temporarily shut their doors.
It may actually be impossible for Canadians to walk into the nearest branch of their local insurance provider or dealership to physically purchase car insurance. Insurance can still be bought online.
LowestRates.ca is happy to connect you with car insurance brokers situated across Canada who can help you find the best car insurance rates — remotely.
How does COVID-19 impact my home insurance?
While social distancing might mean cheaper car insurance rates, it might also cause your home insurance rates to rise.
With people working at home in greater numbers and more kids out of school, this might drive up the amount of coverage you need to cover you in case of an accident.
It’s difficult to say exactly how much your home insurance rates might rise because insurance is such a specialized product.
If you and other occupants of your home are going to be working or otherwise staying home for the near or distant future, contact your home insurance provider to see if your current policy is sufficient to cover you in the event that something happens.
If you’re thinking about changing your policy, comparing home insurance quotes can help you get a better rate. We can help you there. More importantly, we’ll put you in touch with a broker who can provide even more guidance around your new home insurance needs.
How does COVID-19 impact my travel insurance?
Many major providers of travel insurance have issued guidance amid the COVID-19 pandemic. Your trip cancellation or interruption insurance may not be valid if you booked your trip after a specified date. This date will vary depending on the company you purchased your policy from.
The current official global travel advisory means that medical coverage for COVID-19 is not available for trips that departed on or after March 13, 2020.
To check whether or not your coverage is valid, we recommend you speak with your travel agent or insurance representative.
If you have access to travel insurance automatically through your credit card, it will be rendered invalid for trips booked on or after March 13, 2020.
How does COVID-19 impact my car loan?
If you currently have a variable rate car loan, you may see your rates decrease as a result of the recent rate cuts.
If you’re on the hunt for a car loan, this may be a good time to act, as the borrowing rate is lower than it’s been in decades.
Furthermore, some lenders, such as the five major Canadian banks have put measures in place to help their clients achieve some financial relief in the wake of COVID-19.
Contact your lender to see if you’re eligible to skip one or a few car loan payments, though keep in mind that this may impact your amortization and payment schedule.
How does COVID-19 impact my personal loan?
If you’re currently paying back a personal loan and are looking for some financial relief, call your lender to find out if they’ve instituted any relief measures for their clients.
A number of lenders, such as the five major Canadian banks, have instituted measures that allow clients impacted by COVID-19 to skip one or a few payments on their loan.
It’s difficult to say exactly what these measures look like, as every lender has developed its own policy. You can find out exactly what your lender offers and whether you’re eligible by contacting your lender.
A recession also means that a lot of people will be looking to save money. If you have more than one source of outstanding debt and you’d like to pay it off a bit faster, consider consolidating your debt using a consolidation loan.
A debt consolidation loan is a form of personal loan that consolidates all your debt into one regular payment.
The lender you work with will pay off your creditors, which will prevent interest payments from getting out of control. You’re then required to pay them back the sum of all your debt in the form of one monthly payment. This is different from a debt repayment program, which you’ll need to work with an advisor to set up.
How does COVID-19 impact my credit?
One of the most important things Canadians can do if they sense a recession is coming is to get rid of outstanding credit card debt. Fortunately, Canada’s big six banks have temporarily cut interest rates on credit cards (some as low as 10.99%) for customers who are facing financial hardship due to COVID-19.
There are a number of ways Canadians can work to get out of existing debt, even if they’re at the beginning of their payback period.
The most obvious option is to make your full credit card payment every month to ensure that you’re not falling into a debt cycle.
In addition, you can also consider signing up for a balance transfer credit card. Many credit cards come with a balance transfer feature which allows holders to transfer their debt from another card onto the new account.
This service will often come with a fee, though the fees charged during the card’s promotional periods are often substantially lower than their regular rates.
If you’re able to transfer your debt to a new card and pay off all your credit card debt during the promotional period, you may be able to save a lot of money in the long run.
We have a number of different balance transfer credit cards to choose from.
You’re up to date. Phew! Lots to take in, we know. Want to get back to comparing quotes? Here’s a shortcut.