Fairfax Financial warns of US$1.4 billion net loss in the first quarter

TORONTO _ Fairfax Financial Holdings Ltd. is warning that it expects to lose US$1.4 billion in the first quarter because of the COVID-19 pandemic.

The Toronto-based holding company says its preliminary result will also mean about a 12 per cent decrease in book value adjusted for the $10 per common share dividend paid in quarter.

Chief executive Prem Watsa says that despite the unprecedented turbulence its insurance companies continued to have strong underwriting performance in the quarter.

Net losses on investments currently estimated at about US$1.5 billion primarily reflect unrealized losses in the fair value of our common stock and bond portfolio from the sudden shock of COVID-19, he said. That reverses a significant portion of the US$1.7 billion net gains on investments reported in 2019.

Watsa says in a statement that the company has drawn on its credit facility solely to ensure that it maintains high levels of cash. It had about US$2.5 billion in cash and marketable securities in its holding company at March 31.

Fairfax will also absorb its share of US$200 million in losses related to its investments in Quess, Resolute Forest Products and Astarta.

Nearly 5.4 million receiving emergency federal aid

OTTAWA — The federal government says nearly 5.4 million Canadians are now receiving emergency aid to replace incomes lost due to COVID-19.

The figures this morning show 5.38 million applications have been processed since March 15, a figure that includes people who were previously on employment insurance before being moved over to the Canada Emergency Response Benefit.

During the first week it was available, there were just under 3.5 million claims for the $2,000-a-month benefit, including nearly 172,000 over the past two days.

n all, the government has received 5.97 million claims for financial help since the crisis began about one month ago.

More help is to arrive next week in the form of a new loan program to help eligible small businesses cover costs.

And more federal aid from a 75-per-cent wage subsidy program, approved by Parliament on Saturday, will be available by early May.

Conservative finance critic Pierre Poilievre is calling on the government to rejig the credit program that runs through banks and credit unions to increase the value of loans and allow small businesses to use it to pay wages.

He says that would help companies pay workers now instead of waiting a few weeks for the wage-subsidy program to pay out.

When the government is able to pay the subsidy to eligible businesses, Poilievre is proposing that companies take the first tranche to pay off the increased loans.

The Opposition Conservatives are also calling on the Trudeau Liberals to come up with a plan specifically to help the nation’s restaurant, hospitality and tourism sectors.

Many of those businesses were either among the first to close due to public health concerns related to COVID-19, or have seen dramatic declines as consumer spending drops.

A handful of Conservative critics say in a statement this morning that the government must give these businesses the tools to open their doors again, and to retain workers through the pandemic, especially in areas with historically high unemployment.

Among the ideas being proposed are temporarily allowing owner-operators to qualify for the federal wage-subsidy program as well as refunding a year’s worth of GST remittances to small businesses.

A report last week by the parliamentary budget officer estimated that refunding federal sales tax to small businesses would cost Ottawa’s coffers about $12.9 billion

Unemployed during COVID 19? Here’s how to navigate federal programs

Unemployed during COVID 19? Here’s how to navigate federal programs

A quick look at some of the federal COVID-19 benefit programs and who qualifies for assistance:

Canada Emergency Response Benefit

The CERB pays a monthly $2,000 payment to workers who wouldn’t otherwise be eligible for employment insurance.

That includes wage earners, contract workers, or self-employed individuals; those who’ve had to stay home without pay to self-isolate or care for loved ones; and anyone else who hasn’t been permanently laid off, but has stopped receiving paycheques.

Any Canadian who has stopped working for a 14-day period due to COVID-19 can qualify for the new benefit, which cover a period of up to 16 weeks.

Applications open online and by phone on Monday, April 6, with payments to arrive within five days for direct deposits and within 10 days for cheques by mail.

More information is available at www.canada.ca/coronavirus-CERB

Employment insurance

Any of the 1.3 million Canadians who have applied for EI benefits within the last two weeks and been approved will be moved over to the new emergency benefit when it becomes available. (Some recent EI applicants are slated to start receiving CERB payments within a week, according to Employment Minister Carla Qualtrough.)

Benefits for workers who applied for EI on or after March 15 will mirror CERB payments for the first 16 weeks.

That means Canadians who would have received EI benefits below the $2,000-per-month threshold will now be bumped up to the maximum payment. Those who would normally qualify for more than $500 per week in employment insurance (the maximum benefit is $573 per week) will instead receive the CERB payment of $2,000.

EI-eligible workers will still qualify for their usual benefits, whether lower or higher than $2000-per-month, after the four-month CERB period

Canadians who were already receiving EI will continue to do so and need not apply to the CERB, but can switch to the program if their EI benefits end before October if they remain jobless due to COVID-19.

The government says EI-eligible workers should apply for EI now rather than wait for the CERB application to come online on April 6.

Wage subsidies

The Canada Emergency Wage Subsidy is a federal benefit that will pay 75 per cent of struggling companies’ wages _ up to $847 per week for each worker _ to keep their employees on payroll.

The $71-billion program includes organizations from bars and restaurants to charities, small businesses and large corporations, and is expected to last three months.

Employees receiving the benefit, which asks employers to cover the remaining 25 per cent of a worker’s wage if possible, cannot apply for other unemployment benefits.

The subsidy program will be available in six weeks, Finance Minister Bill Morneau said Wednesday.

Business loans

Ottawa has also launched the Canada Emergency Business Account, which mandates government-guaranteed bank loans of up to $40,000 for small businesses. The loans will be interest-free for the first year and up to $10,000 can be waived for repayment.

Parents should respect custody arrangements during COVID 19 pandemic: Ont. courts

By Paola Loriggio

THE CANADIAN PRESS

TORONTO _ Parents who share custody of their children should continue to split parenting duties with their former spouse during the COVID-19 pandemic, unless there is evidence the kids’ health is at risk, Ontario courts advise.

Though it has reduced its operations due to the public health emergency, the Ontario Superior Court of Justice recently issued a handful of rulings setting out guidelines for parents confused about how restrictions related to the novel coronavirus affect custody arrangements.

While government and health officials stress the need to stay home, keeping children in their primary residence and thus away from the other parent that is generally not in their best interest, the court said.

“Children’s lives and vitally important family relationships cannot be placed ‘on hold’ indefinitely without risking serious emotional harm and upset,” Justice Alex Pazaratz said in a ruling last week.

“In troubling and disorienting times, children need the love, guidance and emotional support of both parents, now more than ever.”

As such, Pazaratz wrote, the presumption is that existing parenting arrangements and schedules should continue in the majority of cases, while potentially making changes to transportation or exchange locations to ensure physical distancing guidelines are followed.

Some parents may have to forgo time with their child if they are under self-isolation due to recent travel or exposure to COVID-19, the judge wrote.

Parents who believe their ex isn’t taking the necessary health precautions can file an urgent motion with the court to review custody arrangements, but they must point to specific behaviours or plans that are inconsistent with COVID-19 protocols, Pazaratz said.

“There will be zero tolerance for any parent who recklessly exposes a child (or members of the child’s household) to any COVID-19 risk,” he wrote.

Justice officials in Quebec issued similar guidelines for parents, stressing the need for collaboration in working out any issues related to the current restrictions.

“The custody or access order should be complied with as much as possible,” the Ministere de la Justice said on its website.

“However, during this pandemic, you can try to work out new terms with the other parent to minimize travel.”

The province has set up a free legal aid hotline for residents unsure of their obligations during the COVID-19 crisis, which it said includes custody issues.

The Law Society of Ontario has also launched a hotline connecting callers with family lawyers who can provide 30 minutes of free legal advice to help determine if their matter is urgent.

Though there will likely be many more cases dealing with custody issues in light of the pandemic, Pazaratz’s ruling and at least two others issued by the Ontario courts send a “clear message” to parents, said Nicholas Bala, an expert in family law at Queen’s University in Kingston, Ont.,

“The message is…be reasonable, act in good faith and expect some eventual accountability if you haven’t done that,” he said, adding any breaches of custody orders will be noted once the courts resume normal operations.

This can be a difficult situation to navigate for many separated parents who feel “an understandable degree of hostility or mistrust towards the other person,” but they must focus on what’s best for their child, he said.

Nadine Russell, a family lawyer with Siskinds LLP in London, Ont., said it’s likely some parents have withheld access to children in a panic, but stressed there is almost always an alternative.

Even if a parent who normally has some access is quarantined due to the virus, video calls can be arranged so children can stay in touch without endangering their health, she said.

“However we can maintain relationships, we should do that,” because no one knows how long the pandemic will last, she said.

For Nicole Odermatt, physical distancing restrictions and prolonged school closures have meant dramatically altering custody arrangements with her ex-husband, with whom she shares the care of two young children.

The Cambridge, Ont., mother said she and her ex normally take their children a six-year-old boy and three-year-old girl for a week at a time, starting on Fridays.

But her ex has asthma and fell ill last week, and his partner is pregnant, which makes them both more vulnerable to COVID-19, Odermatt said.

So Odermatt, who works in the travel insurance industry, picked up the kids early, planning to work from home and care for them at the same time, she said.

Her workload proved overwhelming due to widespread travel cancellations, however, and Odermatt is now using up her paid leave from work, she said.

“It’s more (about) damage control/minimizing-the-risk situation at the moment,” she said.  “Obviously, he misses them, they miss him. It’s hard for me to have them full time but we’ve got to do what we can to keep everybody as safe as possible.”

COVID-19 and employment insurance – everything you need to know

The excerpted article was written by DLA Piper

Unprecedented numbers of Canadians are applying for Employment Insurance (“EI”) benefits due to an interruption in earnings caused by layoff, sickness or quarantine resulting from the COVID-19 pandemic. In this article, we explore some of the most common questions arising in relation to EI benefits at this time.

What changes have been announced to the EI benefits program in response to COVID-19?

Regular EI benefits

Employees who have been laid off by their employers as a result of business slowdowns or mandatory closures may be eligible to receive Regular EI benefits. Eligible employees may be entitled to receive a maximum of $573 per week for up to 45 weeks. To date, the federal government has not announced any changes to its Regular EI benefits program in response to COVID-19.

EI sickness benefits

Employees who are quarantined or sick due to COVID-19 may be eligible to receive EI sickness benefits up to a maximum amount of $573 per week for up to 15 weeks. Certain measures were adopted with respect to EI sickness benefits in order to respond to novel challenges posed by COVID-19. These measures include:

  • waiving of the one-week waiting period to allow new claimants who are quarantined to be paid for the first week of their claim;
  • the creation of a dedicated toll-free number to support enquiries related to waiving the EI sickness benefits waiting period (1-833-381-2725);
  • waiving of the obligation for people in quarantine to provide a medical certificate in support of their claim;
  • the possibility for quarantined employees to apply for EI benefits at a later date and to have their claim backdated to cover the period of the delay.

How do employees apply for EI benefits?

At this time, applications should be completed online by visiting the Service Canada website. Individuals who present themselves to Service Canada and who would otherwise be able to complete their application online will not be serviced in person. Employees who present themselves to a Service Canada office in person should expect to go through screening and to be required to practice social distancing measures. Employees experiencing symptoms of COVID-19 should not visit or enter any Service Canada office and should call 1-800-O-Canada for assistance with completing their EI application.

What must employers do once employees have experienced an interruption in earnings?

Without delay, employers must issue a Record of Employment (“ROE”) as this is the most important document allowing employees to access EI benefits. In order to complete the ROE, employers should be aware of and use the following codes when indicating the reason for the interruption in employee earnings:

  • When the employee is sick or quarantined, use code D (Illness or injury) as the reason for separation ‎‎(block 16). Do not add comments.‎
  • When the employee is no longer working due to a shortage of work because the business has ‎closed or decreased operations due to coronavirus (COVID-19), use code A (Shortage of work). ‎Do not add comments.‎

How long will it take for employees to receive their EI benefits?

Under normal circumstances, eligible employees are told to expect to receive their first payment within 28 days of submitting a completed application. In the present circumstances and in light of the fact that an unprecedented amount of applications are being received, the processing delay may be longer.

What other financial measures are available to assist employees and employers who are experiencing financial hardship due to COVID-19?

Canada Emergency Response Benefit

The Canadian government previously announced that it would make available an Emergency Care Benefit and an Emergency Support Benefit to employees who did not qualify for EI. On March 25, 2020, the government announced that it created a streamlined benefit, the “Canada Emergency Response Benefit” which combines these two benefits to streamline the application process and will provide $2,000 per month for four months to people who have lost their income due to COVID-19.

Supplementary Unemployment Benefit Plan

Employers who have no choice but to lay off their employees may elect to enroll in a Supplementary Unemployment Benefit Plan (SUB Plan) which allows employers to top up an employee’s employment insurance benefits during a period of unemployment due to a temporary or permanent layoff. The amount of the top up can be up to 95% of the employee’s weekly wages/salary, less the amount of the employee’s corresponding EI benefits.

Work-Sharing Program

The Government of Canada has instituted a “Work-Sharing Program” which exists to assist eligible ‎‎employers to avoid layoffs where there is a temporary reduction in the normal level of business ‎activity, ‎namely as a result of COVID-19. Previously, a Work-Sharing Program ‎could only last for a maximum of ‎‎38 weeks, however the maximum period has been extended to 76 ‎weeks in response to COVID-19. ‎

Participating employees receive income support in exchange for agreeing to work a reduced schedule ‎‎and to share available work with other employees over a specified period of time. ‎

Provincial Measures

Additionally, many provincial governments across Canada have announced measures to assist their respective populations in overcoming what is a period of financial hardship for many. Employers and employees should verify if they are eligible for any such programs.

The COVID-19 situation is a rapidly evolving one with new measures being adopted or modified day-by-day and hour-by-hour. We recommend that you consult with a member of our Labour and Employment Team who will ensure that you are acting upon the most up-to-date information.

Source: Lexology

Facts about the Canada Emergency Response Benefit

Ottawa announced Wednesday the Canada Emergency Response Benefit intended to quickly get cash to workers who need it and support their employers. Here’s a look at how the program is going to work.

What is it?

The federal government is proposing a taxable benefit of $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic. It’s intended to be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

Who is eligible?

The benefit is to cover Canadians who have lost their job, are sick, quarantined or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. The CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance. It also applies to workers who are still employed, but are not receiving income because of disruptions to their work situation.

Who shouldn’t apply for the benefit?

If you are currently receiving EI benefits and expect them to continue, don’t apply for CERB. If your EI benefits end before Oct. 3, you can apply for CERB when those EI benefits cease, if you are unable to return to work due to COVID-19. Canadians who are eligible for EI regular and sickness benefits would still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.

What period is covered?

Canadians are to begin receiving their CERB payments within 10 days of application. The CERB would be paid every four weeks and be available from March 15 until Oct. 3, 2020.

How do I apply?

The government plans to have an online portal open by April 6. Applicants will also be able at that time to apply via an automated telephone line or via a toll-free number.

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