How EI benefits for COVID 19 quarantines will work

By Mia Rabson

THE CANADIAN PRESS

OTTAWA _ Prime Minister Justin Trudeau announced changes to Canada’s sick-leave benefits under employment insurance Wednesday, to respond to concerns about COVID-19.

Here is a quick overview of how the program works and what these changes mean:

What are EI sick-leave benefits?

Eligible workers with no or limited paid-leave benefits through their employers can apply for up to 15 weeks of employment insurance if they cannot work for medical reasons such as cancer, a broken leg, or in this case, being quarantined in a public-health threat.

How is the government adjusting the program for COVID-19?

Normally, a worker who qualifies for the benefits has a one-week waiting period before payments start, so if you’re quarantined for two weeks you’d only get sickness benefits for one of those weeks. For people quarantined due to COVID-19, the government is eliminating the waiting period entirely, so you can get EI benefits for an entire 14-day quarantine. The government previously waived the waiting period, which was then two weeks, during the 2003 SARS epidemic.

Who qualifies for EI sick-leave benefits?

Employed Canadians who pay EI premiums, and self-employed people who register to participate in the EI program, will qualify if they cannot work because of a medical condition, have lost at least 40 per cent of their usual weekly pay, and worked a minimum of 600 hours in the year before the claim or since their last EI claim. If you are self-employed and pay into EI, you have to wait at least 12 months after registering to make a claim.

Do I need a doctor’s note?

Normally a medical certificate signed by your doctor is required to get sick-leave benefits but a spokeswoman for Employment Minister Carla Qualtrough said the government is waiving the note for patients required to go into quarantine by law or by a public-health official. People who are asked to self-isolate by their employers when public-health officials recommend it can also qualify.

The exact documentation required is still evolving, said Health Minister Patty Hajdu, but she said the goal is to minimize the effort required of a person who needs to go into quarantine.

What happens if I get sick and the quarantine period is extended?

If you are put into quarantine as a precaution and aren’t sick then, but later do test positive for COVID-19, a signed medical certificate confirming the diagnosis will be required for you to receive sick-leave EI benefits beyond the initial period of the quarantine.

How much will I receive from EI sick leave?

The current EI payment is 55 per cent of your earnings up to a maximum of $573 a week.

What if I don’t qualify for EI sick-leave benefits?

At the moment there is no program but the government is “exploring additional measures” to provide some kind of income support for Canadians not eligible for EI sickness benefits.

How much does the government think it will cost to do this?

The government is budgeting $5 million to waive the one-week waiting period. However Qualtrough acknowledged the cost could change depending on how widespread the outbreak is in Canada.

Insurers warn federal government Canada can’t wait a decade to update flood maps

DYK: Most maps are, on average, 20 to 25 years out of date

CBC News 

Canada plans to focus its next budget on tackling climate change and its effects, but the insurance industry, amid skyrocketing costs, is concerned the government will move too slowly on the key first step of mapping flood risks.

Flood mapping is used to underwrite flood insurance, assess bank exposure across mortgage portfolios, inform home buyers, and plan new infrastructure. Prime Minister Justin Trudeau pledged sweeping climate action during his re-election campaign last year, including $150 million  for flood mapping. The federal budget is expected at the end of March.

“Flooding is by far the single greatest peril facing Canadians as a result of climate change,” Craig Stewart, vice president of federal affairs for the Insurance Bureau of Canada, told Reuters.

Stewart said the natural resources ministry is proposing doing the mapping itself with the focus only on fluvial — river and lake — flooding, in a process that would take 10 years.

The natural resources and finance ministries both declined to say whether such a measure would be in the budget.

“We can’t take a decade to complete flood maps for this country, and we need to make sure we’re mapping urban and coastal flooding as well,” Stewart said. He estimates it could be done within three years if the government collaborates with the private sector.

Out of date

A government source said the approach it will take on mapping has yet to be decided.

Current mapping is on average 20 to 25 years out of date, said Blair Feltmate, head of the University of Waterloo’s Intact Centre on Climate Adaptation Faculty of Environment.

Insurers spent $1.9 billion annually, on average, between 2009 and 2019 on catastrophic flooding claims, compared with an average of $422 million per year in the 1983–2008 period, according to Insurance Bureau data. The four-fold increase was driven mostly by flood loss and the majority of claims were residential.

Last year, a government-commissioned panel on sustainable finance also recommended a public-private partnership for the mapping.

A member of the expert panel, Tiff Macklem, the dean of Toronto’s Rotman School of Management and a former Bank of Canada senior deputy governor, said flood mapping is “an immediate priority.”

“The Expert Panel envisaged a model where the private sector would pay a membership fee,” Macklem said. “This type of model … would be both less expensive and provide higher-quality data.”

Source: CBC News

Tax Tip – We’re changing how representatives are authorized

NEWS PROVIDED BY

Canada Revenue Agency

We’re introducing new digital processes to simplify and speed up the way representatives request online authorizations.

Please note the upcoming changes to the Canada Revenue Agency’s authorization processes starting in February 2020:

  • We’re introducing a new e-authorization process for online access to individual tax accounts. Representatives will be able to request access using a web form through Represent a Client. Similar to the authorization process for business tax accounts, they will need to scan and submit a signature page that has been signed by their client.
  • The existing T1013 form will be discontinued for access to individual tax accounts. The T1013, RC59, and NR95 will be combined into one form called the AUT-01 Authorize a Representative for Access by Phone and Mail. This form will only be used to request offline access to individual and business tax accounts.

Note: All AUT-01s submitted to the  Canada Revenue Agency (CRA) will be processed as new requests and override previous T1013 submissions. This means representatives will lose their online access if they submit an AUT-01 form (with the exception of non-residents, as there are no online services for non-residents).

  • If T1 or T2 software is used to e-submit a request for online access to individual and business tax accounts, a new signature page will be generated. This new page must be signed by the client and retained by the representative for six years.

Note: There is no requirement to submit a copy of this signature page, unless requested by the CRA.

  • We’re removing some restrictions for e-submitting an authorization using T1 or T2 software. For example, there won’t be an error message when a ‘care of’ address is used on a taxpayer’s account.
  • We’ll no longer be using barcodes for authorization requests.
  • Existing authorizations for individual tax accounts of deceased persons, will no longer be cancelled. This will avoid having to re-authorize the same representative after the client’s date of death.

These changes will take effect on February 10, 2020. Please continue to use the existing Representative authorization processes until this time.

Stay connected

SOURCE Canada Revenue Agency

WSIB Rate Framework: Gearing Up For 2020

Article by Jerry Cukier

Effective January 1, 2020, the Workplace Safety and Insurance Board (the “WSIB”) is changing the way premium rates are set for over 300,000 Ontario businesses covered by its workplace injury and illness insurance.

The new model will change the way businesses are classified, boosting fairness and increasing transparency as to how premium rates are set and adjusted.

The WSIB’s new model will use a two-step approach to set and adjust premium rates for businesses:

  1. Set an average rate for each industry class based on their risk profile and share of responsibility to maintain the insurance fund.
  2. Examine how a company’s individual claim history compares to the rest of the businesses in its class. This means that businesses’ overall rates under the new model will reflect their individual claims experience and risk.

The WSIB will be using insurable earnings, claims costs and the number of allowed claims, over a six-year period to set premium rates. For new businesses with less than one year of experience, premium rate will be the class rate.

The WSIB is offering monthly webinars to ensure Ontario businesses are prepared for the New Rate Framework. More detailed information on these changes can be found on the WSIB website.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Zurich Insurance to shift investment away from oil sands in broad carbon policy

The excerpted article was written by GLOBAL ENERGY REPORTER

Swiss-based Zurich Insurance Group Ltd. is blacklisting oil sands producers as well as the pipeline companies and crude-by-rail facilities that serve them, saying Tuesday that it will stop underwriting or investing in the companies within two years unless they can clearly show their business plans are consistent with a global effort to avert the worst impact of climate change.

Zurich said it is joining a United Nations compact to align its own business operations with the goal of limiting average global temperature increases to 1.5 degrees Celsius above pre-industrial levels in order to avoid catastrophic impacts of climate change. In a report last fall, the UN’s Intergovernmental Panel on Climate Change said the 1.5-degree target is necessary to avert dire human impacts and the wholesale extinction of vulnerable species.

Zurich committed to using only renewable power in all global operations by 2023, and said it will work to create financial industry standards to measure and set targets for the carbon footprint of companies’ underwriting and investment portfolio.

“As one of the world’s leading insurers, we see first-hand the devastation natural disasters inflict on people and communities,” Zurich chief executive officer Mario Greco said in a release. “This is why we are accelerating action to reduce climate risks by driving changes in how companies and people behave and [to] support those most impacted.”

The Swiss insurer has US$190-billion in investments worldwide, and is the latest institutional money manager to target the oil sands for divestment. Others include British bank HSBC Holdings PLC; France’s BNP Paribas SA and France’s giant AXA Equitable Financial Service LLC, as well as several state pension funds in the U.S. Alberta Premier Jason Kenney publicly condemned HSBC for its stand, but recently dismissed the financial industry’s increasing focus on climate risk as the “flavour of the day.”

However, an expert panel appointed by the federal government recently warned that the pressure will only increase as global financial markets respond to the growing climate emergency. The panel – headed by former Bank of Canada deputy governor Tiff Macklem – said Canada’s oil companies must scale up the pace of innovation in order to reduce their carbon footprint or see their share of the global market decline precipitously.

Companies such as Imperial Oil Ltd., Suncor Energy Inc. and Canadian Natural Resources Ltd. argue they have made great strides in reducing the greenhouse-gas intensity of their new facilities, which they say are now on par with the average crude refined in North America. Over all, the industry has reduced its per-barrel emissions by 29 per cent since 2000, the Macklem panel said.

“Canadian oil and natural gas is produced in one of the most highly regulated jurisdictions globally and is among the most sustainably produced energy sources in the world. The majority of global oil and natural gas reserves are held by nationally-owned companies accountable to little, or no climate legislation,” Jon Stringham, manager of fiscal and economic policy at the Canadian Association of Petroleum Producers, said in an e-mail.

Constraining Canadian production will only result in increased market share for companies that face little or no environmental standards, he said.

Zurich’s head of sustainability, Linda Freiner, said the company moved to eliminate coal used for electricity from its portfolio two years ago, but felt it needed to intensify its effort in line with the IPCC report that warned the world must begin to reduce greenhouse gases dramatically within a decade to have any chance of meeting the 1.5-degree goal.

The Globe and Mail

Federal government insured Suncor’s Middle East misadventures

The excerpted article was written by  | The Globe and Mail

The federal government paid Calgary-based Suncor Energy as much as $600-million to compensate for Middle East oil and gas assets and income lost since the Arab Spring in 2011.

On Wednesday Suncor disclosed in its quarterly financial results that it had received $300-million in “risk mitigation” payments relating to its Libyan operations. This followed a separate $300-million payment linked to its Syrian enterprise in 2012. Suncor declined to answer questions about the payments.

Suncor reported a profit of $3.3-billion on revenue of $38.98-billion for the 12 months ended Dec. 31, 2018. With an enterprise value of $76-billion at the end of last year and daily production capacity of about 830,000 barrels, Suncor by any measure ranks among Canada’s largest energy companies.

Export Development Canada (EDC), the national export credit agency, has long offered political risk insurance. That insurance protects EDC’s customers against the dangers of doing business in high-risk emerging markets, such as expropriation, political violence and the inability to transfer or convert local currency. The insurance cushioned the blow for Suncor, which wrote off assets worth billions of dollars from its former Middle East operations.

Political risk insurance is a niche product, and Suncor’s claims are massive by both Canadian and international standards. The U.S. Overseas Private Investment Corp., one of the world’s largest political risk insurers, has paid out 300 settlements since it was established by president Richard Nixon in 1971; the combined value of those claims was only US$977.4-million.

Although a handful of commercial insurers have offered the product, the Crown corporation is known for taking risks the private sector would never entertain. In the years leading up to 2011, EDC charged a premium of around 1 per cent or slightly less for this insurance. EDC has typically earned around $10-million to $20-million in premiums annually from selling political risk insurance; at that rate, it would take decades to cover Suncor’s claims.

EDC underwrote Suncor’s insurance policy in 2006 at a time when Petro-Canada (which merged with Suncor in 2009) produced crude oil in Libya and was pursuing a new natural gas development in Syria, having just sold a portfolio of mature assets there. Petro-Canada began developing the Ebla natural gas project in Syria in the late 2000s, where it saw “significant upside potential.” Meanwhile, it also established itself as one of Libya’s larger oil producers through Harouge Oil Operations, a joint venture with that country’s national oil company.

The company pumped hundreds of millions of dollars in capital spending into the two countries. But it knew its overseas assets were threatened by unrest, economic and legal sanctions and war, and purchased political risk insurance from EDC and commercial insurers to mitigate those perils.

EDC, meanwhile, wanted to encourage more Canadian foreign direct investment. One way to accomplish that was by offering increased volumes of political risk insurance to Canadian companies interested in doing business in volatile emerging markets. In 2006 EDC broadened its political risk insurance program to cover a wider variety of investments. That year it underwrote $4.8-billion in political risk insurance, substantially beating its own target.

Canadians had little way of knowing about Suncor’s insurance policy. Although EDC disclosed most of its financing transactions since 2001, it reveals political risk insurance policies only when the beneficiaries were lenders such as banks. In 2006 it disclosed political insurance policies in Mauritania, Jamaica and Mexico, but none in the Middle East. EDC declined to answer most of The Globe’s questions about the Suncor policy. “We are obligated to respect the confidentiality of our policy holders and their policies with us,” it said in a statement.

EDC continued expanding its insurance business in the Middle East and Africa throughout the late 2000s, and by the dawn of the Arab Spring, 37 per cent of its political risk insurance portfolio resided in that region – by far its largest regional exposure.

The timing proved unfortunate.

Things soured quickly in February, 2011, when what began as anti-government rallies in Benghazi grew into an armed uprising against the government of Moammar Gadhafi. Meanwhile, pro-democracy protests in March, 2011, in southern Syria also mushroomed into widespread unrest throughout the country, prompting a crackdown by President Bashar al-Assad and, ultimately, civil war.

Responding to international sanctions, Suncor suspended operations in both countries. In Syria the suspension proved indefinite, and the company filed a claim to EDC in 2011. The following year, Suncor reported receiving $300-million in “risk mitigation” payments relating to its Syrian operations, without identifying the source. Meanwhile, EDC disclosed a $300-million claim without identifying the customer. “EDC had the largest political risk insurance claim charge in its history as a result of the turmoil in North Africa and the Middle East,” Pierre Gignac, EDC’s then-chief risk officer, mentioned in a 2013 commentary.

Another was coming.

Suncor’s withdrawal from Libya unfolded in a less straightforward manner. After Mr. Gadhafi was removed from power and murdered in 2011, Suncor was optimistic it could continue doing business under the new government. It resumed production later that year. But beginning in July, 2013, Suncor found its Libyan oil shut in again, a situation that worsened after export terminals it relied on were closed. The result was the same: As unrest escalated, Suncor concluded it could no longer operate in Libya, either.

Suncor received its second $300-million payment earlier this year. The company noted it might have to repay some of that sum “dependent on the future performance and cash flows from Suncor’s Libyan assets.” But as of press time, Suncor said continuing political risk continues to impede its production in Libya. As the latest payment has yet to appear in EDC’s financial statements, it’s not clear the Crown corporation paid the full balance.

In the years following Suncor’s monster Syrian claim, EDC disclosed additional political risk insurance exposures across the Middle East, including $300-million of liability in each of Tunisia, Qatar, Algeria and Yemen. EDC continues to offer this type of insurance, but in 2017 its total exposure fell below $1-billion for the first time in years, and its Middle Eastern liability had fallen to 10 per cent of its total portfolio.

EDC says it is self-funding. However, as a Crown corporation, its benefits from the federal government’s triple-A credit rating.

EDC declined to discuss whether it had changed its underwriting or risk management practices as a result of Suncor’s claims.

Jim Carr, the Minister of International Trade Diversification, bears primary responsibility for supervising the Crown corporation. In a statement, his office said: “In these cases, the political risk insurance was purchased under the previous government and these payments were simply following the contracts signed under those agreements.

“We will continue to work with the agency and their new CEO to ensure that they uphold the values of openness and transparency that Canadians expect. ” (Former long-time Bombardier executive Mairead Lavery was appointed EDC’s new president and CEO on Feb. 5, replacing Benoit Daignault, who held the post five years beginning in 2014. She is the first female to hold the position.)

In addition to Suncor, other Canadian companies have historically also experienced significant losses while operating abroad – often because of expropriation.

Robert Wisner, a lawyer with McMillan LLP in Toronto who specializes in international arbitrations, said disputes between companies and governments involving political risks are increasingly resolved under international investment treaties. “In that field there have been billion-dollar awards, including for Canadian companies,” he said. Prominent Canadian examples include Canadian mining companies operating in Venezuela such as Crystallex International Corp., Rusoro Mining Corp. and Gold Reserve Inc. that lost properties through expropriation in Venezuela.

“Obviously the billion-dollar cases are at the very high end,” he added, “but there have been other cases where awards have been paid out for hundreds of millions of dollars.”

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