Chad Moore Calgary Mortgage Broker

Here is a summary of information that I think is important for you to know and understand during this health and oil crisis:

1.  Mortgage deferral program update. 

2.  Accessing Federal Government stimulus. 

3.  Conclusion. 

Mortgage Deferral Program Update:

This program is specifically for people in financial hardship due to the COVID-19 health crisis. 

Based on the response of Canadians across the country, deferring Mortgage payments sounds like a great idea for everyone.  I get that.  

But this is not for everyone. 

Mortgage lenders are each executing on this program slightly differently.  

Here’s what’s important to understand when asking for a Mortgage deferral:

• Case-by-case basis.  The deferral program is not a carte blanche approach.  
  
  
• You still have to pay, eventually.  I’m hearing some lenders are adding a side loan to your Mortgage, some will spread your deferred payments out into all future payments, some will tack this onto your bill when you close your Mortgage.
    
• Current financial hardship.  Thinking about future income is scary for most people right now.  Lenders are seeking verification of current financial hardship. 
  
  
• Don’t call your lender unless you’re in a dire position.  Please allows those truly in need of this program access to their Mortgage lender first.  You might apply for this deferral in the future?  Please free up the phone lines for those who truly need immediate help.  
  
  
• No credit damage.  Deferring a Mortgage payment will not damage your credit.  That said, please be as vigilant as you can managing debt payments with possible reduced cash flow. 
  
  
• Six month maximum.  Again, plan for a deferral request to be case-by-case decision, with six months being the maximum. 
  
  
• Missing payments.  If you can’t get through on the phone lines, send your lender an email indicating your situation.  They might waive any NSF fees if you tried to communicate. 
  
  
• Other options.  If possible, you might consider refinancing your Mortgage to pay out other debt, extend your amortization or to lower your interest rate – all in an effort to help you stay current on payments. 
  
  
• Utility bill deferral options.  The City of Calgary has offered bill payment deferral options too.  This might be one avenue you explore?

Federal Stimulus Package:

Canada’s federal Government announced a $82B stimulus package earlier this week.  This is about 3% of Canada’s Gross Domestic Product (GDP).  They said more relief is coming, if needed.  

For context, the UK announced their stimulus relief number which is about 15% of their national GDP. 

Here are Canada’s new stimulus mechanisms to help Canadians through this health and oil crisis.  Apply here:

• Emergency Care Benefit (ECB). This will pay people $900/semi-monthly for 15 weeks to people who do not qualify for Employment Insurance (EI) benefits .  
  
  This is for self employed quarantined workers, workers taking care of people with COVID-19, or parents with children at home who cannot work.  This program is administered through Canada Revenue Agency (CRA) and will be available in April.  Apply online through CRA. 
  
  
• Emergency Support Benefit (ESB).  Available for workers who lose their job and do not qualify for EI benefits.  Program available in April. 
  
  
• Waiving Medical Certificates.  The requirement to produce a medical certificate to access EI benefits is waived. 

Federal Stimulus General Income Support (1-6)

1. Goods and Service Tax Credit.  By May, a one time payment will be made for qualifying individuals for a GST credit.  Estimated amounts are up to $400 per individual or $600 per couple. 
   
   
2. Canada Child Benefit (CCB).  The Government is increasing the CCB income by $300 per child starting in May.  This increased benefit is expected to continue for 2019-2020 fiscal year. 
   
   
3. Reducing RRSP withdrawal minimums.  Reducing the minimum withdrawal limit by 25% to give people more flexibility to shore up cash flow problems.  Not just for seniors.
   
   
4. Canada Student Loan Moratorium.  Pause all Canada student loan payments for 6 months.  This is a pause, not a deferral with any payment claw back.  Hit pause for 6 months, then repay as normal. 
   
   
5. Indigenous Community Support Fund.  
   
   
6. Women and Children Fleeing Violence. Funding for shelters to support these vulnerable people fleeing violence.  

Helping Businesses Keep Workers:

For Canadian small businesses eligible for the small business deduction, non profit organizations and charities, the Government is proposing a wage subsidy for three months. 

This will be up to a maximum of 10% of remuneration paid during that period.  Businesses can access this support by reducing their remittance of income tax collected from employees. 

For context, other countries have rolled out similar measures with up to 75% of wage support. 

Employment Insurance (EI) Wait Period Waived:

The standard one-week waiting period to make an EI claim has been waived. 

Here’s where Canadians can apply for EI.

Here’s is more information on how to retain your employment. 

Conclusion:

Last week I wrote you about the Monetary stimulus the Bank of Canada added to the economy.

Here now is a summary of the Fiscal stimulus the Government of Canada is doing to help. 

The thought is our Government is “bridging the gap” of nearly an all out Global economic shut down, to resuming “normal” times again. 

Bridging the gap means helping families pay bills, cover expenses and businesses to stay in tact during this health crisis.  The big unknown for me is how long this crisis will last?  

Alberta is also facing the double whammy of a melt down in oil prices.  This oil crisis, in and of itself, is a major economic headwind. 

Guys, I’m in a place of understanding people’s financial situation and have been hearing from people who need help.

[I think here is a good time to underline my commitment to client confidentiality.  Regardless of our current economy, confidentiality is a value of mine that is of the highest importance.]  

Trust me on this, please do you best to let go of any shame or guilt etc when asking for help.  Take advantage of any private or Government help that is available to you.  This is a major economic shock that no one or any Government is prepared for. 

I hope this is helpful …

Please share this summary if you think others would benefit.

Talk soon,

Chad Moore

P.S

To my Alberta Health Service (AHS) clients and families: Thank you, thank you, thank you.