
Canada extends financial aid for millions for two more months - grecy
https://www.cbc.ca/news/politics/cerb-extended-trudeau-1.5613782
======
lux
As a Canadian business owner, we're super lucky to be in Canada right now, and
for the supports that have been put into place for people and businesses
alike.

Our company was luckily not hit badly enough to qualify for the 75% support on
salaries (we did get a line of credit!), but I know several others who needed
it and got the support they needed which is great!

It's not perfect - rent supports for storefronts, restaurants, bars, etc.
could be better, for example - and it won't save everyone or every business,
but it's made a difference in many lives and helped us stay home and
quarantine more effectively without so much worry about making ends meet.

I just hope more Canadians remember it was the NDP fighting for a lot of these
supports come election time :)

~~~
alexashka
In the short term, it's great.

It really doesn't take much to tell banks to add numbers to people's bank
accounts.

What it's really doing is subsidizing everybody that works in or is tied to
non-essential face-to-face service industry, by everyone else.

It's really not even that interesting, other than seeing how easily frazzled
people are by the slightest calamity - why is non-essential services taking a
vacation for a few months at the expense of everyone else supposed to be a
major event with long-lasting consequences?

Imagine you have a family and you lose your job. If you have savings for a
couple of years, you can take it easy for a while and then go look for a job
and find one 6 months later. Was anything other than your ego bruised by the
loss of the job? No, not really.

Why doesn't this analogy translate to what's happening with covid? I'm
guessing because not only have you lost your job, but you owe tens of millions
in gambling debts and spent half your waking hours convincing various factions
to give you some extra time to come up with the money.

That's what the economy looks like to me and I find it difficult to be
sympathetic - people need a reality check and get back to living a simpler
life with less shit being bought and sold all the time. It is within my
lifetime that I've gone from owning 2 t-shirts to 20 and I have no idea why. I
can go back to wearing 2 and my life will be the same - I just hope others can
see the silver lining in all this and not go back to living frivolously.

~~~
tempestn
It's reasonable for individuals to aim for a few months of emergency funds.
It's not reasonable to expect main street businesses to have cash on hand to
cover many months of near zero revenue. Most small businesses just don't have
the margins for that to be viable. If you expect every individual restaurant
to be able to weather a period of months when no one goes to restaurants
without any kind of assistance, the only restaurants you'll get will be large
chains.

Much like running government 'like a business', the analogy of running a
business 'like a household' only takes you so far. They're fundamentally
different things.

~~~
alexashka
How did you arrive at your assessment of what is reasonable?

Mine happens to be different from yours. Does that make me unreasonable? I
mean, are there more shades to the world than reasonable/unreasonable, black
and white?

I think so and I hope we can discuss the various shades of grey.

I think being responsible and saving for a rainy day applies across all
spheres of life - be it government, business or a household. What do you think
is fundamentally wrong with such a view, other than that it isn't the way
things currently are?

~~~
asdfasgasdgasdg
You made a bunch of normative statements about what people "need" to do, so I
don't think it's out of bounds to make a normative comment about the
reasonableness of your demands.

>What do you think is fundamentally wrong with such a view, other than that it
isn't the way things currently are?

For one, it dramatically increases the capital requirements for starting a new
business. Such capital is likely not going to be available to new restaurants
or other service oriented small businesses with no real collateral. Or it
would come at such a high cost that it would be unprofitable to run the
restaurant. All to optimize for a once in a century event.

I think the world where the government backstops these businesses is just a
better world than the one that would arise from what you envision. It has more
of what I want and less of what I don't.

~~~
alexashka
> You made a bunch of normative statements about what people "need" to do, so
> I don't think it's out of bounds to make a normative comment about the
> reasonableness of your demands.

Did I? There is a single sentence with the word 'need' in it in my entire
post. My last sentence expresses my hope for others' behaviour. That's two
'normative' statements that really express the same point - we are living in a
consumerist culture. I don't think that's at all a controversial position, it
is almost a cliche at this point.

I also haven't made a single demand upon anyone.

I'm not sure what motivates you to misrepresent my position in such crude
fashion and I wish you'd refrain from replying to me in this manner in the
future.

> it dramatically increases the capital requirements for starting a new
> business.

Help me understand - you think the approach of being responsible and saving
for a rainy day, dramatically increases the capital requirements for starting
a new business? How?

How does saving profits relate to upstart requirements? As far as I can tell -
the two are unrelated.

~~~
tempestn
OK, so you're saying you don't need to have rainy day funds at the start of a
new business, but should build them up over time, right? So, that leads to two
potential situations. Let's use the restaurant example.

First possibility is the one most restaurants face. If they're lucky and the
business is actually viable, they will have a profit margin of 3-5%. For a
single location restaurant, that profit will be enough for the proprietor to
make a decent living hopefully, but not a whole lot more. Should be enough for
them to save up a few months of personal expenses sure. But saving up enough
cash to pay rent, suppliers, and staff, for months, with no income... would
take forever with those margins. It's just not possible for most businesses of
that sort.

But let's also look at the other possibility. Say you've got a real hit
restaurant (or another type of business with larger margins) and your margins
aren't 3-5, but 15-20%. Now you're saving real money. So yes, you could sock
it away under the proverbial mattress. But if you're that successful, it means
people really value the product you're providing. Instead of hoarding your
profits in case of a pandemic, you could instead invest those profits into
opening a second location, allowing twice as many people to benefit from the
service you're providing. In the 99% of years when there isn't a black swan
event, that option is better not only for the business owner, but for society
as a whole. So even for very successful businesses that could afford to keep a
large amount of cash around, we're usually better off if they spend that money
to do more of what's making them successful in the first place.

Of course occasionally there will indeed be a pandemic, at which point
government can help out to prevent both types of businesses from failing, so
that when the event passes they can go back to generating value.

------
runawaybottle
Pertinent satire:

[https://youtu.be/wz-PtEJEaqY](https://youtu.be/wz-PtEJEaqY)

You are subsidizing landlords by giving this stimulus. It’s not that bottom
up.

~~~
cheez
Absolutely. When it happened, a few Canadian friends of mine were impressed
with Trudeau but when we walked through the amount and where it would likely
go, we realized it was purely to hold up the housing market. Without this, the
housing market would have collapsed FEROCIOUSLY. So this was a gift (yet
again) to Canadian landlords and homeowners at the expense of the younger
generation.

~~~
cmdshiftf4
>So this was a gift (yet again) to Canadian landlords and homeowners at the
expense of the younger generation.

What about the people who would have been made homeless, perhaps permanently,
by the housing market collapsing ferociously as you pointed you?

~~~
rahimnathwani
How do you become homeless by the 'housing market collapsing'? If the price of
housing goes down rapidly (which I guess it what's meant by 'collapse'), that
makes it _more_ affordable, not less.

~~~
cmdshiftf4
What do you think happens the tenants when the landlord's properties go into
foreclosure?

What do you think happens mortgage lending in such a scenario?

What percentage of current renters have a 20% downpayment ready for even
something as large as a 50% drop in home values? In Toronto, last I checked it
as 1.1m for the average house and about 800k for a reasonable condo. How many
current renters do you honestly think have $110k/$80 ready for a downpayment?

A housing market collapse only benefits those with great sums of capital on
the sidelines waiting to deploy.

~~~
raxxorrax
Granted, there is a problem of someone doing an "Amazon", but these dangers
can all be accounted for and cheap homes would vastly benefit the younger
generation. Granted, maybe progressive taxes on property are needed, but I
don't see problems.

So 1.1m for a house is probably a problem. What is the alternative to fixing
that?

~~~
cmdshiftf4
>cheap homes would vastly benefit the younger generation

The USA, Ireland and others have already been through housing busts in the
last 10-15 years and it had no effect on home ownership.

>So 1.1m for a house is probably a problem. What is the alternative to fixing
that?

Keep in mind we're talking about prices in some of the most attractive places
to live in, in North America. Places that are also the target of skilled
immigration and migrants with money also.

As you probably know, it might be $1m for a starter condo in NYC, but you can
pick up a detached house in a decent area elsewhere for a quarter of that.

The unaffordability of the cities is a function of supply vs demand. If you
want to bring down city property prices, simply reduce the need for cities.

~~~
selectodude
There are plenty of megalopolises all over the world where housing values are
not nearly as extreme as they are in North America. In ten minutes of
searching, I found a 3 bedroom condo in Tokyo marketed to expats for $350,000.
With a parking spot. And a balcony.

~~~
jacobr1
Is that a function of keeping up with supply by building? And if so, what does
Tokyo do structurally that NA cities can't seem to get their act together to
manage it? My understanding is that in Japan generally, there is more of a
culture of destroying housing stock and rebuilding. I presume that leads to
building with greater density if there is more turnover. And presumably, this
also helps with keeping up the infrastructure expansion to support density
(transit and utilities). Just a hunch, is it true?

~~~
selectodude
It’s a good hunch. I think the biggest thing they do is that planning and
zoning isn’t done at a local level, it’s done at a national level. So you
can’t get your neighbors together to vote out your representative or throw
massive amounts of effort at stymieing development. I think some of it is
cultural, too. The Japanese are still dealing with the fallout of the real
estate crash in 1992, the Nikkei 225 has still yet to reach the peak value
from that time, and they just don’t look at real estate as an asset that will
always go up in value indefinitely like we do here in the West, so there’s no
political will to maintain that.

------
designium
Being in Canada, I think that helped a lot of my friends who had expensive
rent to pay in Downtown Toronto. But, it's not clear how the financial aid
will help the small businesses; I can see that a lot of the restaurant in
Downtown are not going to recover and those people who eventually weaned off
from the government support, won't have a job to go back. Expecting that some
other business will fill those gaps won't happen suddenly.

~~~
flyingcroissant
What about the support available for businesses (ie.
[https://www.canada.ca/en/department-finance/economic-
respons...](https://www.canada.ca/en/department-finance/economic-response-
plan.html#businesses))?

~~~
designium
There are support for business to pay up to 75% and for small businesses a
$40K loan with $10K forgivable. At least in Downtown Toronto, those support
won't do much specially because the rent is super expensive. Expensive in the
range of $5000 and up for a small restaurant in downtown area. You can also
find news from BC, where the rent relief for landlords are not being adopted
because landlords are not willing to register for the support and the business
tenants are not getting support because of that. News don't say why that is
happening but it's something interesting to think about.

~~~
KMnO4
The small business support also maxes out at $2000/mo, so if you make more
than $17/hr then your employer is getting <75%.

------
davidg109
Landlord here. Someone else said it best. We have mortgages to pay too. The
province also shut down the possibility to evict in order to pay it (for now).
CERB nullifies what would have been an explosive, shitty situation for
everyone.

~~~
nlitened
From time to time landlords have to go bankrupt after taking too much
leverage.

If landlord’s mortgage is risk-free, it means that the landlord is leveraged
at the expense of people who don’t have home — which is rather unfair
economically, and leads to more inequality. Wealthy risk-free landlords get
passive income and re-invest it into more leveraged assets, poor people pay
taxes to bail-out their landlords.

~~~
davidg109
I’m not sure where you are going with this. Are you saying CERB shouldn’t
exist? For the inequality issue you mention, what solution would you propose?
A socialist state?

------
ww520
UBI somehow is realized after a disaster. Interesting to see what economic
impact will be in one or two years.

~~~
identity0
The CERB is all the downsides and expenses of UBI without any of the benefits
---no incentive to find work, bureaucracy hell, Canada has to worry about and
invesigate fraud, doesn't help poor workers working minimum wage jobs (which
are almost all essential)

~~~
notatoad
>bureaucracy hell

Not sure how you figure this. It's a pretty painless application process and
everybody is getting approved.

~~~
tenpies
Yes, they've made it highly abusable and pretended this was a "feature", then
backloaded all the bureaucracy into the Canadian Revenue Agency (CRA) who will
have to determine how many _millions_ of people received aid when they didn't
qualify.

It would honestly be better if they just said "free money for everyone, just
click here" because the CRA will now have to spend the next decade trying to
collect fraudulent benefits. The cost of the entire program would probably be
25% higher if you factor in what this will cost to audit and attempt to
collect from fraudulent claimants in the future, plus the lawsuits from tax
payers because Canadian leaders literally instructed people to just claim it
even if they didn't qualify.

~~~
jeromegv
No Canadian political leaders instructed people to claim it when they don't
qualify.

------
12bits
As someone who works at a university in Alberta who is on furlough, this
worry’s me because they will delay recalling us even longer. Since our
provincial government is hell bent on destroying any form of non Christian
learning institutions. Post secondaries have the covid front and the
government cut front. Multiple people have volunteered for buyouts but the
schools can’t afford the union mandated abolishment terms, being in education
in Alberta right now is a career death sentence. Anyone worried about the debt
from this needs to relax the majority of this money goes right back into the
economy for food, clothing and shelter, and They’re clearly not relying on it
for their families survival, it’s a tough nut to casually pivot elsewhere
right now.

------
bregma
It's not helping. I still have millennial kids in my home.

"But dad if I moved back to my place I'd have to buy my own groceries."

 _sigh_

~~~
blaser-waffle
If they're residents you have to evict them... but no one said you have to
feed them.

------
kitcar
A little more context: What's not mentioned in this article is that the
Liberal party, currently in power, has a minority government, and therefore
needs the support of either the NDP (left of the Liberal Party) or the
Conservatives (right of Liberal Party) to get things done. NDP was pushing for
extending the financial aid, which is likely a significant political reason
why the liberals chose to extend CERB (in addition to not wanting a massive
number of evictions to occur all at once...). Here is some more info on the
give-and-take going on: [https://www.cbc.ca/news/politics/cerb-bill-
impasse-1.5605937](https://www.cbc.ca/news/politics/cerb-bill-
impasse-1.5605937)

~~~
simlevesque
> needs the support of either the NDP (left of the Liberal Party) or the
> Conservatives (right of Liberal Party) to get things done

That's simply not true. They can do anything they want without the agreement
of any of them. Check the seats, you missed some.

~~~
ryanbrunner
How do you figure? The liberals currently have 157 seats out of 338, they need
the support of at least one other party on confidence motions (that party
could be the Bloc as well)

~~~
philistine
He seems to have missed the difference between a majority and a plurality.

~~~
simlevesque
How did I miss anything ? I'm saying they can get majority without the NDP and
PCC.

------
macu
The only thing that gets me is that unlike EI, CERB is not taxed up front, so
many low-income Canadians claiming it are going to owe taxes on it next year.
I would rather it be taxed up front or tax-free for the recipients. People are
really going to struggle when it comes back on them.

About the original 4-month term (with 2 additional months at 0.15% tax, $12000
works out to $1800 to pay back):

"A recipient who earns the maximum benefit of $8,000 will have to repay $1,200
at tax time."

[https://www.ctvnews.ca/health/coronavirus/don-t-spend-it-
all...](https://www.ctvnews.ca/health/coronavirus/don-t-spend-it-all-cerb-
recipients-will-owe-income-tax-on-it-next-year-1.4908256)

~~~
aledalgrande
I think it's better to have more cashflow during the pandemic and pay the
taxes later. Taxes can also be payed in installments. Obviously, all this
doesn't matter if someone is not good at managing cashflow.

------
usaar333
The regional variance in covid infection rates in Canada is high. Covid has
always been at a relatively low level in BC, but severe in Quebec. (15x the
death rate).

One wonders if you'll consequently see very difficult economic recoveries in
different provinces.

~~~
peeters
> Covid has always been at a relatively low level in BC

BC was actually the hardest hit early on, but they were quick on their feet
and the first to see a real response to curve-flattening changes.

~~~
nickff
BC is also much younger and healthier than QC; in addition, Western regions of
North America are generally doing much better than the Eastern for some
reason. It's really difficult to be sure what's going on right now.

------
tomrod
This is the right move. This is how you do a V-shaped recovery.

~~~
gentleman11
They are also starting to threaten jail time for people who collect but who
aren’t supposed to. They should really just do helicopter money

~~~
clusterfish
How do you think they will force many thousands of poor people to repay money
that they don't have, neither in savings nor in income, while holding on to a
minority position in government?

They're just lying about being strict on TV to make everyone feel better about
it. They don't have the capacity or political willpower to follow through.
It's been months, it isn't urgent anymore, if they wanted to devise any sort
of eligibility checks they would have done it already. But the only real
eligibility requirement is being ballsy / desperate / yolo enough to claim it.

~~~
imtringued
I always had the impression that with these programs that repayment isn't the
goal. Yes, the government wants its money back but if say only 10% of the
money was "wasted" then you can just consider that money a form of economic
stimulus.

~~~
clusterfish
If it was a universal stimulus that's be great, but that 10% is a hundred-
million-dollar subsidy to dishonest people and outright fraudsters. Such
incentives affect people's behaviour and over long term this might even
accumulate to a pretty damaging change in culture that will be very hard to
fix.

Some people like to complain about regular welfare programs being abused, but
at least those have _some_ controls, they're not just a web form with your
bank details. Abuse rates will surely be much much higher for CERB, and that
was largely preventable.

~~~
katbyte
I’m ok with it - it allowed many of my friends to survive the pandemic with
out too much fuss and any controls put it to prevent abuse would have delayed
much needed help

------
taxmoneythrow
Happy to pay for extended vacations for so many... I personally know several
people who refuse to go back to work under the guise of “we don’t feel safe”
so that they continue to get this free vacation. The debt hole that’s being
dug on this fraud is incredible...

~~~
fatbird
So what? Those people aren't hoarding the money, they're circulating it
through consumer spending, and they're far, far from a significant minority,
let alone a majority of people.

Every system has freeloaders. Keeping freeloaders in business during this
crisis has more than enough downstream benefits that we really shouldn't care
if some lazy assholes get to be moreso for a few months.

