Uncertainty looms across the country as the economic fallout from the COVID-19 pandemic pushes the economy toward a recession that some expect to be worse than the 2008 financial crisis. With more than two in five households out of work, nearly every Canadian has taken a financial hit, and those who haven't are living in fear of the possibility that they soon might.
For young workers who've been laid off with little in the way of accumulated emergency savings to fall back on, things may feel scarier than they've ever been. The saving grace, says Shannon Lee Simmons, founder and certified financial planner at the New School of Finance in Toronto, is the newly announced Canada Emergency Response Benefit (CERB).
CERB offers a monthly $2,000 payment for a period of up to 16 weeks for those who wouldn't otherwise be eligible for Employment Insurance. Though the regulations around who's eligible for EI are opaque, as a general rule, EI is designated for Canadians who've lost their job through no fault of their own (those who believe they might be but aren't sure are typically encouraged to apply anyway).
The criteria for CERB qualification are much broader. Any Canadian who has ceased working for a 14-day period due to COVID-19 is eligible. 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 pay cheques.
The CERB application portal is slated to open on April 6, while those who are eligible for EI can currently apply on the Government of Canada website.
The benefit should be enough to help many Canadians stay afloat without having to pursue extra work just to scrape by, Simmons says.
"CERB is a huge relief for so many people,” she says. “We don't have to go encourage side hustles and tell people to put themselves at risk and other people at risk.”
Employees and owners of small businesses and non-profit organizations should also soon be able to breathe a sigh of relief following the release of the Canada Emergency Wage Subsidy, a federal benefit designed to help entrepreneurs cover up to 75 per cent of wages and keep their employees on payroll.
A number of non-governmental resources are also available for workers in communities hit hardest by coronavirus-related layoffs, including the arts. As theatres and film sets around the country remain closed with no end in sight, a number of industry organizations have funding available for performers. Top of mind for fee-only financial planner Chris Enns - who serves Canada's creative community through his firm Rags to Reasonable - is the AFC, which has been providing workers in the entertainment industry short-term emergency financial assistance for essential bills since the 1950s. “If you can't make your rent, you call them,” Enns says. “Even if you're not sure, just call.”
A number of other industry organizations recently launched relief funds to help performers through the pandemic, Enns notes. The Toronto Arts Council's COVID Response Fund is offering up to $1,000 in grants for self-employed workers who have proof of lost revenue and are not eligible for EI. The National Arts Centre's #CanadaPerforms fund has accumulated $600,000 to pay entertainers who host online performances, like concerts or comedy shows held on Zoom, Twitch, or Instagram Live. Other funds and financial resources for artists and freelance workers can be found via CBC Arts here.
Regardless of income level, the majority of Canadians are tightening their bootstraps to one degree or another. In times of extreme financial anxiety, Simmons and Enns agree that mindful spending is the name of the game.
Both suggest taking an intentional approach to limiting your budget - if not for the sake of cutting costs, then as a way to regain the sense of control we've all recently lost in most other arenas of life. Try making a list of things you're willing to spend on and how much you can afford to spend on them. Start small: plan for just this week before taking on the whole month. And don't punish yourself if you don't stick to it. After all, “it's more the act than the result,” Enns says.
“Practicing the technique of sitting down and figure out what you need and then how to balance that is useful, because when things change, you'll be able to incorporate those changes more easily,” he says.
This principle applies whether you're leaning on emergency savings or falling back on a line of credit. There's no shame in dipping into debt out of necessity when your income suddenly disappears, both Simmons and Enns say, noting that guilting yourself for it could do more harm than good.
But managing this debt responsibly is essential. Simmons suggests taking a “controlled burn” approach.
“If you're going to go into debt, do it with your eyes wide open, so that on the other end you're not shocked by it and have a plan to pay it back,” she says.
Simmons also suggests giving yourself permission to say yes to the occasional non-essential expense. Putting pressure on yourself to cut costs drastically could lead to unhealthy binge purchases down the line. But investing a little up front on items that help you manage stress - like online therapy appointments or memberships to virtual workout classes - may go a long way in combating the urge to splurge elsewhere.
“What's one thing that you can spend money on to help you feel normal to help you feel safe in a world that doesn't feel normal or safe right now?” Simmons says. “I think that's something that's going to provide you with a sense of calm that we all need right now.”