Peter Yeh

Canada Emergency Wage Subsidy The newly announced Canada Emergency Wage Subsidy a 75% wage subsidy to eligible employers for up to 12 weeks will help Canadian employers keep their workforce intact and healthy during the pandemic. A group benefits plan is critical to supporting employee health during this unprecedented time. The Canada Emergency Wage Subsidy can help ensure employers have the financial ability to continue coverage for their employees.... What you need to know about the program: The program subsidizes up to $58,700 of earnings at a rate of 75% to help employers meet payroll and benefits obligations; The start date of the program is retroactive to March 15, 2020 and will run to June 6, 2020; The subsidy will be available to employers of all sizes that are not public sector entities; To qualify, employers will have to demonstrate that their gross revenues went down by 30% in March, April or May 2020 compared to the same month last year; Employers will have to attest that they have done everything in their power to cover the remaining 25 per cent of their employees’ salaries but the government recognizes that not all employers will be able to do so; Employers will be able to apply to the program through a Canada Revenue Agency (CRA) portal that will be up as soon as possible, and funds should start to flow to them within the next six weeks; Organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced 10% wage subsidy For more details about the program please see the Government of Canada’s official news release and Backgrounder.

Thanks to Bowinn Ma, MLA for providing the organized information of government support during this hardtime. http://bowinnmamla.ca/covid19/supports/

Minister Morneau Announces New Benchmark Rate for Qualifying For Insured Mortgages The new qualifying rate will be the mortgage contract rate or a newly created benchmark very close to it plus 200 basis points, in either case. The News Release from the Department of Finance Canada states, "the Government of Canada has introduced measures to help more Canadians achieve their housing needs while also taking measured actions to contain risks in the housing market. A stable and h...ealthy housing market is part of a strong economy, which is vital to building and supporting a strong middle class." These changes will come into effect on April 6, 2020. The new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%. This move, effective April 6, should reduce the qualifying rate by about 30 basis points if contract rates remain at roughly today's levels. According to a Department of Finance official, "As of February 18, 2020, based on the weekly median 5-year fixed insured mortgage rate from insured mortgage applications received by the Canada Mortgage and Housing Corporation, the new benchmark rate would be roughly 4.89%." That's 30 basis points less than today's benchmark rate of 5.19%. The Bank of Canada will calculate this new benchmark weekly, based on actual rates from mortgage insurance applications, as underwritten by Canada's three default insurers. OSFI confirmed today that it, too, is considering the new benchmark rate for its minimum stress test rate on uninsured mortgages (mortgages with at least 20% equity). While it might boost buying power by just 3% (depending on what the new benchmark turns out to be on April 6), the psychological boost will be positive. Homebuyersparticularly first-time buyersare already worried about affordability, given the double-digit gains of the last 12 months.

If you are hoping the price of real estate to be more friendly, you will be disappointed in 2020. As for the mortgage interest rate, the rate had been moving up and down in 2019. We saw the rate going down at the beginning of 2019 to fall 2019, and then the rate started to go up and finish strong in 2019. "The BoC’s target overnight rate remained at 1.75% throughout 2019, thanks largely to a strong domestic economy in the face of global headwinds. Meanwhile, more than 40 cent...ral banks around the world have cut interest rates in recent months." With all the risks flying around in 2020, my personal opinion is that the rate may move similarly in 2019. https://www.canadianmortgagetrends.com//the-latest-in-mor/

75 Many thanks to all my friends and partners. Our team, Finance One, has been named one of the top 75 mortgage broker in Canada. We will continue to work hard and provide high quality services to our friends and clients.