My inbox has been flooded with emails from companies telling me “we are here for you” during these difficult times. Banks, credit card companies, airlines, restaurants, Galen Weston Jr., that retailer you bought a shirt from three years ago. They’re all here for you.
What does it mean?
For some, it’s public relations and a true sense of caring. The message from Galen Weston resonated positively across Canada as the Loblaw CEO promised stocked shelves, clean stores, and a commitment not to hike prices (that one might be tough to swallow coming on the heels of a massive bread price-fixing scandal).
For others, it’s blatant marketing. Like when Canada’s big banks joined in solidarity to announce a six-month mortgage payment deferral option for vulnerable Canadians. Details were sparse, and when pressed for more information the banks refused to elaborate, saying each situation would be evaluated on a case-by-case basis.
It turns out the six-month deferral is simply an already existing ‘mortgage payment vacation‘, where interest still accrues and the deferred payments are just added to the end of mortgage amortization period. Still, that might be much needed relief for some Canadians who find themselves with no or low income in the coming months.
Listen, the banks stood in solidarity this week offering to “help” by allowing mortgage deferrals. No details, just on a “case-by-case” basis. Turns out the cases need to be pretty unique and the relief offered is pretty weak. It’s fair to criticize.
— Boomer and Echo (@BoomerandEcho) March 20, 2020
The problem is, CBC reported that customers who began to inquire about mortgage payment deferrals faced confusion, delays, and outright denials from Canada’s big banks.
“Alyson Whittle of Cochrane, Alta., said her bank, B2B, which is a subsidiary of Laurentian Bank, told her she could defer her next mortgage payment but then the following payment would be double.”
This is not helping.
Canadians need money in their pockets now. The new Emergency Care and Emergency Support benefits announced this week as part of the federal government stimulus package won’t be available until April. Provinces and municipalities will try to fill in the gaps, but for many vulnerable Canadians it simply won’t be enough.
There have been 500,000 applications for EI this week, compared to just 27,000 the same week last year.
Some businesses will voluntarily step up and offer customers a lifeline, like Apple and Goldman Sachs offering to cover interest payments for Apple Card customers.
But why can’t government work with big business (banks, utilities, telecoms) to immediately pause payments for three months (act now, figure out the details later) and truly provide financial relief to struggling Canadians?
We already know the financial bailouts and stimulus packages needed to survive this pandemic will be massive. We also know that government programs require applications, delays, and endless red tape.
Big businesses are already set-up to provide direct relief because they have automatic recurring payments scheduled for their customers. Put a hold on payments for three months and send the bills to the federal government.
Yes, that’s unprecedented. Yes, some people don’t need direct relief. But now is not the time to worry about that. The government can always clawback the payments from high income earners on their taxes next year.
If there was ever a case to be made for Universal Basic Income – a three-to-six month trial that puts money directly in the hands of Canadians – this would be it.
Do it now, we can debate it later.
— Boomer and Echo (@BoomerandEcho) March 20, 2020
“We are here for you.” Canadians don’t need platitudes. They need immediate relief. These don’t need to be empty words. We are all in this together.
This Week’s Recap:
On Tuesday I shared my pension decision, whether to keep a deferred pension or take the commuted value and invest on my own. Many thanks to Alexandra Macqueen for the expert guidance.
On Thursday I wrote a comprehensive post to explain how to apply for EI benefits.
Over on Young & Thrifty I offered my best financial advice amid the coronavirus crisis.
From the archives: Coping with stock market losses
Promo of the Week:
Friend of the blog Mike Heroux is the author of The Dividend Guy Blog and the owner and portfolio manager at Dividend Stocks Rock (DSR). He also worked for 10 years as a private banker and financial planner.
Mike has put together a free webinar exclusively for Boomer & Echo readers this Tuesday at 1:00 p.m. EST.
In this webinar you’ll hear about Mike’s dividend growth strategy, including some of his top dividend stock picks. The end of the webinar includes a free Q&A session with Mike where he will gladly discuss any investment topic with you.
Register for this exclusive (and free) live webinar here at Dividend Stocks Rock.
Smart stuff from our friends at Credit Card Genius, who share the credit card combos for saving on essentials and earning cash back during a pandemic.
Finance Minister Bill Morneau announced the RRIF minimum withdrawal rules will be 25 percent lower for 2020.
The How To Save Money team put together a guide for those who are dealing with an unexpected job loss due to Coronavirus layoffs.
Millionaire Teacher Andrew Hallam says the financial media is doing more harm than good with COVID-19.
Ben Felix explains why every market drop feels different thanks to the power of a compelling narrative:
Retirement planning expert Wade Pfau offers some wisdom on what to do when markets plummet:
“We tend to make long-term decisions based on short-term performance. Large recent market gains lead us to be optimistic about our chances, while market losses have the opposite effect.”
David Aston shares three things retirees can do now to protect their cash flow and portfolio.
Should you buy stocks now? Nick Maggiulli explains what one important market signal is saying.
Tim Cestnick shares five ways you might benefit as interest rates drop like a rock.
Travel expert Barry Choi explains how COVID-19 affects insurance policies.
My Own Advisor Mark Seed offers some great advice on how to get through a stock market crash – and benefit from it.
A hands-off policy for your portfolio amid market volatility is usually the best advice, but there are exceptions to that rule. When standing pat doesn’t sit well:
“The long-running equity market rally I think tended to make us all a little inert about making changes. It was easy to be comfy when everything was going up. We’ve had a little bit of volatility. So, I do think that if retirement is within the next five to 10 years for you, think about derisking your portfolio if you haven’t taken any steps to do so in recent years.”
Preet Banerjee offers some thoughts for those who are living paycheck to paycheck and worried about a loss in income:
Finally, Rob Carrick asks how an interest rate cut helps a population that has decided its number one priority is to buy toilet paper? Indeed.
Have a great weekend, everyone!