How to Budget For Coronavirus Job Loss in Canada

The COVID-19 pandemic means mass layoffs in the airline, events, and service industries. Here's the personal finance advice you need, even if you were broke before all of this.
March 18, 2020, 10:00am
Advice on how to deal with coronavirus related job loss and layoffs in Canada
Photo by Liam Martens via Unsplash

Note: Story has been updated to include mortgage payment deferral information from Canada's biggest banks.

Ontario’s shutdown of public libraries, child care centres, theatres, bars, and dine-in restaurants is part of a steady stream of coronavirus-related cancellations leading to job losses.

People who work in restaurants and bars have already seen a decrease in customers and tips (which account for about half of what they make). So they were ready for something like this, but hearing this news on St. Patrick’s Day—typically one of the busiest days of the year—makes it especially tough.


Jenny Slater is a server at a steak and seafood restaurant in Georgetown, Ontario, with a dine-in capacity of about 60 people. Her last shift was Saturday. “I don’t have a job to go to anymore and right now I’m living paycheque to paycheque.” She said it’s been rough on the independently owned business. “My boss was hanging on for dear life. She wants to stay open but now that it’s been mandated, she has to close.”

According to personal finance expert Rubina Ahmed-Haq, people like Slater who have just lost their job, as well as those struggling with reduced hours or income, have some options. Here’s advice on how to budget for the curveball that coronavirus throws at your finances, even if money was tight to begin with.

Apply for Employment Insurance (EI)

If you qualify for EI, meaning you’ve worked the minimum number of hours (which varies depending on where you live) and you paid into it, apply right away. The federal government has waived the one-week delay before you get it.

Slater doesn’t think she qualifies for EI now because she was on unemployment in November. Her jobs are seasonal; she works two jobs in the hospitality industry in cottage country from May until October and makes as much as she can, goes on EI, then takes a restaurant job from fall through spring to earn what she can but not enough to avoid going into debt until the summer busy season.

On Tuesday, Prime Minister Justin Trudeau mentioned that the government is looking into changes to the EI system as well as other measures for workers who don’t qualify. But even if Slater does qualify, she can’t live on 55 percent of her server’s income and she’ll have to borrow more on her line of credit.


“Most people don’t get full-time hours in the industry. You’re lucky if you get 30 hours a week. You don’t give up your shift because you can’t afford it; if anything, you’d switch. You can’t even afford to take time off to go away,” Slater said.

Tap into your emergency fund

The coronavirus pandemic and the response to it is unprecedented. It’s like a decade’s worth of “rainy days” that you were supposed to save up for. Now is the time to dip into your savings. But having a super-sized cushion in the bank isn’t the reality for many lower-income and precariously employed workers. Without savings, that leaves tapping into debt. (If that isn’t possible, skip ahead to boosting your income, which is also tricky.)

“If you don’t have an emergency fund, the next place you can go is to a home equity line of credit. It’s the cheapest way to borrow money to get you through the short-term pain over the next little while,” said Ahmed-Haq. There are other types of lines of credit too if you don’t own a home. Lines of credit are a better alternative to putting groceries or paying bills on a credit card if you can’t pay it off because credit cards charge higher interest rates.

But a credit card may be your only option if you don’t qualify for a line of credit. Just be careful about only making the minimum payment because that can quickly get you in trouble.

Ahmed-Haq says this is a good reminder of the importance of an emergency fund to protect yourself in these types of situations. “Make that a priority to put something aside in a high-interest bank account once you get back to working again.”

For Slater, who is also a single mother, this situation means using a regular line of credit to get by for now. She isn’t sure what her Plan B is if the coronavirus outbreak cancels the summer season, where she makes the bulk of her money.


“I hope that none of this affects that seasonal work that starts at the beginning of May,” she said.

Boost your income (if possible)

If you’re out of work, or barely working, now is the time to find out if there’s anything else you can do to make some cash. This is standard advice during a downturn, but the COVID-19 outbreak means that it’s hard to scrounge up more work now without putting yourself at risk.

Ahmed-Haq says freelancers, like herself, can ask clients if there are new services they can provide, remotely, as an extra side hustle. “Remind them that you’re ready and able to work if they have anything for you,” she said. “They may have something for you that you don’t normally do that you can do from home.”

Slater has a second job interview with a wine company next week, which she wasn’t really interested in initially because the pay isn’t great. But now, she’s hoping to get the job to help her out for the next few months if needed. Plus, with everything that’s happening, she figures wine deliveries will be in high demand.

“Guaranteed people are going to be drinking through this and I’m looking at it differently than when I first got called back for an interview,” Slater said.

Other ways to get some extra cash include rebates or money that the government is offering. Ahmed-Haq points to the Ontario government’s program to give families money for childcare due to the provincial education strikes. “Some people didn’t bother doing that, but if you haven’t yet and you have kids, you should. It’s a few hundred dollars extra,” she said. Don’t rule anything out.

Reduce spending

If you’re spending a lot of time at home, online, chances are you’ll be tempted to buy clothes, shoes, a new kitchen gadget like a can opener, but now is not the time.

“You might be bored or want to take advantage of new shipping options, like free delivery and deals offered by Amazon and others but resist unless you really need it,” said Ahmed-Haq.

Breaks on your bills

If it’s extra hard to pay your bills this month, you may get some flexibility on when that money is due and how much you owe.

The Big Three telecommunications companies, Rogers, Bell, and Telus, plus the smaller firm Teksavvy, are waiving data caps. Rogers is also making long-distance calls across Canada free, waiving roaming charges for Canadians abroad, and suspending service cancellations for customers who can’t pay their bill this month.


According to Ahmed-Haq, you have to be proactive about what places are giving you a temporary free pass or delayed payment option. “Call all utilities, whether it’s hydro, gas, or water. See what programs they have to help you out. When it comes to your mortgage, call your bank to see if you can skip a payment or take a holiday from payment,” said Ahmed-Haq.

Canada's largest banks, RBC Royal Bank, TD Bank, Scotiabank, CIBC, Bank of Montreal, and National Bank announced support for people dealing with pay disruption, childcare issues, or illness because of COVID-19. This includes a mortgage payment deferral for up to six months, and relief on other credit products on a "case-by-case basis."

James Laird, the co-founder of rate comparison platform, says to reach out to your lender to see what help they can offer because the federal government has earmarked money to help homeowners. "CMHC has made it clear that Canadians who are struggling to make their mortgage payments will have options in order to save them from a potential default. The goal of lenders and CMHC is that no one will default on their mortgage as a result of COVID-19,” he said.

There’s also relief for people who have variable-rate mortgages in the form of lower monthly payments. That’s because the bank of Canada lowered its key interest rate twice this month because of the coronavirus emergency and the banks in turn have lowered variable rates.


There isn’t much to help renters though. Ontario issued a moratorium on evictions but housing advocates hope the federal government announces something for renters this week. British Columbia’s Government and Services Employee Union is calling on Ottawa and the province to pause all rent and mortgage payments until the coronavirus crisis is over.

Be ready to hunker down at home—without going overboard

By all accounts, there won’t be a food shortage because supply chains haven’t been disrupted. But seeing empty shelves in grocery stores can be unsettling and Ahmed-Haq says it’s OK to go into a little bit of debt if you need to grab some basics to get you through.

The federal government has a list of items to keep handy, but she says that’s not realistic for people who were already broke or don’t have much storage space in a bachelor apartment. “Food will be available but if you want to fill up, a little at a time, you can. It’s not fair that people who have lots of money and big houses have gone on a buying frenzy. If you need to stock up a bit for your own peace of mind, do it,” she said.

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