COVID-19: Government Benefits and Subsidies for Individuals and Businesses

(Updated: August 12, 2020)

BENEFITS FOR INDIVIDUALS/EMPLOYEES

What?How much?How long?Who is eligible?
Canada Emergency Response Benefit$2,000 / month

This is taxable income and therefore taxes will be owing on these payments when you file your taxes. No source deductions are presently being made.

Available from March 15, 2020 to October 3, 2020, for a maximum of 16 weeks from date of application.You must:
  • Be at least 15 years old
  • Earned income of at least $5,000 in 2019 or in the 12 months prior to the date of their application
  • Have stopped working because of COVID-19 (whether or not are eligible for EI regular or sickness benefits) OR are eligible for EI regular or sickness benefits OR have exhausted their Employment Insurance regular benefits between December 29, 2019 and October 3, 2020
  • Have not earned more than $1,000 for a period of at least 14 consecutive days within the initial 4-week period of a claim or $1000 in total for each subsequent claim
  • This means that recipients will now include part-time workers, seasonal workers, and those who have exhausted their available entitlement to EI regular benefits

Note that this benefit is available to self-employed individuals as well and those who do not qualify for regular employment insurance benefits.

Also, note, if you are receiving regular EI benefits, you cannot receive CERB for the same time period, but employees can still get full EI benefits after CERB ends if they are still unemployed.

Thus, the federal government recommended that eligible persons apply for CERB first.

Applications should be made through the CRA or Service Canada but not both. This will result in an overpayment.

You are not eligible for this benefit if you voluntarily quit your job.

EI Benefits for self-quarantine /illness/child-care reasonsMax: $573/week

*The amount of benefits will depend on your insurable earnings

Up to 15 weeks

*Wait period is waived

You must:
  • Be unable to work due to self-isolation, personal illness or for childcare.
  • The employer will be required to provide employees with a ROE coded D (illness or injury).
  • Have accumulated 600 hours of work in the 52 weeks before the start of this claim or the start of your previous claim, whichever is shorter

A medical note is not required to obtain these benefits.

EI “regular” benefits if Temporarily Laid offMax: $573/week

*The amount of benefits will depend on your insurable earnings

Generally, these benefits can be in place for the temporary layoff period.

Under Ontario employment standards legislation, a temporary layoff can long as 13 weeks or in some circumstances, as long as 35 weeks.

The maximum duration of EI benefits will depend on the number of insurable hours you have accrued as well as the local unemployment rate.

*There is normally a 1-week wait period

You must:
  • Have accrued enough insurable hours (ranging from 420 to 700 hours)
  • Have been without work and without pay for at least seven consecutive days in the last 52 weeks
  • Be ready, willing and capable of working and are looking for work
EI “regular” benefits if permanently laid offMax: $573/week

*The amount of benefits will depend on your insurable earnings

For 14 weeks up to a maximum of 45 weeks

Maximum period of EI benefits depends on the local unemployment rate and the number of accrued insurable hours.

*There is normally a 1-week wait period

You must:
  • Have accrued enough insurable hours (ranging from 420 to 700 hours)
  • Have been without work and without pay for at least seven consecutive days in the last 52 weeks
  • Be ready, willing and capable of working and are looking for work
Work-Sharing AgreementsThis is an agreement between an employee, an employer, and Service Canada. It is intended to help avoid layoffs on account of a temporary reduction in business, due to circumstances beyond the employer’s control.

The employee receives EI benefits from the government, while also receiving a reduced salary from the employer at the same time.

The amount of the reduced salary payable by the employer will vary depending on the quantum of the reduced hours. But it will be at least 40% of the regular salary (if the workers hours have been reduced by the maximum of 60%).

Minimum duration is 6 weeks and maximum duration is 76 weeks.

The mandatory 1-week waiting period is waived.

  • The employer and employee must jointly apply to Service Canada.
  • The required reduction in an employee’s scheduled hours ranges from a minimum of 10% (one half day) and a maximum of 60% (three days).

Employers across Canada can call toll-free 1-800-367-5693.

Employees across Canada can call toll-free: 1-800-206-7218

Supplemental Unemployment Benefit Plan (SUBP)A SUBP is set up by an employer to top up employees' employment insurance (EI) benefits during unemployment.

The maximum under a SUBP (when combined with employee’s regular weekly EI benefit rate) cannot exceed 95% of the employee’s normal weekly earnings. The EI portion of the SUBP is 55%.

The government regulations do not set a minimum or maximum number of weeks for the payments.

The plan itself is to stipulate the maximum number of weeks for which the SUB payments will be payable

The SUBP must be approved by Service Canada.

Employer should be registered with Service Canada otherwise top-up payments are deducted from the employee’s EI benefits (as they would be considered EI-insurable income).

Income Tax Payment Deferral
  • The deadline for individuals to file their income tax return has been extended to June 1, 2020. The deadline to pay taxes has been extended to September 1, 2020.
  • For self-employed individuals and their spouses, the filing deadline of June 15, 2020 is unchanged. However, the payment date including the June 15, 2020 installment payment has been extended to September 1, 2020.

BENEFITS FOR BUSINESSES/EMPLOYERS

What Benefit?How much?For How long?Who qualifies?
Canada Emergency Wage Subsidy (CEWS)A temporary wage subsidy equivalent to up to 75% of employees’ salaries retroactive to March 15, 2020, to a maximum of $847 per week.

Note: The Government of Canada website now has a calculator to assist employers calculate their subsidy amount.

12 weeks, from March 15 to June 6, 2020.

Processing of payments to the business will take an estimated 3 to 6 weeks.

It is available to employers of all sizes and across all sectors across the country, but the employee must show:
  • A drop in gross revenues of at least 15% in March (compared to the previous year), and
  • 30% in April and May 2020 (compared to the previous year).

Once an employer meets the revenue decline criteria for a qualifying period, the employer is deemed to meet that same condition for the next reference period. However, employers must re-apply for the CEWS each month.

When available, the application will be through CRA’s My Business Account portal.

The government is also proposing that CEWS-eligible employers also receive a complete refund on certain employer contributions to EI, CPP, as well as the Quebec Pension Plan and the Quebec Parental Insurance Plan paid by employers for employees who are on leave with pay.

Note: 1) If the employer does not end up meeting the eligibility requirements, it will have to repay any received amounts. 2) If the employer makes a fraudulent claim or artificially reduces their revenue to in order to qualify, there may be additional penalties.

Temporary Business Wage Subsidy10% Temporary Wage Subsidy, up to $1,375 for each eligible employee to a maximum of $25,000 total per employer.

It will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA).

Maximum of 3 months, from March 18, 2020 to June 19, 2020.Eligible employers are:
  • An individual (excluding trusts), certain partnerships, non-profit organizations, registered charities, or a Canadian-controlled private corporation eligible for the small business deduction;
  • Those with existing business number and payroll program account with the CRA on March 18, 2020; and
  • Also pay salary, wages, bonuses, or other remuneration to an eligible employee.

For employers that are eligible for both the CEWS and this subsidy, any benefit from this subsidy reduces the amount available to be claimed under the CEWS in that same period. CEWS does not replace this subsidy.

Business Credit Availability Program (BCAP)The federal government has set up the BCAP to provide $40 billion of additional assistance through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) for small and medium-sized business.

This BCAP includes a Loan Guarantee program as well as a Co-Lending Program for these businesses.

Qualifying businesses would receive incremental credit amounts of up to $6.25 million through the BCAP.

The rollout estimated date is mid-April.

The BDC and EDC have not yet indicated the duration of the program.

The Minister of Finance has advised that “all credit-worthy businesses with viable business models whose activities fall within the mandate of either BDC and/or EDC are eligible to benefit from BCAP.”

Interested businesses should contact their respective bank, credit union, etc.

Canada Emergency Business Account (CEBA)CEBA will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover operating costs during the time period where revenues have been temporarily reduced.

No interest will apply on the amount borrowed until January 1, 2023, at which time, interest will accrue on the balance of the term loan at the rate of 5% per annum, payable monthly on the last day of each month.

Depending on the amounts being repaid by a business, it is possible for up to $10,000 of the total amount to be forgiven.

CEBA rollout has commenced.

It will be funded as a revolving line of credit until December 31, 2020.

After that date, any outstanding balance will be converted a non-revolving 5-year term loan to mature on December 31, 2025.

On that date, the balance must be paid in full.

To be eligible to apply, a business must have:
  1. Been operating as a Canadian company as of March 1, 2020
  2. Had an annual payroll of between $50,000 and $1 million
  3. Had a 15-digit Canada Revenue Agency number; and
  4. Likely not be behind on other credit/lending products

Sole proprietors who do not issue T4 slips do not qualify.

Interested businesses should contact their respective bank, credit union, etc.

Ontario-Canada Emergency Commercial Rent Assistance (OCECRA) OCECRA will reduce commercial rent for small businesses by 75% through the following:
  • Providing forgivable loans to qualifying commercial property owners to cover 50% of rent payable by their tenants experiencing financial hardship during April, May, June
  • The loan will be forgiven if the property owners agree to reduce their tenants’ rent for April, May, and June by at least 75% and agrees to not evict a tenant while the rental forgiveness agreement is in place. The tenant covers the rest of the rent, up to 25%.
Available until September 30, 2020 and would cover rents from April 1 to June 30, 2020.

(Program operational in mid-May, rent alleviation retroactive to April 2020)

To qualify, the commercial tenant must:
  1. Been operating as a Canadian company as of March 1, 2020
  2. Must be paying less than $450,000 per month in rent
  3. Have temporarily ceased operations OR have experienced at least 70% drop in pre-COVID revenue
  4. Can be a business, charitable organization, or a non-profit

This is a Canada-provincial collaboration and will be administered through the Canada Mortgage and Housing Corporation.

Details will be provided as they become available.

Income Tax Payment Deferral
  • Corporate tax filings a due date on or after March 18 and before June 1, 2020, the deadline for filing is extended to June 1, 2020.
  • Corporate taxes due on or after March 18 and before September 1, 2020, that payment date has been extended to September 1, 2020.
Sales Tax Remittance Deferral
  • HST payments due after February have been deferred to June 30, 2020.
WSIB Payment Deferral
  • Businesses covered by Ontario’s WSIB coverage can defer payments until August 31, 2020 without interest or penalty.
By |2020-09-04T15:23:01-04:00April 13th, 2020|Article, Article-All, Covid-19|0 Comments

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