Support for Individuals and Businesses

Learn what support is available for individuals and businesses during this unprecedented time.

 

Support for Individuals and Businesses

COVID-19 Government Support

COVID-19 Economic Response Plan - Checklist and Guidance: see the link here - last updated April 1, 2020

Support for Individuals and Businesses: see the link here or read below - last updated April 1, 2020

Temporary Wage Subsidy for Employers: see the link here or read below - last updated April 1, 2020

Canada Emergency Response Benefit (CERB): see the link here or read below - last updated April 6, 2020

EI Work-Sharing Program: see the link here or read below - last updated April 1, 2020

Canada Emergency Wage Subsidy: See the link here or read below - last updated April 1, 2020

COVID-19 Cash Flow Planning for Individuals: See link here - last updated April 6, 2020

* Finance Department defers final details on 75% wage subsidy announced March 27th until Parliament can approve – hopefully the week of April 6th. News release with details available at this time here - https://www.canada.ca/en/department-finance/news/2020/04/the-canada-emergency-wage-subsidy.html

 

Support for Canadians

Employment Insurance (EI) Sickness Benefits

For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for sick individuals, the Government is:

  • Waiving the one-week waiting period for those individuals in imposed quarantine (imposed by law, public-health official or even if asked by their employers when public-health officials recommend it) that claim Employment Insurance (EI) sickness benefits. This temporary measure is in effect as of March 15, 2020.
  • Waiving the requirement to provide a medical certificate to access EI sickness benefits.

Canada Emergency Response Benefit (CERB)

Provides workers a taxable benefit of $2,000 every 4 weeks for up to 16 weeks to help workers, whether employed or self-employed.  COVID-19.

The CERB would cover Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.

Application details will be available through My CRA and My Service Canada, beginning the first week of April.

Emergency Care Benefit And Emergency Support Benefit

- replaced on March 25, 2020 with the CERB.

EI Work-Sharing (WS) Program

Workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers can receive EI benefits for an extended period of up to 76 weeks due to the downturn in the business as a result of COVID-19.

To apply for the Work-Sharing program, employers must submit:

Completed applications must be submitted using the following means:

Income Support for Individuals Who Need It Most

For low- and modest-income families, a one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC). The average boost to income for those benefitting from this measure will be close to $400 for single individuals and close to $600 for couples.

An increase to the maximum annual Canada Child Benefit (CCB) payment amounts - families will receive an extra $300 per child as part of their May 2020 payment.

Placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans by early April 2020.

Reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.  Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan. Those that already made their minimum withdrawal for 2020 will not be able to repay the 25% by end of 2020 without penalty.

Flexibility for Taxpayers

For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020.  However, individuals who expect to receive benefits under the GSTC or the Canada Child Benefit are encouraged to not delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.  There was no mention of an extension provided to self-employed individuals, who we assume will continue to have a June 15, 2020 filing deadline.

For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020. For trusts with a filing due date in April or May, the return filing due date will be deferred until June 1, 2020.

CRA will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period. 

Role of Financial Institutions

Canada’s large banks have confirmed that this support will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products.

 

Support for Businesses

Business Credit Availability Program

  • Small Business Loan (Link)
    • Loans up to $100,000 to buy equipment, software or other business expenses
    • Capital payment can be postponed for the first 6 months and repaid over five years
  • Working Capital Loan (Link)
    • Loans of more than $100,000 for working capital or supplement a line of credit
    • Payments can be matched to cash flow patterns
    • Personal assets will not be taken as collateral for the loan
  • Purchase Order Financing (Link)
    • Cover up to 90% of the PO amount associated with larger sales
    • Shorter terms than Working Capital Loan

Canada Emergency Business Account

On March 27, 2020, the government announced that banks will offer a government guaranteed interest free loan up to $40,000 with the potential for $10,000[1] to be forgiven for small businesses and not-for-profits.  To qualify, need 2019 payroll of $50,000 to $1 million.  Businesses and not-for-profits will need to contact their financial institution to access this loan.

Temporary Wage Subsidy For Employers

Provides eligible small employers a temporary wage subsidy for a period of three months.  The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee (even employees related to the employer) and $25,000 per employer (associated corporations will not be required to share the maximum).

Employers benefiting from this measure will include corporations eligible for the small business deduction, individuals, certain partnerships as well as non-profit organizations and charities.  Any benefit received under this subsidy will reduce the amount the employer gets from the Canada Emergency Wage Subsidy (if applicable).

Canada Emergency Wage Subsidy

Provides eligible small employers a temporary wage subsidy for a period of twelve weeks.  The subsidy will be equal to 75% of remuneration paid during that period, up to a maximum subsidy of $847 per week per employee (based on first $58,700 of annual salary normally earned per employee) between March 15, 2020 and June 6, 2020.

Employers benefiting from this measure will be all Canadian businesses (excluding public sector entities) that have suffered a drop in gross revenue of at least 30% in March, April or May, when compared to the same month in 2019.  Those organizations that do not qualify for the Canada Emergency Wage Subsidy may qualify for the previously announced Temporary Wage Subsidy for Employers.

Flexibility for Businesses Filing Taxes

For Corporations with a filing due date after March 18, 2020, will be deferred to the later of June 1, 2020 or six months after year-end.

For Partnerships with a December 31, 2019 year-end, the due date for the T5013 tax filings will be deferred to May 1, 2020.

Businesses can defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020 and before September 2020.  This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.  

The deferral does not apply to Part IV tax due.  Also, if the corporations with a calendar year-end, has a February 29, 2020 balance due-date instead of a March 31, 2020 balance due-date, there appears to be no deferral opportunity on this balance owing as it became owing before March 18, 2020.

Announced on March 27, 2020, businesses can defer GST/HST remittances until June 30, 2020 as follows:

  • Monthly filers - amounts collected for the February, March and April 2020 reporting periods;
  • Quarterly filers - amounts collected for the January 1, 2020 through March 31, 2020 reporting period; and
  • Annual filers – return balances or instalment that are due in March, April or May 2020. 

The Canada Revenue Agency will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For most businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.


[1] Repaying the balance of the loan on or before Dec 31, 2022 will result in loan forgiveness of 25% (up to $10,000).

 

 

Temporary Businesses Wage Subsidy

Provides eligible small employers a temporary wage subsidy for wages paid between March 18, 2020 and June 20, 2020.  The subsidy will be equal to 10% of remuneration paid during that three month period, up to a maximum subsidy of $1,375 per employee (even employees related to the employer) and $25,000 per employer (associated corporations will not be required to share the maximums).

Which Employers are Eligible?

An employer is eligible if:

  • has an existing business number and payroll program account with CRA on March 18, 2020; AND
  • employs one or more eligible employees[1]; AND
  • is any of
    • (i) a Canadian-controlled private corporation (CCPC) [2],
    • (ii) an individual (other than a trust),
    • (iii) a partnership, all of the members of which are described in (i) to (iii) or (v),
    • (iv) non-profit organization, and
    • (v) a registered charity.

Public corporations and large private corporations are not eligible employers AND are not eligible members of a partnership listed above.

Any benefit received under this subsidy will reduce the amount the employer gets from the Canada Emergency Wage Subsidy (if applicable).

How Will Employers Receive the Subsidy?

Once employers have calculated the subsidy for a pay period, they can reduce the income tax portion of the payroll remittance by the amount of the subsidy.  NOTE – employers can’t reduce the portion of the remittance related to CPP or EI.  If the income taxes deducted are not enough to offset the value of the subsidy in a specific pay period, the employer can reduce future payroll tax remittances to benefit from the subsidy (even if remittance periods after the June 20, 2020 pay period).

If employers choose not to (or forget to) reduce the payroll remittances during the year, employers can still ask for the subsidy to be paid or credited to the next year’s remittance.

What Books and Records are Needed to Support the Subsidy?

Employers will need to keep the following information:

  • total remuneration paid March 18, 2020 to June 20, 2020;
  • income tax deducted from that remuneration; and
  • the number of employees paid in that period.

Is the Subsidy Taxable?

Yes, employers must report the total amount as income in the year in which the subsidy is received.


[1] Eligible employee means an individual who is employed in Canada.

[2]  CCPCs are only eligible if their taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, is less than $15 million and eligible for the small business deduction.

 

 

Canada Emergency Response Benefit (CERB)

Provides a taxable benefit of $2,000 every 4 weeks for up to 16 weeks to help workers.

Which Workers are Eligible?

A worker is eligible for the CERB if:

  • a person resident in Canada who is at least 15 years of age;
  • has total income of at least $5,000[1] in 2019 or in the 12 months preceding application; AND
  • meets the following:
    • (i)  the worker, whether employed or self-employed, ceases working for reasons related to COVID-19 for at least 14 consecutive days within the four-week period in respect of which they apply for the CERB, and
    • (ii)  they do not receive income, EI or any other benefits during that period they ceased working.

The CERB would cover Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.

What About Workers Who Qualify for EI?

Canadians who are already receiving EI regular and sickness benefits as of March 25, 2020 would continue to receive their benefits and should not apply to the CERB.  If their EI benefits end before October 3, 2020, they could apply for the CERB once EI benefits cease and if they are unable to return to work due to COVID-19. 

Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply.

Canadian who are eligible for EI regular and sickness benefits would still be able to access their normal EI benefits if still unemployed after the 16 week period covered by the CERB.

How do Workers Apply for the CERB?

Application details will be available through My CRA and My Service Canada, beginning April 6, 2020.

The CRA would like to provide the best service possible at this time and have set up specific days for you to apply. See below for guidelines:

Day to apply for the Canada Emergency Response Benefit

If you were born in the month of

Apply for CERB on

Your best day to apply

January, February, March

Mondays

April 6

April, May or June

Tuesdays

April 7

July, August, or September

Wednesdays

April 8

October, November, or December

Thursdays

April 9

Any month

Fridays, Saturdays, Sundays

 

Workers would begin to receive their CERB payments within 10 days of application.  The CERB would be paid every four weeks and be available from March 15, 2020 until October 3, 2020. No worker is permitted to file an application after December 2, 2020.


[1] Income must be from employment, self-employment, EI benefits or non-eligible dividends. 

What About Workers Who Qualify for EI?

Canadians who are already receiving EI regular and sickness benefits as of March 25, 2020 would continue to receive their benefits and should not apply to the CERB.  If their EI benefits end before October 3, 2020, they could apply for the CERB once EI benefits cease and if they are unable to return to work due to COVID-19. 

Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply.

Canadian who are eligible for EI regular and sickness benefits would still be able to access their normal EI benefits if still unemployed after the 16 week period covered by the CERB.

How do Workers Apply for the CERB?

Application details will be available through My CRA and My Service Canada, beginning the first week of April.

Workers would begin to receive their CERB payments within 10 days of application.  The CERB would be paid every four weeks and be available from March 15, 2020 until October 3, 2020. No worker is permitted to file an application after December 2, 2020.

 

 

EI Work-Sharing Program

Work-Sharing (WS) is a program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity beyond the control of the employer.  The COVID-19 is affecting most businesses in Canada and the WS program can be a viable option to help some businesses and their employees through this economic slow-down.  WS is a three-party agreement involving the employer, the employees[1] and Service Canada.


[1] Must be a minimum of two employees for a Work-Sharing agreement.

Which Employers are Eligible?

An employer is eligible if:

  • Has been in business in Canada year-round for at least one[1] year;
  • A private business, a publicly-held company, OR a not-for-profit organization[2]; AND
  • Can demonstrate that the slowdown[3] is not a result of:
    • i.            A labour dispute;
    • ii.            A seasonal shortage;
    • iii.            Pre-existing and/or recurring production slowdown; OR
    • iv.            A recent increase in the size of the work force.

[1] Reduced to one year from two years as part of the COVID-19 Economic Response Plan and eliminated the burden of having to provide sales/production figures at the same time.

[2] NPO’s must see an actual reduction in level of business not just reduction in revenue.

[3] A reduction in business activity by a minimum of 10% or more.

Which Employees are Eligible?

Employees are eligible if:

  • Are year round permanent full-time or part-time employees[1];
  • Eligible to receive EI benefits[2]; AND
  • Agree to a reduction[3] of normal working hours in order to share the available work.

[1] Referred to as “core employees” who are required to carry out the everyday functions of normal business activity – does not include casual or seasonal employees.

[2] Excludes employee shareholders with more than 40% of the voting shares.

[3] Must be (on average) a reduction of between a minimum of 10% (one half day) and a maximum of 60% (three days).

What is a Work-Sharing Unit?

A WS unit is a group of core employees who have agreed to participate in the WS program.    The unit generally includes all employees with either a similar job description or jobs that impact one another.  The key is that all employees in WS unit must reduce their hours equally.  A WS agreement may include more than one WS unit.

The WS unit will not include employees who are needed to help generate work or essential to the recovery of the business (for example, senior management or sales/marketing agents).

The members of each Work-Sharing unit will authorize an employee who will represent them in the agreement – Employee/Union representative.

What is Equal Sharing of Work?

All members of WS unit must agree to reduce their normal work hours and to share the available work.  Individual employees in the same job description cannot volunteer to participate in WS while others decline to participate and continue to work normal hours.  Member of a WS unit who do not qualify for or who choose not to accept EI benefits are still required to reduce their hours of work on an equivalent basis.

What is the Application Process?

To apply for the Work-Sharing program, employers must submit:

Completed applications must be submitted using the following means:

It takes approximately 10 days after submission before the agreement is approved and can begin.  It may take 2-3 week after program start date for employees to receive their first EI payment.

As part of the COVID-19 Economic Response Plan the maximum duration of the WS program has been extended from the usual 38 weeks to 76 weeks. 

Service Canada has also created an enquiry unit for clients affected by COVID-19 that are seeking information related to the Work-Sharing Program. Enquiries can be sent to EDSC.DGOP.TP.REP-RES.WS.POB.ESDC@servicecanada.gc.ca for specific Work-Sharing information or to request general information about the Program.

 

 

Canada Emergency Wage Subsidy

Provides eligible employers a wage subsidy for wages paid between March 15, 2020 and June 6, 2020.  The subsidy will be equal to 75% of remuneration paid during the month/period (based on first $58,700 of annual salary normally earned per employee), up to a maximum weekly subsidy of $847 per employee.  Employers are expected to “do their best” to top up the other 25% of the base $58,700 annual salary.

Which Employers[1] are Eligible?

An employer is eligible if:

  • employs one or more eligible employees[2]; AND
  • suffered a drop in gross revenue of at least 30% in March, April OR[3] May, when compared to the same month in 2019. 

How Will Employers Receive the Subsidy?

Eligible employers would be able to access the Canada Emergency Wage Subsidy by applying each month through a Canada Revenue Agency online portal[4] (likely through My Business Account – so ensure get registered as soon as possible). It is expected that funds will be available to the employer 6 weeks after applying. Those organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced Temporary Wage Subsidy for Employers (10 per cent of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer).  Any benefits received under the Temporary Wage Subsidy for Employers will reduce this subsidy (if applicable). 

What Books and Records are Needed to Support the Subsidy?

Employers will need to keep the following information:

  • Gross Revenue for each of March, April or May 2020 compared to the same month in 2019 – showing a 30% drop in each of the months that employers claim the subsidy;
  • Gross wages paid March 15, 2020 to June 6, 2020; and
  • the number of employees paid March 15, 2020 to June 6, 2020.

Is the Subsidy Taxable?

Yes, employers must report the total amount as income in the year in which the subsidy is received.

Information provided is based on preliminary announcements and final technical details will not be available until Parliament can approve the Canada Emergency Wage Subsidy.  This is expected to happen the week of April 6th so changes could still be made the final benefits and eligibility guidelines.


[1] Per Morneau’s announcement – the program applies to all Canadian business, both large and small, as well as non-profits and charities.  The only exception is public sector entities.

[2] Eligible employee means an individual who is employed in Canada.

[3] A business could qualify for one month, two months or all three months depending on the drop in revenue for each month compared to the same month in 2019.

[4] More details on how to apply for the program are to be released at a later date.



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