Support for Individuals and Children
Canada Emergency Response Benefit:
This is the $2,000 per 4 week period payment that has rolled out and is available to individuals who are not eligible for EI. This benefit was also includes individuals who earn non-eligible The benefit expanded to capture individuals who are still working during the shutdown. It now allows you to earn up to $1,000 per month. These changes are in place now, and are going to be implemented retroactively dating back to March 15th.
There has also been an announcement of a new top-up of salary to essential workers involved in certain sectors including hospitals, nursing homes, and food and retail supply chains and who are earning less than $2,500 a month. This helps provide dividend income from a small business corporation that they are shareholders of).
Who is eligible?
- Must be a resident of Canada and who are at least 15 years old;
- Stopped working because of COVID-19 and have not voluntarily quit their job or are eligible for EI regular or sickness benefits;
- Have an income of at least $5,000 in 2019 or in the 12 months prior to the date of their application (Note that – this previously only included employment or self-employment income)
The application itself can be done on your CRA My Account or via an automated telephone service. Whether you are eligible for EI or not, the application site currently handles both these claims. For more information, please visit the following links:
To review the conditions, answer the quiz at this link – https://www.canada.ca/en/services/benefits/ei/cerb-application.html
Canada Child Benefit:
This is a monthly payment that is tax-free made and eligible to families to help with raising children under 18 years of age during this pandemic. If you currently receive the Canada Child Benefit, the amount will be increased by $300 per child for your May payment.
To review conditions and apply, click link below:
Ontario – Support for Families:
There is a $200 per child ages 0-12 (disabled – $250 ages 0-21) payment towards the cost of home- schooling children while daycares and schools are closed. Anyone with a child that was in a daycare centre or school can apply for this funding. Please make sure you receive a confirmation email as I have heard the page can have technical issues because of the overwhelming volume of applications.
Parents/guardians must submit one application per child. Only one parent / guardian may apply for each child
For more information and to apply, please visit:
Support for Businesses
There are two programs for businesses with employees on payroll to provide wage support for individuals, this includes a 75% subsidy and the newly added 10% subsidy.
Canada Emergency Wage Subsidy – 75% Subsidy:
Major changes have gone through this program involving both the eligibility and the subsidy amounts. This is also included for new employees to receive a 75% subsidy as well. As a Canadian employer whose business has been affected by COVID-19, you may be eligible for a subsidy of 75% of employee wages for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020.
Owner’s and non-arm’s length employees are eligible; however, their subsidy amounts are limited to 75% of the average weekly payroll payments they received from Jan 1 to March 15, 2020 up to $847 per week. In other words, an owner who did not take payroll payments in that time, or who received dividends instead is not eligible. The amount is calculated as either 75% of the employee’s current pay or 75% of their pre-crisis pay, whichever is greater and up to a maximum of $847 per week. This means that you can pay the employee a reduced salary and claim up to 100% of their salaries under this grant. This is by design as the government’s objective is to have businesses rehire employees even if they are not able to work during this time.
Who is eligible?
- Self-employed individuals, corporations, partnerships, NPOs and charities that employ individuals and have a payroll account open with CRA.
- These organizations must have seen a 15% drop in their revenue during the March 2020 period and this program requires an application to be submitted. The drop for April and May 2020 remains 30%.
- If a business is retaining or re-hiring an employee even though the employee is not working, they are also eligible to receive a subsidy of the Employer portion of EI and CPP paid. This is announced to support businesses re-hiring employees who have been laid off while there is no work for them or while they have to stay home to take care of family members etc.
Applications are open now and to be done through your My Business Account with CRA. Payments are expected in the first week of May.
For more information on this subsidy, please visit the following link: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html
Temporary Wage Subsidy for Employers – 10% Subsidy:
The Government announced a 10% temporary wage subsidy for employers for a period of 3 months.
This program was announced earlier and already came into effect. It has less stringent requirements and does not require an application but rather is self-assessed when submitting payroll deductions. This subsidy started on March 18, 2020 and is calculated at 10% of gross pay up to $1,375 per employee and up to $25,000 per employer.
Who is eligible?
- Eligible employers (individuals (excluding trusts), certain partnerships, non-profit organizations, registered charities, or Canadian-controlled private corporations) who pay salary, wages, or taxable benefits to employees, between March 18, 2020 and June 19, 2020, can reduce payroll remittances of federal, provincial, or territorial income tax. (This measure is only applicable to remittances made to the CRA.)
- Have an open payroll account and it is available to self employed individuals, partnerships, Canadian controlled private corporations, NPOs and charities.
To see the full list of terms and eligibility please see the visit full list at this link: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html
Canada Emergency Business Account:
The terms of this loan have been updated to include businesses with total payrolls of $20,000 to $1,500,000 in 2019. It is a line of credit type account and the application for it is currently available for up to $40,000 of financing. This will carry no interest until December 31, 2022 and if 75% of the loan is repaid by that date the remaining 25% will be eligible for complete forgiveness. Applications for this loan are done through the financial institution where you have your business accounts.
It seems that they have also added broad terms to the permitted spending of these funds, including non- deferrable operating expenses such as payroll, rent, utilities, property taxes and regular debt payments. Usage is not permitted for refinancing debt, paying dividends or increasing management compensation.
Canada Emergency Commercial Rent Assistance:
A new program is being developed for small businesses which will consists of loans and forgivable loans to commercial property owners who in turn would forgo rent of small businesses for the months of April, May and June.
*A new program has been created to support business shutdown by providing subsidized rent through commercial landlords. Businesses with less than $2M in sales and who experienced a 70% reduction in revenues are eligible for relief on their rent up to 75% provided their monthly rent in less than $50,000. This application is done by the commercial landlord and is expected to roll out soon.
Canada Emergency Bank Account:
A new line of credit type account is available now for businesses with a 2019 payroll between $50,000 and $1,000,000. This will carry no interest until December 31, 2022 and if 75% of the loan is repaid by that date the remaining 25% will be eligible for complete forgiveness. Applications for this loan will be done through your financial institution
Other support: Deferral of GST/HST Remittances
The CRA will allow all businesses to defer, until the end of June 2020, any GST/HST payments or remittances that become owing on or after March 27, 2020, and before June 2020. This means that no interest will apply if your payments or remittances are made by the end of June 2020.
Learn more: FAQs for deferral of GST/HST Tax Remittances
I hope this helps put a bit of clarity into the programs available. Things are changing very fast right now and the government programs are being revised so the information above may become outdated quickly. There is a lot of confusion about these programs as they roll out. If you have any more questions or are not sure how to handle some of the items above, please don’t hesitate to reach out via my email or business number on my contact page.
Stay safe, as we are all in this together.