April 7, 2020
Below are details on the various government programs for Businesses and Individuals during COVID-19 as of April 7, 2020
Canada Emergency Wage Subsidy (CEWS)
The objective of this plan is to help employers keep employees working.
- 75% of salary on the first $58,700 per employee, to a maximum of $847 per week per employee. There is no limit per employer.
- Eligible employers include individuals, corporations and partnerships.
- Any business with at least a 30% decrease in revenue compared to current month of the previous year.
- CEWS would be claimed against wages in three periods March 15-April 11, April 12-May 9 and May 10-June 6. > I.E If there is a 30% revenue decrease for each of these periods you would be eligible to apply. Employers have to apply 3 times, once for each period.
- Employers are to pay employee wages first then apply for the CEWS through the CRAs business account portal. Payment will be received through direct deposit. Employers must keep detailed records.
- Employers must do “everything they can” to pay the other 25% of employee wages.
- The CEWS subsidy will be taxable to the employer as government assistance.
- Non-arms length’s employees are limited to pre-crisis earnings.
- You will need to attest to the decrease in revenue and keep detailed records. If it is determined that you are ineligible, you will need to repay the loan and anti-abuse rules will apply.
- If your corporation does not qualify for the CEWS program, you can apply through the 10% Temporary wage subsidy program (TWS) listed below
- ACTION: Apply through CRAs my business account portal.
- For complete information on the Canada Emergency Wage subsidy click here
10% Temporary Wage Subsidy (TWS)
The objective of this plan is to help employers keep employees working irrespective of revenue decrease.
- 10% of remuneration paid from March 18, 2020 to June 19, 2020
- Capped at $1,375 per employee to a max of $25,000 per employer
- Benefit capped by reducing payroll remittance
- Not a subsidy but a reduction in tax remittance.
- ACTION: Reduce your income tax remittance
Canada Emergency Business Account (CEBA) – Loan for up to $40,000
The objective of this plan is to help businesses with an interest free loan
- Up to $40,000 interest-free loan for small businesses and not-for-profit organizations.
- If repaid by Dec 31, 2022, up to 25% is forgivable (up to $10,000).
- Organizations that paid between $50,000 and $1 million in payroll for 2019.
- Organizations that have had their revenues temporarily reduced.
- Financial evidence is required.
- ACTION: Apply through your online banking. We expect this to be up online by April 15, 2020
Employment insurance (EI)
The one-week waiting period is waived for new claimants who are quarantined and a medical certificate is not required to apply. Qualification for EI will still be on a case-by-case basis, taking into account regional rates of employment and the number of hours worked in the past 52 weeks. Apply here.
Canada Emergency Response Benefit
Passing of emergency legislation Bill C-13 on March 25 created the Canada Emergency Response Benefit, combining the two previously announced Emergency Care Benefit and Emergency Support Benefit. The benefit provides a taxable benefit of $2,000 a month for up to 4 months to:
- workers who must stop working due to COVID-19 and do not have access to paid leave or other income support.
- workers who are sick, quarantined, or taking care of someone who is sick with COVID-19.
- working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
- workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.
- wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
- ACTION Apply here.
Canada Child Benefit (CCB)
The Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, for the 2019-20 benefit year, by $300 per child. No action is required.
Goods and Services Tax Credit – Available in May 2020
The Government is proposing to provide a one-time special payment through the Goods and Services Tax credit (GSTC). The average boost to income for those benefiting from this measure will be close to $400 for single individuals and close to $600 for couples. No action is required.
Filing your tax returns
The Canada Revenue Agency will defer the filing deadline for the 2019 tax returns of individuals, including certain trusts, and corporations.
- Individuals, the filing deadline has been extended until June 1, 2020. The payment date for 2019 tax year has been extended to September 1, 2020.
- Self-employed, the filing deadline has not changed of June 15, 2020. The payment date for 2019 tax year has been extended to September 1, 2020.
- Corporations, for corporations that have a filing date after March 18 and before June 1, 2020, the filing date has has been extended to June 1, 2020.The payment date for 2019 tax year has been extended to September 1, 2020 for balanced and installments due under Part 1 of the income tax act.
- For complete detail see CRA filing payment dates
- No action is required
Mortgage Default Management Tools
The Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty. The Government, through CMHC, is providing increased flexibility for homeowners facing financial difficulties to defer mortgage payments on homeowner CMHC-insured mortgage loans. CMHC will permit lenders to allow payment deferral beginning immediately. See the CMHC website for COVID-19 updates.