April Update on Government Economic Measures
Updated: Apr 9, 2020
Over the past few days, few new economic measures have been announced by the Canadian government in connection to the COVID-19 outbreak, however some more details have been released regarding the wage subsidies and easy credit loans, among other things.
It was previously announced that the Temporary Wage Subsidy would go up from 10% to 75%. This has been clarified more, and it turns out the subsidy will not change but another subsidy - the Canada Emergency Wage Subsidy, will be released as an addition. Businesses can only make use of 1 of these subsidies at a time.
Here are some details about the Canada Emergency Wage Subsidy:
Applies at a rate of 75% of the first $58,700 normally earned by employees - representing a benefit of up to $847 per week. The program will be retroactive and affect payroll between March 15 and June 6th, 2020
Eligible employers must have suffered a drop in gross revenues of at least 30% in March, April or May, when compared to the same month in 2019
Eligible employers includes employers of all sizes and all sectors of the economy, with the exception of public sector entities.
For non-profit organizations and registered charities similarly affected by a loss of revenue, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their circumstances. The government is also considering additional support for non-profits and charities, particularly those involved in the front line response to COVID-19. Further details will be announced in the near term.
An eligible employer's entitlement to this wage subsidy will be based entirely on the salary or wages paid to employees. All employers will be expected to at least make best efforts to top up salaries to 100% of the maximum wages covered.
Eligible employers would be able to access the Canada Emergency Wage Subsidy by applying through a Canada Revenue Agency online portal. More details regarding how to apply for the program will follow.
Those organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 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.
Small Business Loans
As previously announced, small businesses will be able to apply for a loan of up to $40,000. Here's a breakdown of the details we have so far:
Interest free until December 31st, 2022
Up to 25% of loan will be forgiven
Eligible businesses must have paid at least $50,000 in payroll in the year of 2019.
Applications expected to open in the middle of April. More Details to come.
On Monday April 6th, applications for the Canada Emergency Response Benefit became available. To avoid system overloads, applicants are asked to apply in relation to their month of birth:
The benefit will be available to workers:
Residing in Canada, who are at least 15 years old;
Who have stopped working because of COVID-19 or are eligible for Employment Insurance regular or sickness benefits:
Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment income.
The income of at least $5,000 may be from any or a combination of the following sources: employment; self-employment; maternity and parental benefits under the Employment Insurance program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan.
The Benefit is only available to individuals who stopped work as a result of reasons related to COVID-19. If you are looking for a job but haven’t stopped working because of COVID-19, you are not eligible for the Benefit. Credit Card Interest Rates
On April 6th, Prime Minister Justin Trudeau announced that major banks and certain credit unions will cut credit card interest rates in half for for Canadians experiencing financial difficulty as a result of the pandemic.
We are looking for updates on the various economic measures being released for businesses and individuals on a daily basis, and will continue to inform you as soon as we have more useful information.