• Robert Balazs

COVID-19 Economic Support Measures

Updated: May 20



Over the past few weeks, we've been staying on top of and providing updates on the various government economic support that's being rolled out to businesses and individuals during the COVID-19 pandemic. Here's an overview of what's been announced or passed through the senate so far.


Individuals


EI Sick Benefit


  • 55% of insurable earnings

  • Up to $573/week

  • For up to 15 weeks

  • One-week waiting period waived

  • No medical certificate required during quarantine

  • Medical certificate required if tested positive to COVID-19 to receive EI benefits beyond initial period of the quarantine.

  • *REPLACED* by Canada Emergency Response Benefit (CERB).



Canada Emergency Response Benefit (CERB)


  • $2000 per month in support

  • Up to a maximum of 4 months

  • Apply through online portal

  • Eligibility:

- At least 15 years of age

- Sick, quarantined or left to care for someone sick or children due to school/daycare closures

- Laid off due to lack of work

- Working but not being paid by employer

- Self-employed and contract workers not eligible for EI benefits

- Available to Canadians who have exhausted their EI benefits since January 1st

- Seasonal workers unable to find work due to COVID-19

- Workers who earn up to $1,000 a month


  • Eligible applicants must have earned revenue of $5000 or more within the last 12 months or in the 2019 tax year. This includes:

- Employment

- Self-employment

- Maternity or parental benefits

- Allowances, money or other benefits paid to the person under a provincial plan because of pregnancy or in respect of the care by the person of one or more of their new-born children or one or more children placed with them for the purpose of adoption.



Canada Child Benefit


  • $300 extra per child

  • Payment scheduled with CCB for April



GST Credits


  • Up to $400 for individuals and $600 for couples

  • Payments will arrive in May

  • For low and modest income families

  • Must have filed 2018 tax return



Mortgage & Car Loan


  • Up to 6 months payment deferral

  • Case by case based with associated lenders



Personal Income Tax Returns


  • Filing deadline pushed to June 1st, 2020

  • Tax payments deferred to August 31st, 2020



Student Loans


  • Payments pushed by 6 months

  • No interest accrued for 6 months

  • Effective March 30th, 2020



Canada Emergency Student Benefit




Other Support for Students


  • Canada Student Service Grant

- Students volunteering instead of working will be eligible for $1,000 to $5,000 based on the work done

  • 76,000 student jobs will be created

  • Student grants will be doubled for the 2020-2021 school year. Additional funding will be made available to Inuit, Metis and First Nations students



Canada Summer Jobs Program


  • Canada Summer Jobs (CSJ) employers will receive a subsidy of up to 100% to cover the costs of hiring students.

  • Available to those who applied for the CSJ program by February 28th, 2020



Reduced Minimum RRIF Withdrawals


The required minimum withdrawals from Registered Retirement Income Funds (RRIFs) will be reduced by 25% for 2020. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.


Indigenous Communities


$305,000,000 Support Fund


  • Allocated by province

  • Funds can be used for measures including, but not limited to:

- Support for Elders and vulnerable community members

- Measures to address food insecurity

- Educational and other support for children

- Mental health assistance and emergency response services

- Preparedness measures to prevent the spread of COVID-19



$100,000,000 For Areas of Federal Responsibility


  • Purpose of funds is to:

- Respond to identified needs for updating and/or activating pandemic plans

- Support effective allocation of public health and primary health care capacity to respond to the COVID-19 outbreak

- Align response efforts with scientific evidence as determined by a medical officer of health

- Address immediate needs in the short term


Businesses


Temporary Wage Subsidy


  • 10% of payroll remittances from March 18, 2020 to June 19, 2020

  • Maximum of $1,375 per employee and $25,000 per employer.

  • Calculated manually and taken off payroll tax remittances.

  • Your business may be eligible for the Temporary Wage Subsidy if you:

- Are a non-profit organization, registered charity, or a Canadian-Controlled Private Corporation (CCPC);

- Have an existing business number and payroll program account with the CRA on March 18, 2020; and Pay salary, wages, bonuses, or other remuneration to an employee.


CCPCs are only eligible for the subsidy if their taxable capital within Canada in the preceding taxation year is less than $15 million. This is calculated on an associated group basis.



Canada Emergency Wage Subsidy (CEWS)


  • 75% of remuneration paid between March 15th and June 6th, 2020

  • Maximum of $847 per week

  • Includes salaries, wages and other remuneration like taxable benefits

  • Eligibility:

- Must have suffered a drop in revenues of at least 15% in March 2020 compared to March 2019 OR compared to January and February of 2020. Or,

- suffered a drop in revenues of at least 30% in April and May.

*Extended* Update as of May 15th:

  • The CEWS will be extended by 12 weeks until August 28th, 2020.

  • The required 30% revenue decrease threshold is being reviewed to make the program more widely available.

  • Eligibility extended to the following groups:

- Partnerships that are up to 50-per-cent owned by non-eligible members;

- Indigenous government-owned corporations that are carrying on a business, as well as partnerships where the partners are Indigenous governments and eligible employers;  

- Registered Canadian Amateur Athletic Associations;

- Registered Journalism Organizations; and

- Non-public colleges and schools, including institutions that offer specialized services, such as arts schools, driving schools, language schools or flight schools.



Employers eligible for the CEWS are also entitled to receive a 100% refund for certain employer contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan paid in respect of employees who are on leave with pay.



Extention of Work-Sharing Program


The Work-Sharing program helps employers who need to temporarily reduce employees' hours by providing EI benefits to employees who agree to reduce their normal working hours and share the available work while the employer recovers.


Here are the temporary special measures to help support employers and employees affected by COVID-19:


  • Max duration extended from 38 weeks to 76 weeks

  • Mandatory waiting period between agreements waived

  • Previous requirements for a recovery plan is reduced to a single line in application form

  • Eligibility of employers expanded to accept businesses that have been in business for 1 year rather than 2.

  • Requirement to provide sales/production figures waived

  • Eligibility expanded to cover Government Business Enterprises and not-for-profit organizations.

  • Extended eligibility for certain employees



Tax Deferrals


  • Income tax amounts that become owing on or after March 18th 2020 can be deferred until August 31, 2020

  • Businesses can defer GST/HST payments that become owing between March 27th and May 31st until June 30th. This also goes for customs duty owing on their imports.



Access to Credit


We've known about the Business Credit Availability Program for a while now, which will provide small and medium-sized businesses with $40 billion of additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).


This includes a loan guarantee from EDC and a co-lending program from BDC. These programs are announced to roll out in the middle of April.


The Canada Emergency Business Account will provide businesses with up to $40,000 loans:

  • Interest free until December 31st, 2022

  • $25 Billion in support

  • 25% may be forgiven

  • For businesses who had between $20,000-$1,500,000 in payroll in 2019. (Previously between $50,000 and $1,000,000)

  • Available since April 9th

*Update as of May 19th*

  • CEBA has been expanded to cover:

  • Sole owner-operators;

  • Those who depend on contractors

  • Family businesses that pay employees by dividends rather than payroll.

  • Will become available to new businesses

To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:

  • A business operating account at a participating financial institution

  • A Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return; and

  • Eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.


Commercial Rent Assistance


On Thursday April 16th, Prime Minister Justin Trudeau announced the Canada Emergency Commercial Rent Assistance program, which will be implemented to help businesses cover their rents in April, May and June.


The program will provide forgivable loans to qualifying commercial property owners to cover 50% of rent for 3 months for eligible tenants.


  • Eligible tenants must have a monthly rent of less than $50,000

  • 75% rent reduction

  • 50% covered by government, 25% covered by lessor. If lessor does not cover at least 25%, they will not be eligible for loan forgiveness on the 50%.

  • Tenant will cover the remaining 25%

  • Eligible tenants must have experienced at least a 70% drop in pre-COVID-19 revenues

  • Also available to non-profits and charitable organizations

  • Opens for applications on May 25th *Update as of May 19th*


The online application process will include both fillable fields and templates of the documents required. Property owners will need to provide information to prove eligibility including:


  • Proof of an existing rent reduction agreement

  • Moratorium on eviction, and

  • Small business tenant financial hardship (i.e. attestation of 70% decline in revenue)



We will continue to update this article and keep you informed on the most recent developments regarding economic support measures pertaining to individuals and businesses in Canada as a result of COVID-19.

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