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CHARTERED PROFESSIONAL ACCOUNTANT

Client Access

613-841-6040  |  [email protected]

FR

COVID-19

Government Relief Programs

Updated: October 13, 2020

Canada Recovery Benefit (CRB)

The CRB provides $500 per week for up to 26 weeks for workers who have stopped working or had their net income reduced by at least 50% due to COVID-19, and who are not eligible for Employment Insurance (EI). Here are some things to consider:

You must apply within 60 days of the end of the two-week period to which the benefits relate.

There is a ‘repayment’ on the CRB for a person who has income of more than $38,000 for the 2020 or 2021 year end (excluding income from this program, the CERB, the CRSB or the CRCB). The repayment will be 50 cent per dollar above $38,000.

The application will be done on a bi-weekly basis vs monthly for CERB.

Canada Recovery Sickness Benefit (CRSB)

The Canada Recovery Sickness Benefit (CRSB) provides $500 per week for up to a maximum of two weeks, for workers who:

Are unable to work for at least 50% of the week because they contracted COVID-19.

Have underlying conditions, are undergoing treatments or have contracted other sicknesses that, in the opinion of a medical practitioner, nurse practitioner, person in authority, government or public health authority, would make them more susceptible to COVID-19.

Are self-isolated for reasons related to COVID-19.

Canada Recovery Caregiving Benefit (CRCB)

The Canada Recovery Caregiving Benefit (CRCB) provides $500 per week for up to 26 weeks per household for workers.

The maximum of 26 weeks is shared within the same household, therefore only one spouse can claim it not both.

Unable to work for at least 50% of the week because they must care for a child under the age of 12 or family member because schools, day-cares or care facilities are closed due to COVID-19.

Because the child or family member is sick and/or required to quarantine or is at high risk of serious health implications because of COVID-19.

Canada Emergency Wage Subsidy (CEWS)

Who Can Apply

Period 1 to 4:

Taxable corporation, self-employed individual, registered charity, partnership or non-profit organization of all sizes that can show either:

  • Income decreased by 15% between March 2019 and March 2020, or
  • That the average of revenue from January and February 2020 compared to March 2020 has decreased by 15%.

These criteria will go up to 30% for the month of April and May of 2020.

  • Revenue can either be calculated under the cash method or accrued method.
  • Non-profit and charities will have the option to include or exclude government subsidy to show drop in revenue.

Period 5 to 10:

Taxable corporation, self-employed individual, registered charity, partnership or non-profit organization of all sizes that can show  a drop of revenue in the current month of the applicable period compared to either the same month in 2019 or the average of January and February 2020, or who had a drop of revenue the previous month when compared to the same month in 2019, or the average of January and February 2020.

Subsidy would apply to organizations that have qualifying employees such has:

  • Salaried employees (not subcontractors)
  • Shareholders who were employees (T4 salary) prior to the crisis would see their wages post-crisis eligible for the wage subsidy as well. Same rule for any employee dealing at arm's length with the business.

What To Expect

Period 1 to 4:

  • Subsidy of up to 75% of the total salary, excluding CPP and EI, to a maximum of $847 per week per employee, OR 75% of the total salary pre-crisis to a maximum of $847 per week per employee

Period 5 to 10:

  • Subsidy will depend in which period you are in, and how much of a revenue drop the business incurred during the period in question, to a maximum of $960 per week.

Application to all periods:

  • Subsidy is fully taxable.
  • Must still pay CPP and EI on the payroll. Unless the employee is under paid leave, then the subsidy would also cover the employer’s portion of the CPP, EI, QPP and QPIP.
  • Strict penalties will apply to those who try to modify the revenue to qualify.
  • CRA has the ability to publish the list of employers who apply for the subsidy.

How/When To Apply

Once it is set up, application will be done through the “my business account” online.

Click here to read the full article on the CEWS program,

  • Newly hired and re-hired employees would also see their wages qualify for the subsidy within restrictions. We recommend to look over our graphic for further explanation on eligibility when it comes to period 1 to 4 and read our article for period 5 to 10.

Useful Links

Canada Emergency Wage Subsidy Claim Periods

Claim Period Claim period (for eligible remuneration purposes) Current reference period Prior Reference Period (if elected)
Period 1 Mar 15, 2020 – Apr 11, 2020 Mar 2020 Mar 2019 OR Average of Jan – Feb 2020
Period 2 Apr 12, 2020 – May 9, 2020 Apr 2020 Apr 2019 OR Average of Jan – Feb 2020
Period 3 May 10, 2020 – Jun 6, 2020 May 2020 May 2019 OR Average of Jan – Feb 2020
Period 4 June 7, 2020 – Jul 4, 2020 June 2020 June 2019 OR Average of Jan – Feb 2020
Period 5 Jul 5, 2020 – Aug 1, 2020 July 2020 July 2019 OR Average of Jan – Feb 2020
Period 6 Aug 2, 2020 – Aug 29, 2020 Aug 2020 Aug 2019 OR Average of Jan – Feb 2020
Period 7 Aug 30, 2020 – Sep 26, 2020 Sep 2020 Sep 2019 OR Average of Jan – Feb 2020
Period 8 Sep 27, 2020 – Oct 24, 2020 Oct 2020 Oct 2019 OR Average of Jan – Feb 2020
Period 9 Oct 25, 2020 – Nov 2020 Nov 2020 Nov 2019 OR Average of Jan – Feb 2020
Period 10 TBD, but no later than Dec 31 TBD TBD

Canada Emergency Wage Subsidy Decision Tree (period 1-4)

Updated April 14, 2020

Please note: The CEWS Subsidy Decision Tree is only a brief summary of our interpretation of how the legislation may work with common situations. A more in-depth analysis would be required before making any decisions.

Download: CEWS Decision Tree.pdf

Calculating CEWS 2.0 subsidy (period 5-10)

Period Base percentage calculation (maximum is reached when revenue reduction is 50% or greater) Base percentage maximum
5 & 6 1.2 x (revenue reduction % of either current or prior claim period, whichever higher) 60%
7 1.0 x (revenue reduction % of either current or prior claim period, whichever higher) 50%
8 0.8 x (revenue reduction % of either current or prior claim period, whichever higher) 40%
9 0.8 x (revenue reduction % of either current or prior claim period, whichever higher) 40%
10 0.8 x (revenue reduction % of either current or prior claim period, whichever higher) 40%

+

Top up percentage (applies if at least 50% of 3-month reduction maxes out at 75%)
Top up calculation for P5 – P10 Top up maximum
1.25 x (3-month reduction percentage – 50%) *can’t be negative 25%

x

a) If an employee is arm’s length, then the employee’s eligible remuneration for the claim period to a maximum of $1,129 per week

b) If an employee is non-arm’s length (shareholders) then the least of :

i) Eligible remuneration for the claim period

ii) Baseline remuneration

iii) $1,129 per week

 

It was announced on October 9th that the maximum rate of 65% (40% + 25%) will stay in place until December 2020, and that the program will be extended until June 2021. New legislation will have to be put in place for the extension of what would be period 11 to 16.

Download: Canada-Emergency-Wage-Subsidy.pdf

Temporary Wage Subsidy for Employers 10% Program

Who Can Apply

  • Self employed, CCPC (Canadian control private corporation), Not for profits-You had a payroll account on March 18, 2020
  • You are paying employees a salary
  • If you don’t qualify for the 75% wage subsidy program

What To Expect

  • 10% subsidy of the total paid salary during the period of March 18 to June 2020
  • To a maximum of $1,375 per employee and $25,000 for the business

How/When To Apply

  • Immediate application
  • The employer must reduce the total deduction at source it pays to the government by the amount it is entitled to, per employee
  • You must continue to pay CPP and EI, if there is not enough deduction to claim the full 10%, then it can be taken in the next period
  • If you choose not to reduce your payroll remittance during the year, you can still calculate the subsidy and request payment at the end of the year

Frequently Asked Questions

Canada Emergency Business Account $40,000 Guaranteed Loan

Who Can Apply

  • Available for small businesses and non-profits with a payroll between $20,000 and $1,000,000 in 2019
  • For businesses that don’t have any salary or not enough, they can still qualify if they have $40,000 of non deferable expenses for 2020

What To Expect

  • Loan of up to $40,000 guaranteed by the government
  • No interest for 12 months
  • 25% can be converted to a forgivable loan if full loan reimbursed by December 31, 2022

How/When To Apply

  • Contact your business bank branch to learn of eligibility and application process
  • The application deadline has been extended to December 31, 2020

Updated: October 9, 2020

It was announced that an expanded CEBA loan of $20,000, of which $10,000 would be forgivable if repaid by December 31, 2022, for eligible businesses and non-profit, that continue to be seriously impacted by the pandemic. Further details still to come.It is also expected that the requirement to have a business account for sole proprietor be changed to allow more small businesses to apply. Further details still to come.

Useful Links

The new Canada Emergency Rent Subsidy (CERS) – more details to come

Who Can Apply

  • For qualifying organizations who have been impacted by COVID-19.
  • Unfortunately, at this time, we do not have much information about the program and await legislation.

What To Expect

  • This program would run until June 2021 and would be provided directly to tenants
  • Subsidy would be on a sliding scale, up to a maximum of 65% of the qualifying entity eligible expenses until December 19, 2020.
  • Organizations would be able to make claims retroactively for the period that began September 21 and end October 24, 2020.

How/When To Apply

  • Unfortunately, at this time, we do not have much information about the program and await legislation.

As of September 27th, you may be eligible for EI if you:

  • were employed for at least 120 insurable hours in the past 52 weeks
  • received the CERB, the 52-week period to accumulate insured hours will be extended
  • stopped working through no fault of your own
  • have not quit your job voluntarily
  • are ready, willing and capable of working each day (EI regular benefits)
  • are temporarily unable to work while you care for someone else or yourself (EI maternity, parental, sickness, compassionate care, and family caregiver benefits)

If you are eligible for EI benefits, you will receive a minimum taxable benefit at a rate of $500 per week, or $300 per week for extended parental benefits.

Useful Links

Other Financing Options

Business Credit Availability Program (BCAP)

  • Loan of up to $2,000,000
  • Interest rate of variable -1.75% (currently at 3.30%)
  • Flexible payment schedule
  • Meant for businesses that would have been eligible for a loan prior to COVID-19 crisis

Small and Medium-sized Enterprise Loan and Guarantee Program

  • Low interest rate
  • Flexible repayment
  • EDC and BDC can guarantee loan up to 80%
  • Contact your business bank branch to learn of eligibility and application process

Business Credit Availability Program (BCAP)

New Small and Medium-sized Enterprise Loan and Guarantee program

Other Important Information

Shareholder of corporations can apply as long as all criteria are respected. Expectations would be that the corporation business has been severely impacted by COVID-19. Payment expectation is 3 days after application if registered for direct deposit, 10 days by mail. In order to avoid red tape, the government will move forward with the CERB on an honour system, meaning there will be minimal obstacles to obtaining the $2,000 per month. If an individual is deemed to have received the sum and was not entitled to it, they must then reimburse the government without interest. CERB will replace the EI program during the March 15th to October 3rd period. Individuals already on EI will automatically merge to CERB with no application needed, and their amount will either go down or up to the CERB maximum of $2,000 per month.

Direct Deposit Registration

Application Process

Canada Emergency Response Benefit (CERB)

(Program has ended)

Who Can Apply

  • Over the age of 15.
  • Earned income from employment, self-employment, government benefits related to parental leave or none eligible dividend of at least $5,000 in 2019 or beginning of 2020.
  • The worker ceased working for reasons related to COVID-19 for at least 14 consecutive days within the 4 week period of which the application is for.
  • UPDATE: Individual will be allowed to earn up to $1,000 per month while collecting CERB.

What To Expect

  • For period between March 15th and October 3rd 2020, the amount will be of $2,000 (single taxable payment) per 4 week period, for a maximum of 16 weeks.
  • Individual must reapply every 4 weeks to confirm eligibility.

When to Apply

If you were born in:

  • January, February or March: Monday April 6th
  • April, May or June: Tuesday April 7th
  • July, August or September: Wednesday April 8th
  • October, November, December:Thursday April 9th
  • No restrictions post April 9th

How to Apply

A) Online: by logging onto your ‘’my CRA’’ account and then:

  • 1. Go to COVID-19: Canada Emergency Response Benefit in the alert banner at the top of the page
  • 2. Select the period you want to apply for
  • 3. Declare that you qualify for the benefit
  • 4. Confirm we have the right payment information

B) By phone: 1-800-959-2019

Filing Due Dates

(all have passed)

Individuals

New Due Date

June 1, 2020

Usual Due Date

April 30, 2020

Self-Employed

New Due Date

June 15, 2020

Usual Due Date

June 15, 2020

Corporations

New Due Date

June 1, 2020: For corporations with a usual due date between March 18 and June 1, 2020

Usual Due Date

Six months after year end

Charities

New Due Date

December 31, 2020: Applies to charities with Form T3010 due between March 18, 2020 and December 31, 2020

Usual Due Date

Six months after year end

Payroll Remittance

No Changes

HST

No changes, but CRA, through administrative position, confirmed they will not impose penalties where a return is filed by June 30, 2020

Payment Due Dates

(all have passed)

Individuals

New Due Date

September 1, 2020

Usual Due Date

April 30, 2020

Self-Employed

New Due Date

September 1, 2020

Usual Due Date

June 15, 2020

Corporations

New Due Date

September 1, 2020: Applies to balances and installments due between March 18 and September 1, 2020

Usual Due Date

2 months after year end, 3 months if active income

Payroll Remittance

No Changes

HST

New Due Date

Pushed to June 30, 2020

Usual Due Date

Depends if quarterly, annually etc.

Income tax filing and payment dates

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