COVID-19 Response Plan - Federal Government - Support for Canadians
COVID-19 Response Plan - Federal Government - Support for Canadians
Synopsis
17 Minute Read
COVID-19 Response Plan Federal Government – Support for Canadians Last updated May 12, 2021, 4:00 pm MST
Insight
Performance
Insight
Support for Businesses
Canada Emergency Wage Subsidy (CEWS)
Eligibility
- Eligible entities include employers of all sizes and across all sectors of the economy, specifically:
- Individuals
- Taxable Corporations
- Trusts
- Partnerships (consisting of eligible entities)
- Non-profit organizations
- Registered charities
- 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 Organization
- Private colleges and schools, including institutions that offer specialized services, such as art schools, driving schools, language schools or flight schools
- Public sector entities are generally not eligible
- Eligible entities must experience a decline in revenues when compared to same month in 2019
- Eligible entity can elect to calculate revenues using accrual method or cash method; must use same method for all periods
- As an alternative to year-over-year approach, employers may compare revenue using an average of revenue earned in January and February 2020, provided on March 15, 2020 they had a business number registered with the Minister for purposes of payroll withholdings
- Affiliated groups may compute revenue on a consolidated basis
- Special rules provided for entities having 90% or more of their revenues from non-arm’s length parties
- Eligible employee is an individual employed in Canada by an eligible entity throughout the claim period
- For claim periods 1 to 4, employees with 14 or more consecutive unpaid days in the period were excluded; for claim periods 5 and later, those employees may be included in the calculation
- Employees laid off and rehired can meet the eligibility criteria can be included if they are rehired and paid before being included in the claim
- Whether an employee is active or on leave with pay is determined one week at a time in the subsidy calculator
Benefit
- The rate of the CEWS varies depending on the level of revenue decline, with no minimum reduction, for periods 5 and later; periods 1 to 4 required a decline in revenue greater than or equal to 30% (15% for March 2020)
- For periods 1 to 4, the subsidy rate is 75% of eligible employees’ remuneration, up to a maximum of $847/week per eligible employee
- For periods 5 to 10, the maximum subsidy rate is 65% (40% base rate + 25% top-up)
- For periods 11 to 16, the maximum subsidy rate is 75% (40% base + 35% top-up)
- Program includes 100% refund for certain employer-paid contributions to Employment Insurance, Canada Pension Plan, Quebec Pension Plan, and Quebec Parental Insurance Plan
- Refund available on employer-paid contributions for eligible employees for each week throughout which employees are on leave with pay, and for employees that employer is eligible to claim CEWS
Action Needed
- Applications opened for the CEWS beginning April 27, 2020
- Eligible entities apply through the CRA’s My Business Account
- Persons representing a business may apply using Represent a Client
- Alternatively, an online application form will be available
- Applicants need to calculate the estimated subsidy for their business prior to application
- Minister may make information, such as names of employers applying for the CEWS, available publicly
- Employers must attest to decline in revenue in order to be eligible for subsidy; significant penalties and interest will apply to fraudulent claims
- More details about the CEWS available:
Temporary Wage Subsidy for Employers (TWS)
Eligibility
- Limited to following employers:
- A CCPC entitled to a portion of the business limit for the small business deduction in its last taxation year ending prior to March 18, 2020
- An individual (other than a trust)
- A partnership, all members of which are: eligible CCPCs, individuals, partnerships or registered charities
- A non-profit organization exempt from tax
- A registered charity
- Eligible entities qualify provided they:
- Employ one or more individuals in Canada;
- 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.
Benefit
- Subsidy is determined by:
- A manual calculation equal to 10% of remuneration paid between March 18, 2020 and June 19, 2020
- Limited to a maximum subsidy amount of $1,375 per employee, to a maximum of $25,000 per employer
Action Needed
- Employers reduce their current remittance of federal, provincial, or territorial income tax that would otherwise be remitted to the Canada Revenue Agency (CRA) by the amount of subsidy calculated
- Entities eligible for both TWS and CEWS can elect the TWS to be less than 10%; any TWS claimed reduces amount of CEWS claimable
- More details about the TWS available:
Canada Emergency Business Account (CEBA)
Eligibility
- Limited to small businesses and not-for-profits who have temporarily reduced revenues due to COVID-19
- Two streams available: (i) Payroll Stream (applicants with employment income paid in 2019 between $20K and $1.5M); (ii) Non-Deferrable Expense Stream (applicants with $20K or less in total employment income paid in 2019)
- Every applicant must have:
- a business operating account at a participating financial institution at the time of application
- a CRA business number
- Applicants with payroll lower than $20,000 must have:
- filed a 2018 or 2019 tax return
- eligible non-deferrable expenses between $40,000 and $1.5 million
Benefit
- Interest-free loans up to $60,000
- 33% of loan (max. $20,000) eligible for forgiveness if balance repaid by December 31, 2022
- Original loan maximum was $40,000; applicants who received the initial loan are eligible to apply for the $20K expansion
- All applicants have until March 31, 2021, to apply for the $60K CEBA loan or the $20K expansion
Action Needed
- Application is through financial institutions
- More details about the CEBA available:
Large Employer Emergency Financing Facility (LEEFF)
Eligibility
- Large for-profit businesses (with the exception of financial sector), as well as certain not-for-profit businesses, with annual revenues of $300 M or higher
- Eligible businesses must have significant operations or workforce in Canada, and not be involved in active insolvency proceedings
Benefit
- Provides bridge financing of $60 M or more to eligible entities
Action Needed
- Businesses seeking support must demonstrate intention to preserve employment and maintain investment activities
- Recipient companies required to publish annual climate-related disclosure reports
- More information available:
Highly Affected Sectors Credit Availability Program (HASCAP)
Eligibility
- Small and medium-sized Canadian-based businesses that have seen their revenues decrease by 50% or more as a result of COVID-19
- Business must have been financially stable and viable prior to current economic situation
- Business must have received payments either from the CEWS or the CERS by having demonstrated a minimum 50% revenue decline for at least 3 months (not necessarily consecutive) within the 8-month period prior to date of HASCAP Guarantee application
- Loan must be used to continue or resume operations (not for repayment of existing financing)
Benefit
- The guarantee covers amounts ranging from $25,000 to $1 M
- Loans are low interest bearing with repayment terms up to 10 years
Action Needed
- Up to a 12-month postponement of principal payments at start of loan Government has mandated BDC to provide a guarantee to financial institutions for 100% of value of new term loan
- Application is through financial institution (can apply at one institution only)
- Applications open at some participating financial institutions beginning February 1, 2021; other participating institutions will deploy program progressively over days that follow
- More details and FAQ available here
Business Credit Availability Program (BCAP): Loan Guarantee for Small and Medium-Sized Enterprises (SME) - Export Development Canada (EDC)
Eligibility
- Small and medium-sized enterprises
- Applies to export sector and domestic companies
Benefit
- EDC is guaranteeing new operating lines of credit or new term loans to sustain operations in response to COVID-19
- Size of loan or line of credit is determined by financial institution
- Support available until June 2021
Action Needed
- Application is through financial institutions
- More details available:
Business Credit Availability Program (BCAP): Co-Lending Program for Small and Medium-Sized Enterprises - Business Development Bank of Canada (BDC)
Eligibility
- Small and medium-sized enterprises directly or indirectly impacted by COVID-19
- Business must have been financially stable and viable prior to pandemic
- Financing to be used solely to support operational cashflow requirements
- Subject to financial institution’s credit criteria
Benefit
- BDC is co-lending term loans to SMEs for operational cash flow requirements
- Incremental credit amounts of up to $6.25 M available through program
- Program expanded to mid-sized companies with larger financing needs (up to $60 M)
Action Needed
- Application is through financial institutions
- More details available:
Canada Emergency Commercial Rent Assistance (CECRA) for small businesses (closed – program has ended)
Eligibility
- Small business tenants paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70% drop in pre-COVID-19 revenues
- Non-profit and charitable organizations are also eligible
Benefit
- Forgivable loans to qualifying commercial property owners who agree to reduce eligible small business tenants’ rent by at least 75% for April, May and June 2020
- Agreement must include a term not to evict tenant
- Rent will be covered 50% by CECRA; 25% by property owner; and 25% by tenant
Action Needed
- Application portal opened May 25, 2020
- Significant information required from applicant
- Details on application process available:
Tax Filing and Payment Deadlines
Eligibility
- See here for details on extensions regarding tax filing and payment deadlines
Support for Individuals
Canada Emergency Response Benefit (CERB) (closed – program has ended)
Eligibility
- Available to workers who:
- Live in Canada, who are at least 15 years old;
- Stopped working because of COVID-19 and have not voluntarily quit their job;
- Had income of at least $5,000 in 2019 or in the 12 months prior to date of application; and,
- Did not earn more than $1,000 in employment or self-employment income for at least 14 consecutive days in the four-week period of first claim;
- Did not earn more than $1,000 in employment or self-employment income for the entire four-week period of each subsequent claim.
- CERB is also accessible to seasonal workers who have exhausted their regular EI benefits but unable to undertake usual seasonal work due to COVID-19 and to workers who have exhausted their regular EI benefits but are unable to find a job or return to work because of COVID-19
- Non-eligible dividends count towards minimum $5,000 income requirement for eligibility; non-eligible dividends also count toward $1000 income threshold for benefit period
Benefit
- Provides $500 per week for up to 28 weeks
Action Needed
- Applications accepted beginning April 6, 2020
- Online or telephone application process
- A person must make an application, if eligible, for every four-week period
- The application must be made no later than December 2, 2020
- Beginning July 5, 2020, applicants must sign attestation acknowledging the government wants them to work
- Guidelines established for days to apply based on birth month
Employment Insurance (EI) (sickness benefits)
Eligibility
- Employees who are:
- Sick,
- Shortage of work
- Seasonal or mass lay-offs
Benefit
- 55% of average insurable weekly earning, up to $573/week for up to 15 weeks
- Available beginning March 15, 2020
Action Needed
- Initial online application; then must call 1-833-381-2725 to waive one-week waiting period
- Medical certificate not required
Employment Insurance (EI) (regular benefits)
Eligibility
- Employees who lost jobs through no fault of their own (ex. due to shortage of work, seasonal or mass lay-offs) and are:
- Available and able to work
- Unable to find a job
Benefit
- 55% of average insurable weekly earning, up to $573/week for up to 14-45 weeks
- Available beginning immediately but must be without work and pay for 7 consecutive days to be eligible
Action Needed
- Apply online within four weeks of last day of work
- Must complete bi-weekly reports to prove continuing eligibility
- Claims starting March 15, 2020 will have benefits delivered as part of CERB; for details see:
Employment Insurance (EI) (temporary measures)
Eligibility
- Canada Recovery Benefit (CRB) for self-employed workers or those not eligible for EI and require income support
- Canada Recovery Sickness Benefit (CRSB) for workers who are sick or must self-isolate for reasons related to COVID-19
- Canada Recovery Caregiving Benefit (CRCB) for eligible Canadians unable to work because they must care for a child or family member for reasons related to COVID-19
Benefit
- CRB to provide $500 per week for up to 26 weeks
- CRSB to provide $500 per week for up to two weeks
- CRCB to provide $500 per week for up to 26 weeks
Action Needed
Canada Emergency Student Benefit (closed – program has ended)
Eligibility
- Post-secondary students currently in school, planning to start school in September 2020, or having graduated in December 2019, and have lost work or unable to find work due to COVID-19
- Students currently working but earning less than $1,000 per month are also eligible if hours have been cut due to COVID-19
Benefit
- $,1250 per month from May to August 2020
- Amount increases to $1,750 per month if student is caring for someone or has a disability
Action Needed
- The program closed for applications on September 30, 2020
Canada Student Service Grant (CSSG) (cancelled – program not implemented)
Eligibility
- Participants must be 30 years of age or younger, a Canadian citizen, permanent resident, or a student with refugee status, and either:
- Enrolled in and attending post-secondary education during the spring, summer, or fall 2020 semesters
- Recent post-secondary graduates (no earlier than December 2019); or
- Studying abroad and currently residing in Canada
- In order for a volunteer opportunity to be eligible, a placement must:
- Be with a not-for-profit organization, which includes registered charities
- Take place in Canada and support Canada’s response to COVID-19
- Be a minimum of 2 hours per week for four weeks
- Follow all applicable public health requirements
Benefit
- One-time payment available at five levels, ranging from $1,000 to $5,000
- Amount will vary based on number of volunteer hours ($1,000 for each 100 hours completed, up to a maximum of $5,000 for 500 hours)
Action Needed
- Post-secondary students and recent graduates must register no later than August 21, 2020, to be eligible for the grant
- Completed applications for the CSSG must be submitted no later than November 6, 2020
- Participants may only count hours accumulated from June 25 to October 31, 2020
Goods and Services Tax Credit (GSTC) - Special payment
Eligibility
- Individuals who:
- normally received GSTC and filed a 2018 personal income tax return (T1)
- previously not entitled to GSTC but now are based on family net income (and filed 2018 T1)
Benefit
- Maximum amounts for 2019-2020 benefit year will increase from:
- $443 to $886, if single
- $580 to $1,160, if married or common-law
- $154 to $306 for each child under age 19 (excluding first eligible child of single parent)
- $290 to $580 for first eligible child of single parent
Action Needed
- No application required but must file 2018 income tax return
- Payments will be issued April 9, 2020
- May be eligible for retroactive credit if late filing 2018 taxes
- More details on GSTC available:
Canada Child Benefit (CCB) - Special payment
Eligibility
- Eligible to those who are:
- Living with a child under 18 years of age
- Primary caregiver to that child
- Resident of Canada for tax purposes (as well as other criteria related to citizenship /residency status)
Benefit
- Eligible recipients will receive $300 more per child with regular May CCB payment
Action Needed
- If previously applied for CCB, do not need to reapply
- Otherwise, apply for CCB:
- Register the birth
- Online through My Account
- By mail
Old Age Security (OAS) and Guaranteed Income Supplement (GIS) - Special Payment
Eligibility
Seniors eligible for OAS and GIS
Benefit
- One-time tax-free payment of $300 for seniors eligible for OAS
- Additional $200 payment for seniors eligible for GIS
Action Needed
- No action required
Registered Retirement Income Funds (RRIFs) - Reduction to required withdrawal
Eligibility
- Taxpayers who have monies invested in RRIFs
Benefit
- Minimum required withdrawal is reduced by 25% for 2020 only
- Similar rules apply for individuals receiving variable benefit payments under a defined contribution registered pension plan
Action Needed
- No action required
Tax Filing and Payment Deadlines
Eligibility
- See here for details on extensions regarding income tax filing and payment deadlines
Insights
-
February 29, 2024
Is your Credit Union Prepared for the Future
Digitization and evolving membership preferences are dramatically changing the financial services space. In this first part of our whitepaper series, we focus on three.
-
Performance
February 29, 2024
Create a Long-term Practice Plan and Protect What You’ve Built
Explore the three areas where SMARTPro can help you plan for the future.
-
Progress
February 29, 2024
Purchasing a professional practice during a global pandemic
Tips for navigating the changing world of professional practices from our experienced advisors.
