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
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