Our COVID19 Response. Click here for more information.

The Canadian Federation of Independent Businesses and the Royal Bank both issued very comprehensive documentation on these measures.   We have expanded upon those with our comments.

 

Businesses

75% Emergency Wage Subsidy

Click Here to download a Calculation Tool

The federal government will provide a 75% wage subsidy to eligible small businesses for salaries paid between March 15 and June 6 for businesses that experienced a 15% reduction of revenue from third parties in March and/or a 30% reduction in  April or May.

The majority of our clients have granted us access to CRA’s “Rep a Client” program which allows us to apply for the subsidy on their behalf.  If you would like us to help you with to calculate and apply for this subsidy, our staff would be pleased to assist you.

Additionally, we have prepared spreadsheets to aid you in your calculation.

More details from the government are available here.

  • Businesses (regardless of the number of employees)
  • Individual employers
  • Partnerships
  • Not for profit organizations
  • Charities
You must choose one of these baseline revenue options for your method of comparison and will not be able to change it for your subsequent calculations for the other 2 periods.

Eligibility periods for the Canada Emergency Wage Subsidy
Period dates Baseline revenue Eligibility period revenue Required reduction
March 15, 2020 to April 11, 2020
  • March 2019, or
  • Average of January and February 2020
March 2020 15%
April 12, 2020 to May 9, 2020
  • April 2019, or
  • Average of January and February 2020
April 2020 30%
May 10, 2020 to June 6, 2020
  • May 2019, or
  • Average of January and February 2020
May 2020 30%
For employees hired before March 15, the subsidy will cover the lesser of:
  • 75% of the pre-crisis weekly remuneration paid (up to $847 per week); or
  • Current weekly remuneration paid (up to $847 per week).
For new employees (hired after March 15), it will cover 75% of the current remuneration paid (up to $847 per week).

For example,
  • If you have one employee hired in January with a pre-crisis weekly pay of $1000 and that this employee has now a weekly pay of $800, you will receive a subsidy of $750.
  • If you have one employee hired in January with a pre-crisis weekly pay of $1000 and that this employee has now a weekly pay of $500, you will receive a subsidy of $500.
  • If you hire a new employee in April, with a weekly pay of $500, you will receive $375.
Do I have to pay the remaining 25%?

All employers would be expected to at least make best efforts to top up salaries to 100%.
The majority of our clients have granted us access to CRA’s “Rep a Client” program which allows us to apply for the subsidy on their behalf. If you would like us to help you with to calculate and apply for this subsidy, our staff would be pleased to assist you. There is a CRA online Calculator HERE You can calculate and apply on your own via CRA’s My Business Account service using either the CRA website above, or our provided calculation tool. Contact our staff for more information if needed.
You will be able to use the 10% wage subsidy (see details below). Using the 10% wage subsidy will reduce the amount you will be able to receive from the 75% wage subsidy.
Your employees cannot receive CERB if they receive employment income.
You will still receive the subsidy for the remunerations paid after March 15 (if you are eligible).

For example, If you are eligible for the claiming period going from March 15 to April 11 but you had to lay off you employees on March 31, you will receive the subsidy for remunerations paid between March 15 and March 31. Your laid off employees will remain eligible to receive CERB.

10% Wage Subsidy

Click Here to download a Calculation Tool

  • Canadian-Controlled Private Corporation (incorporated) eligible to the small business deduction or non-profit organizations, registered charities; and
  • Have an existing business number & payroll program account with CRA on March 18; and
  • Pay salary, wages, bonuses, or other remunerations to an employee.
For salaries paid between March 18 to June 20, 2020
It is a 10% subsidy, so if you have 2 employees that you pay $1,500 each, every two weeks, the subsidy will be $150 * 2 = $300.

Click Here to download a Calculation Tool
Over the 90 days period, the limit is $1,375 per employee and $25,000 per employer
You can reduce your remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy. You will be able to keep a portion of your employees’ income tax instead of giving it all to CRA

For example, if you have 2 employees for a total bimonthly labour cost of $3,000 and you deduct $700 from their pay for the federal and provincial income tax, you will be able to remit to CRA only $400 and keep the remaining $300 for you as you have a subsidy of $300 (as calculated above)

The calculation is the following: Planed income Tax remittance – 10% subsidy = New Income Tax remittance
You cannot however reduce your remittance of Canada Pension Plan contributions (CPP) or Employment Insurance (EI) premiums.
In the first remittance period that includes remuneration paid between March 18, 2020, and June 20, 2020

For more details, see the Frequently Asked Questions from CRA

$40,000 Canada Emergency Business Account

The Government of Canada recently announced that it will be providing the Canada Emergency Business Account to support Canadian businesses that have been adversely affected by COVID19. Eligible businesses will receive a $40,000 line of credit loan for immediate financial support to cover short term operating expenses, payroll and other business expenses which are critical to enable business continuity.

Banks will provide interest-free loans (for the first year) of up to $40,000 to employers with $20,000 to $1.5 million in total payroll in 2019.

  • Until December 31, 2020, the Canada Emergency Business Account will be funded as a revolving line of credit for $40,000.
  • After December 31, 2020, any outstanding balance on the revolving $40,000 line of credit will be converted into a non-revolving 5-year term loan maturing on December 31, 2025, at which time the balance must be paid in full.
  • No interest applies until January 1, 2023.
  • If you pay 75% of the balance of the term loan (as at January 1, 2021), on or before December 31, 2022, the remaining balance of your term loan will be forgiven. For example, if your balance is $40,000 on January 1, 2021 and you repay $30,000 on or before December 31, 2022, the remaining $10,000 will be forgiven.
  • If you do not repay 75% of the balance of the term loan (as at January 1, 2021) on or before December 31, 2022, the full loan balance and all accrued and unpaid interest will be due and payable on December 31, 2025. RBC has indicated a rate of 5% per annum effective January 1, 2023. It’s expected that the other banks will be similar.
  • The business has been a registered and operational business on or before March 1, 2020.

Commercial Rent Subsidy

The Prime Minister announced today a program targeted at assisting commercial renters.  This program will fund 75% of the rent on a partially forgivable loan basis.  Impacted small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.   At this point we have no further information to analyze in terms of execution and qualifying criteria.   We consider this program to be likely to be revised as they get closer to launch, with it not being open until at least mid-may due to the coordination required between mortgage lenders, provincial and federal governments.  We will update closer to launch when criteria are final.

  • The program will provide forgivable loans to qualifying commercial property owners to cover 50 per cent of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.
  • The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75 per cent for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25 per cent of the rent.
  • Under a rent forgiveness agreement, which includes a moratorium on eviction, the mortgaged commercial property owner would reduce the small business tenant’s monthly rent by at least 75 per cent. The tenant would be responsible for covering 25 per cent, the property owner 25 per cent, while the federal government and provinces would share the remaining 50 per cent. The forgivable loans would be disbursed directly to the mortgage lender.

Individuals

Canada Emergency Response Benefit

This will replace the emergency care benefit and the emergency support benefit previously announced. All Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not, will be able to receive the CERB.

A flat rate of $2,000 a month for up to four months. The benefit is taxable but no tax will be taken directly from the cheque, instead it will be payable next year.
The CERB will cover workers residing in Canada who:
  • Have lost their job
  • Are sick, quarantined, or taking care of someone who is sick with COVID-19
  • Are working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures
  • Are still employed, but are not receiving any income because of disruptions to their work situation due to COVID-19
and:
  • Had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
  • 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
  • Resident wage earners even if you were earning outside of Canada.
  • Contract workers
  • Self-employed individuals who would not otherwise be eligible for Employment Insurance (EI). This includes sole-proprietors.
  • Employment income
  • Self Employment income
  • Non-eligible dividends from a Canadian Controlled Private Corporation
No, Canadians cannot receive EI regular and sickness benefits and CERB in the same time but:
  • Those who are already receiving EI regular benefits will continue to receive the same benefits until the end of their benefit period. If these benefits end before October 3, 2020, they may then apply for the CERB if they meet the eligibility requirements.
  • EI claims of those who became eligible for EI regular or sickness benefits March 15th onward will be automatically processed through the CERB. After 4 months of receiving CERB, they will still be able to apply for their regular EI benefits if they are still unemployed. Receiving CERB first will not affect their eligibility to receive EI benefits after.
Yes. For example, you can receive the BC Emergency Benefit from the provincial government and CERB from the federal government.
There are two ways to apply:
  • Online with CRA My Account
    • Sign into your personal My Account then:
    • Go to COVID-19: Canada Emergency Response Benefit in the alert banner at the top of the page
    • Select the period you want to apply for
    • Declare that you qualify for the benefit
    • Confirm CRA has the right payment information
  • Over the phone with an automated phone service by calling the 1-800-959-2019
    • Select your language preference: English or French
    • Follow the prompts to enter your information, including:
      • Your SIN
      • Confirmation of your postal code
      • The period you are applying for
    • Declare that you qualify for the benefit
    You will have to re-apply every month.

    More details here. Note: Service Canada and the Canada Revenue Agency (CRA) deliver this benefit jointly so If you have already applied for Employment Insurance, you do not need to re-apply.
Canadians will be able to apply starting April 6 and will begin to receive their CERB payments within 10 days of application. The CERB will be paid every four weeks and be available until October 3, 2020.

To avoid issues with the CRA portal, the best day to apply will depends of your month of birth. If you were born in:
  • January, February and March, the best day is April 6
  • April, May and June, the best day is April 7
  • July, August and September, the best day is April 8
  • October, November and December, the best day is April 9
In order to receive your benefit faster, make sure that you have signed-up for direct deposit with CRA and that the information you provided is up to date.

More details here.
For people coming back onto payroll that may have inadvertently received CERB for a period they were employed and wish to return the benefit and prevent being taxed or fined, CRA now has a program in place to recover funds. Cheques can be made out to “Receiver General for Canada”. On the memo line please indicate it is for “Repayment of CERB” and include your Social Insurance Number (SIN) or your Temporary Tax Number (TTN). The Address is:

Revenue Processing – Repayment of CERB
Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 0C1
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