Over the past week, the Federal and Provincial governments have introduced new economic measures to support Canadians in response to COVID-19. As well, other measures previously announced were enhanced in order to get money in the hands of Canadians as quickly as possible.
We are continuing to provide you with key updates that may impact you, your business and your employees
FEDERAL Government Support
Canada Emergency Response Benefit (CERB)
In an effort to simplify the application process, the Federal Government combined the two previously announced Emergency Care Benefit and Emergency Support Benefit programs into one program called the Canada Emergency Response Benefit (CERB). A taxable benefit of $2,000 per month for up to four months will be available for workers:
- who must stop work due to COVID-19 and do not have access to paid leave;
- who are sick, quarantined or taking care of someone who is sick with COVID-19
- staying at home without pay to take care of children that are sick or require additional care due to school/daycare closures
- employed but not working because of a shortage of work;
- self employed but do not qualify for Employment Insurance (EI)
To be eligible, individuals must have earned employment or self employment income of at least $5,000 in 2019 or the 12 month period before applying for CERB. The applicant must be at least 15 years of age
An online portal to apply for the benefit will be available by April 6, 2020 with initial payments expected to be issued within 10 days of the date of application. CERB payments will be paid every four weeks and will be available to cover the period from March 15, 2020 to October 3, 2020. There is no 1 week waiting period and applicants will have to swear an attestation that they are not working.
Other key elements of CERB are:
- individuals receiving CERB cannot have another source of income
- those individuals that have applied for EI and the application is not processed will have their application transferred to CERB
- Canadians eligible for EI and sickness benefits who are still unemployed after the 4 month period covered by CERB can access those EI and sickness benefits
The Federal Government is still working on resolving some of the remaining questions and complexities of CERB. We will update you as details become available.
Wage Subsidy for Canadian Businesses
The Federal Government announced the wage subsidy available to businesses will be increased from 10% to 75%. In order to access the subsidy, businesses must demonstrate that revenues have decreased by 30% resulting from COVID-19.
Initially, as provided in a previous email to you, employers could access the subsidy by reducing the remittances paid to CRA of income tax withheld on the employee remuneration paid during that time. The new program has not been communicated yet, but it is unlikely it will follow the same guidance as the 10% program given the dollar values. We can assist you in calculating the wage subsidy for your business, or we encourage you to contact your payroll supplier, most of which are on top of this for their clients. Eligible companies must be active businesses and not holding companies or investment companies
The Federal Government has not released any details regarding the maximum subsidies available for each employee and employer or how employers will prove a 30% revenue decrease. It is expected that Finance Minister Morneau will provide further guidance in the coming days.
Work Sharing Program
The work sharing program is a three-way agreement that can be negotiated between Service Canada, the employer and the employee to provide EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers. Changes to the program are:
- Extension of the maximum duration from 38 weeks to 76 weeks.
- The 30 day wait period will be waived for only those who have used the work-sharing program in the past.
- Businesses can now see their application being accepted within 10 days instead of 30.
- This would assist companies that may want to hire staff back after layoffs, but not impact on the EI program staff are already enrolled in.
Additional Business Financing
The Federal government announced a $25 billion program to provide interest free loans of up to $40,000 to small businesses and not for profits. The Business Development Bank of Canada will commit $20 billion to a co-lending program in partnership with financial institutions to small and medium enterprises.
Additional Tax Measures – Filing and Payment Deferrals
In addition to extending the personal tax filing deadline to June 1, 2020 for most individual taxpayers and deferring tax payments owing and tax instalments due to September 1, 2020 as outlined in a previous email, the Federal Government has announced the following tax measures:
- For trusts having a taxation year ending of December 31, 2019, the tax return deadline is extended to May 1, 2020 with tax payments deferred to September 1, 2020 without interest or penalty
- For corporate tax returns due after March 18, 2020 and before June 1, 2020, the tax filing deadline is extended to June 1, 2020
- Corporate tax payments (including tax instalments) that become owing after March 18, 2020 and before September 1, 2020 may be deferred to September 1, 2020 without interest or penalty
- Defer GST/HST remittances to June 30, 2020. For monthly filers, this applies to the February, March and April 2020 filing periods, for quarterly filers, the January to March periods. For annual filers, this applies to remittances due in March, April or May, 2020
Provincial Relief Measures
Rent Deferral Program – Nova Scotia
On Friday, the Premier of Nova Scotia announced a rent deferral program for commercial leases in Nova Scotia. The guidelines for the Rent Deferral Support Program (RDSP) is provided in the link below.
It is important to note:
- Only certain types of businesses are eligible for the program – a list of eligible businesses are listed in the link below
- Rent deferral agreements are to be agreed to on or before April 1, 2020. The deferral agreement must be dated April 1st or earlier and registered with the Province by April 3rd.
- Maximum guaranteed amount per tenant is $5,000 per month (for each of April, May and June). The maximum per landlord of $50,000.
The Province will be providing additional information regarding the application process in the near future.
Rent deferral guidelines can be found here.
It is expected that most municipalities will defer the payment of property taxes that would otherwise be owed during the COVID 19 crisis. While nothing has been released yet by HRM or other large municipalities, we recommend to not prepay the taxes that are otherwise due April 30, 2020 in anticipation of this announcement.
As always, we encourage you to contact either of us directly to discuss how the above measures may apply to or impact you and your business.
For the health and safety of our team, we have asked them to continue to work remotely from home for an indefinite period of time. While we may not be in the office, we are always available to you by phone or email to assist you in navigating through these uncertain times.
The office is open for drop-offs between 9 and 1 PM each day if you are not able to send documents electronically.
Provided here is a link to the Government of Canada website that provides some additional details of the various programs.