The measures introduced to protect us all from COVID-19 have had a huge economic impact on individuals and businesses. The federal government has been rolling out – and changing – various relief measures over the past few weeks.
Today we will outline two new measures which will likely be helpful to many of the businesses and individuals impacted: the Canada Emergency Response Benefit and the Small Business 75% Wage Subsidy.
An Alternative to EI: The Canada Emergency Response Benefit
The Canada Emergency Response Benefit (CERB) was announced on March 25, 2020. It is an alternative form of loss of income benefit.
The CERB will provide $2,000 a month for up to four months (16 weeks) to workers who have somehow lost their incomes as a result of the COVID-19 pandemic.
Some differences between this benefit and EI:
- It will be the same amount for everyone – $500 a week
- It will last for a maximum of 16 weeks
- You don’t have to qualify for EI to get it, meaning…
- It will be available to the self-employed
- It will be available to contractors
Who qualifies? In order to qualify for this benefit, an individual will have to have lost their income because of COVID-19. A loss of income could result from being unable to work due to illness or caregiving responsibilities, or because contracts or work hours have been cancelled, and likely other reasons. Employees who are unable to work because their workplace has been closed, for example, will also be able to get this benefit.
We do not have details about this benefit yet, but the feds say that applications will be available in early April.
Payments will begin within 10 days of applying and can be retroactive to March 15, 2020.
Support for Small Businesses: Canada Emergency Wage Subsidy – 75%
On March 27, 2020, the federal government announced new supports for impacted small businesses, among them a new 75% wage subsidy. On March 30, 2020, PM Trudeau stated that employers should bring laid-off employees back, with the help of this subsidy, wherever possible.
Qualifying businesses will be able to access this benefit for up to 3 months. Eligibility criteria will be available before the end of the month – so presumably today or tomorrow. We expect that employers will need to demonstrate a significant dip in revenue due to COVID-19. The benefit will be retroactive to March 15, 2020.
Currently in place, is a 10% wage subsidy, up to a maximum subsidy of $1,375 per employee and $25,000 per eligible employer.
Eligible employers must be a non-profit organization, registered charity, or a Canadian-controlled private corporation AND 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.
Canadian-controlled private corporations are only eligible for the subsidy if their taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, is less than $15 million.
Businesses receive this subsidy by reducing their remittances of income tax withheld on their employees’ pay.
Check out additional supports for businesses here.
If you’d like to book a consultation to speak with us about your unique situation we are here to help! Get in touch.