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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 September 29, 2021, 4:00 pm MST

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 maximum subsidy rate is 75% of eligible employees’ remuneration, up to a maximum of $847/week per eligible employee
  • For periods 5 and 6, the maximum subsidy is lesser of 85% of baseline remuneration (base: 65% + top-up: 0-25%), and $960/week
  • For period 7, the maximum subsidy is lesser of 75% of baseline remuneration (base: 50% + top-up: 0-25%), and $847/week
  • For periods 8 to 10, the maximum subsidy is lesser of 65% of baseline remuneration (base: 40% + top-up: 0-25%), and $734/week
  • For periods 11 to 16, the maximum subsidy  is lesser of 75% of baseline remuneration (base: 40% + top-up: 0-35%), and $847/week
  • For period 18, the maximum subsidy is lesser of 60% of baseline remuneration (base: 35% + top-up: 0-25%), and $677/week
  • For period 19, the maximum subsidy is lesser of 40% of baseline remuneration (base: 25% + top-up: 0-15%), and $452/week
  • For period 20, the maximum subsidy is lesser of 30% (base: 25% + top-up: 15%) and $452/week
  • For period 21, the maximum subsidy is lesser of 20% (base: 10% + top-up: 10%) and $226/week
  • 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
  • Program extended to October 23, 2021
  • 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:

Canada Emergency Rent Subsidy

Eligibility

  • Canadian businesses, non-profit organizations or charities who have seen a drop in revenue during the COVID-19 pandemic may be eligible for a subsidy to cover part of their commercial rent or property expenses
  • Payments will be made directly to qualifying renters and property owners, without requiring participation of landlords
  •  Eligibility can be determined here

Benefit

  • The subsidy is available on a sliding scale (with a maximum of 65%) for businesses that can demonstrate a revenue loss from September 27, 2020 to June 5, 2021 (Periods 1 – 16)
  • Lockdown support: additional top-up of 25% (maximum possible subsidy of 90%) is available for businesses that temporarily shut down due to a mandatory public health order
  • While lockdown support of 25% remains in place, maximum base subsidy declines as follows:
    • Period 17 – 65%
    • Period 18 – 60%
    • Periods 19/20 – 40%
    •  Period 21 – 20%

Action Needed

  • Program extended to October 23, 2021
  • Application is available through the CRA’s MyBusiness Account and Represent a Client portals
  • Businesses need to apply to the rent subsidy after the month has passed
  • Deadline to apply is 180 days after the end of each claim period
  • Subsidy available is determined using the CERS calculator

Canada Recovery Hiring Program (CRHP)

Eligibility

  • Eligible employers include Canadian-controlled private corporations, individuals, non-profit organizations, registered charities and certain partnerships
  •  Employers qualify for the program if they have a drop in revenue (computed the same way as it is for the CEWS)

Benefit

  • Support only available for active employees and will be available from June 6 to November 20, 2021
  • Subsidy is equal to the incremental remuneration multiplied by an applicable hiring subsidy rate for a qualifying period
  • Eligible remuneration for each employee is subject to a maximum of $1,129 per week
  • Certain restrictions exist for non-arm’s length employees
  •  Eligible employers can claim either the CRHP or the CEWS for a particular period, but not both 

Action Needed

  • Eligible employers, or their payroll service provider, needed to have a CRA payroll account number on March 15, 2020
  • For more information on the CRHP, see MNP Insight

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

Action Needed

  • Business owners can apply for support until June 30, 2021
  • Application is through financial institutions
  • More details about the CEBA available:

Enhanced Work-Sharing Program

Eligibility

  • To be eligible for a WS agreement, businesses must be a year-round business in Canada for at least 1 year, be a private business or publicly held company, or have at least 2 employees in the WS unit
  •  Eligibility also extended to Government Business Enterprises and not-for-profit employers experiencing a shortage of work due to COVID-19 

Benefit

  • Effective March 15, 2020 and extended to September 26. 2021, temporary special measures including extension of maximum possible duration of agreement from 38 to 76 weeks

Action Needed

  • Employers must submit completed applications a minimum of 10 business days prior to requested start date
  • More information, including links for applications, can be found here

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): Mid-Market Guarantee and Financing Program - Export Development Canada (EDC)

Eligibility

  • Companies who tend to have revenues of between $50 million to $300 million
  • Guarantees available to exporters, international investors and businesses that sell products or services within Canada

Benefit

  • EDC will work with Canadian financial institutions to guarantee 75% of new operating credit and cash-flow loans – ranging in size from $16.75 million to a maximum of $80 million

Action Needed


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


Business Credit Availability Program (BCAP): Mid-Market Financing Program – Business Development Bank of Canada (BDC)

Eligibility

  • Medium-sized businesses whose credit needs exceed what is already available through the BCAP and other measures
  • Qualified companies anticipated to have annual revenues in excess of approximately $100 million

Benefit

  • BDC offers junior loans ranging between $12.5 million and $60 million

Action Needed


Regional Relief and Recovery Fund (RRRF)

Eligibility

  • Provides assistance to businesses and communities that require additional support to cope with and recover from the pandemic

Benefit

  • RRRF mirrors the support offered by other federal programs such as the CEBA or the BCAP
  • Businesses already receiving support from the RRRF may be eligible to receive up to $20,000 in additional funding

Action Needed

  • To review RRRF eligibility requirements and to apply for support, contact your local regional development agency (see listing here)

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 Young Child Supplement (CCBYSC)

Eligibility

  • Eligible to those who are:
    • Living with a child under 6 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 per child if family net income is $120,000 or less, or $150 per child if family net income is more than $120,000
  • CRA will make CCBYCS payments on following dates:
    • May 28, 2021 (includes amounts for January and April)
    • July 30, 2021
    • October 29, 2021
  • Payments are issued separately from the CCB payments already receiving

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
  • Parent must file 2019 and 2020 income tax returns to receive benefits
  • More information available here

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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