credit union building

Credit Unions and the Federal Temporary Wage Subsidy

March 27, 2020

Credit Unions and the Federal Temporary Wage Subsidy

Synopsis
2 Minute Read

Find out if your credit union is eligible as an employee to claim the Temporary Wage Subsidy.

Credit unions with taxable capital under $15 million may be eligible for the federal government’s Temporary Wage Subsidy, a financial incentive to help Canadians during the COVID-19 crisis.

On March 25, 2020, the federal government enacted Bill C-13 which clarified the definition of “eligible employer” for purposes of the previously announced Temporary Wage Subsidy. To be eligible for the Temporary Wage Subsidy, a credit union must meet the definition of an eligible employer.

The definition references Canadian Controlled Private Corporations (CCPCs) for the purposes of Section 125 of the Income Tax Act. While credit unions are generally not deemed to be a private corporation under the Income Tax Act, they are under certain purposes, including the above-mentioned Section 125. To meet the definition, a credit union must also have had a small business limit for their last taxation year (excluding the passive investment income grind). Therefore, any credit unions who had taxable capital in excess of $15 million in the prior year will not be considered an “eligible employer” and will not be eligible to claim the subsidy.

However, any credit union who had a small business limit in the prior year should be eligible for the Temporary Wage Subsidy. 

It appears though at this point if a credit union has taxable capital less than $15 million but is not getting a small business limit due to its preferred rate amount, it would be excluded and not considered an eligible employer for purposes of the Temporary Wage Subsidy.

For more information on the Temporary Wage Subsidy and your credit union’s eligibility, please contact your local MNP Credit Union Advisor or Matt Bolley at [email protected]

Learn more at MNP's COVID-19 Business Advice Centre

Strategies and tools to help your company navigate the coronavirus crisis, stay resilient and take the next steps towards recovery.

Learn more

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