COVID Government Assistance Update
Update April 12, 2020
Canada Emergency Response Benefit (CERB)
- $2,000/month per person effective March 15, 2020
- Application is now available. Apply via https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html
- Apply on the appropriate day as determined by your birth month in the chart below.
The month you were born Apply for CERB on.
- January, February or March Mondays
- April, May, or June Tuesdays
- July, August, or September Wednesdays
- October, November, December Thursdays
- Any month Fridays, Saturdays & Sundays
- This is taxable however no tax is being withheld. Tax owing, if applicable, will not be due until April 30, 2021
- Criteria to apply for this benefit:
- Over 14 years of age
- Had income from employment, self employment, or dividends of at least $5,000 in 2019 or in the 12 months prior to the date of your application.
- NEW – dividend income is now acceptable to qualify for this benefit
- Cannot work due to COVID related changes in employment
- Must re-apply every 4 weeks
- NEW – many people are receiving multiple payments of this benefit. If multiple payments for this are received, do not contact the government. This overpayment must be repaid. To do this you can just send a cheque for the overpayment to the CRA with your social insurance number on it and a note that says CERB repayment.
10% Payroll Support
- All employers, regardless of how their business is performing, will receive a 10% payroll subsidy
- Employers are asked to reduce the tax portion of their payroll remittance by the amount of the subsidy.
- Employers must still remit the full EI and CPP on the payroll for the period
- If an employer qualifies for both the 10% and the 75% subsidy, the 10% payment will be deducted from the 75% subsidy to ensure no business receives more than 75% subsidy total
- Taking the 10% subsidy now can help to ease cash flow while the government prepares for the 75% subsidy to become effective
- More info: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html
75% Payroll Support
- Effective for pay periods starting March 15, 2020 the government will subsidize 75% of payroll to a maximum subsidy of $847 per week per employee
- In effect, the government is paying 75% of payroll for employees that earn up to $58,700
- Businesses are not required to pay the extra 25% of total payroll but it is recommended.
- NEW – businesses need only show a revenue reduction of 15% for March to qualify for this benefit
- Businesses must have a decline in revenues of at least 30% in April or May to qualify for that month’s payroll subsidy
- NEW: If your business qualifies for the subsidy for one 4 week period, it will automatically receive the subsidy for the following 4 week period whether it continues to have the necessary revenue reduction or not.
- Businesses that do not have a 30% decline in revenues will receive the 10% payroll subsidy
- No application is currently available but will become available on the CRA website.
- Government is hoping this will cause employers to re-hire employees
- NEW - If employees are still being paid but are not working, the government will pay 100% of the employer’s portion of the CPP & EI remittance for that employee for the period.
- More info: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html
Canada Emergency Business Account
- Up to $40,000 in a loan
- Businesses must have at least $50,000 and not more than $1M in payroll in 2019 to qualify
- NEW - Interest Free until December 31, 2022
- Up to $10,000 is forgivable if 75% of the balance outstanding is paid by December 31, 2022
- If the loan is not repaid by December 31, 2022, it converts to a 5 year term loan at 5% interest.
- Applications are available through your business bank
- Loan proceeds cannot be used for investing or shareholder draws and must be used to cover non-deferrable overhead and business expenses.
GST/HST & Import Duty Payment Deferral
- GST/HST & Import Duty payments that were due in March, April or May are now due on June 30, 2020.
Personal and Corporate Tax Deferral
- Personal tax filing deadline is extended June 1, 2020
- Personal and Corporate tax that would otherwise be due after March 15th is not due until September 1, 2020.