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New & Updated Federal COVID-19 Relief Initiatives

April 24, 2020

Canada Emergency Response Benefit:

In response to feedback to the original Canada Emergency Response Benefit (CERB) eligibility requirements needing to be expanded to meet the needs of more individuals, the Federal Government recently announced updates to the rules that will include:

  • allow people to earn up to $1,000 per month while collecting the CERB; 
  • extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their usual seasonal work as a result of the COVID-19 outbreak; and 
  • extend the CERB to workers who recently exhausted their EI regular benefits and are unable to find a job or return to work because of COVID-19.

These changes will be retroactive to March 15, 2020, and more details will be provided soon. 

Increased Wages for Essential Workers:

The Federal Government also announced a wage increase for low-income essential workers. The government plans to work with the provinces and territories to cost-share a salary top-up for low-income essential workers via a federal transfer payment. Under this new transfer, the provinces and territories can provide a top-up to essential workers who earn less than $2,500 per month. Further details will be provided soon. 

Applications for Canada Emergency Wage Subsidy (CEWS) Open:

Beginning April 27, applications will be open for the Canada Emergency Wage Subsidy.

How to apply

  • Most businesses may apply using My Business Account
  • If you represent a business, you may apply using Represent a Client
  • Alternatively, you may apply using a separate online application form (available April 27)

The CEWS will be processed at the payroll program (RP) account level, so you will have to file a separate application for each RP account.

What is an eligible revenue reduction?

You must determine if your reduced revenue makes you eligible to apply for the wage subsidy in a particular period.

If you determine that you qualify for the CEWS for one claim period, you will automatically qualify for the following claim period.

Commercial Rent Relief for Small Businesses:

Prime Minister Trudeau has announced that small businesses with monthly rents of less than $50,000 will be eligible for a 75% reduction for April, May and June. 50% will be covered by the federal government. The remaining 25% will be covered by the lessor. Non-profits and charities will also be eligible. The program will provide forgivable loans to qualifying commercial property owners to cover 50 percent of three-monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June. The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75 percent for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25 percent of the rent. Impacted small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 percent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.

Canada Emergency Student Benefit (CESB) Announced April 22, 2020:

The new benefit aims to provide financial support to Canadian post-secondary students and young people who are negatively impacted by the coronavirus pandemic. The CESB is meant to aid students not covered by the other COVID-19 Government measures.

The following information is based on early media reports about the CESB, the Government is hoping to have legislation on the CESB soon.

Who is eligible for the Canada Emergency Student Benefit program?

Post-secondary (college and university) students who are currently in school, are planning to start school in September 2020, or who graduated from a school in December 2019 are eligible for the CESB if they have lost work or cannot find work due to the pandemic.

Working students that are earning less than $1,000 per month are also able to apply for the benefit if their hours have been cut due to COVID-19.

How much will the Canada Emergency Student Benefit provide?

Post-secondary students who qualify for the CESB will receive $1,250 a month from May to August 2020.  The amount will increase to $1,750 per month if you are caring for somebody, or if you have a disability.  Registration and payments will be handled by the Canada Revenue Agency.

When can I apply for the CESB?

The Federal Government still needs to pass legislation in order to activate the CESB program. They are currently working on quickly bringing a bill forward to make the funds available as soon as possible.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.

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