Covid 19 Stimulus Programs
With the new measures being announced by the government, there are many questions about how these measures can help you personally and your business in this trying time.
As more details are announced, we will continue to summarize the main points and update this page for your reference, as well as share the summarized updates to our Facebook page. If you have any questions or need help in how these measures might help you or your business, please don't hesitate to email or call us:
The newest details as of April 16, 2020 have been highlighted for easy reference.
CERB - CANADA ECONOMIC RESPONSE BENEFIT
The Federal government has combined their previous ideas on additional EI benefits into one benefit available to all wage earners and self-employed people including those who would not otherwise qualify for Employment Insurance:
- The benefit is $2,000 per month for anyone that earned at least $5,000 in the past year.
- Payments of the benefit should be processed within 3-10 days of application and paid every 4 weeks.
- Applications opened starting April 6 depending on which month you were born. You can apply via your MyCRA account online or through an automated telephone services 1-800-959-2019.
The benefit will be available to workers:
- Residing in Canada, who are at least 15 years old;
- Who have stopped working because of COVID-19
- Who had income of at least $5,000* in 2019 or in the 12 months prior to the date of their application
- Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. Once receiving the CERB they are allowed to earn up to $1,000 per month before losing this benefit. The details on this new rule are scant but will be fleshed out soon.
*The income of at least $5,000 may be from any or a combination of the following sources: employment; self-employment; maternity and parental benefits under the Employment Insurance program. The amount of $5,000 includes net self-employed income and foreign earnings as long as still a Canadian Resident.
The Benefit is only available to individuals who stopped work as a result of reasons related to COVID-19. If you are looking for a job but haven’t stopped working because of COVID-19, you are not eligible for the Benefit.
GST TAX CREDIT:
One extra GST payment in early May 2020 = the amount normally received in a year, doubling the amount of GST amounts received for the 2019-20 benefit year.
CANADA CHILD BENEFIT:
They will pay an additional $300 per child as part of the regular May payment.
PERSONAL TAX FILING & PAYMENT DEADLINES:
Personal tax – June 1, 2020
Trust returns – May 1, 2020
Income tax payments due August 31, 2020
1. CEWS - The 75% wage subsidy
- All employers except those in the public sector (government funded) are eligible. The 75% is based on the wages actually paid to employees.
- This applies on a month by month basis for March, April and May.
- The criteria for March will be adjusted to a revenue reduction of only 15% in March 2020 over March 2019.
- How it works - If your revenues for March 2020 were 15% less than March 2019 you qualify for the subsidy for payroll paid March 15th – April 11th. For April and May your revenues will have to drop by 30% compared to the same month in 2019 unless using the alternate method below.
- For all employers there will be an option to compare revenues in each month to the average of January and February 2020. The employer must choose one method for all 3 months.
- For all employers there will be an option to use the cash basis to calculate drops in revenue. Similar to above the employer must choose one method to use for all 3 months.
- The maximum subsidy is $847 per employee per week for up to 12 weeks from March 15 - June 6, 2020.
- The amount paid by government is the greater of:
o 75% of the employee's pre-crisis weekly remuneration or 75% OR
o 75% of the amount paid to the employee for each week
- This subsidy would then be included as income to the employer company, so income tax will be paid on it in future.
Wage Subsidy flow-through – essentially using employers to provide EI
- For companies who have laid off staff and are unable to rehire them even with the 75% subsidy, the government would like them to act as a flow-through to rehire the employee and pay them 75% of pre-crisis wages to be reimbursed by the government. The employer would then also be refunded any employer payroll taxes on these wages. This would only apply to employees who are not doing any work for the employer for the entirety of the week for which wages are paid.
- The benefit to employers is that their staff get 75% of their pre-crisis wages and do not need to go on EI which would only pay 55% of pre-crisis wages. This would help with staff retention and help put more money into the pockets of their employees. However; details are still sketchy and it may well be that the employer would have to front the cash so to speak and then depend on the government to repay them in good time.
- Employers would still need to remit payroll taxes which would later be refunded by the government.
2. Small Business Loans
- A new program has been launched to provide interest free loans of up to $40,000 for businesses with 2019 payroll between $10,000 and $1,500,000.
- If your business is able to repay the loan by December 31, 2022 they will forgive 25% of the loan. For example; if you are able to pay back $30,000 of the $40,000 loan you will not have to repay the remaining $10,000.
- Certain banks (ex. CIBC) are opening up online applications tomorrow April 9th so get in your applications early!
3. The 10% wage subsidy program
- This subsidy can be applied against wage remittances made for March 18th until June 19th.
- If you use this subsidy it is deducted from the amount of the 75% wage subsidy receivable.
- The subsidy only reduces the amount of income tax remittances not EI or CPP.
- The subsidy is 10% of the gross wages paid up to $1,375 per employee up to $25,000 per employer.
4. All businesses can defer all income tax payments and installments until August 31, 2020 (not including GST/PST/payroll). No interest or penalties will accrue during this period.
5. GST deadlines and payments that were previously due March, April or May have been deferred until June 30, 2020.
6. Summer Students Program - The government will now be covering 100% of wages paid to students in the Summer Job Program for small businesses hiring students. The program will also be extended into the winter months.
Please feel free to share this with those it could help.
To read the full response plan, please see link for source: