Pandemic relief programs for businesses and individuals:
PROGRAMS FOR BUSINESSES
This is one of Canada’s most widely used relief programs, with almost 1.7 million claims to date worth over $50 billion. The goal of CEWS is to provide employers an incentive to keep staff on payroll, avoid layoffs, and even encourage further hiring. This is done through a subsidy of up to 85% of gross wages paid.
CEWS is a revenue tested subsidy, meaning that employers with larger declines in sales are eligible for more subsidization. There are 3 ways to determine the decline in sales:
- Compare sales for the period with the same period last year
- Compare sales for the previous period with the same period last year
- Compare sales of the period with the average sales in January and February 2020
After calculating decline in sales, employers can determine what percentage of payroll costs are eligible for subsidy.
- For periods 1 – 4 (March 15 through July 4), employers whose revenue has decreased a minimum of 30% (or just 15% in period 1) can qualify for a subsidy of 75% of remuneration paid up to $847 per employee per week
- If you have employees that had higher earnings prior to the pandemic, you can claim the entire amount paid for the period, up to a maximum of $847 per week OR 75% of the employee’s pre-crisis weekly remuneration, whichever less
- For periods 5 – 10 (July 5 through December 19), employers with any drop in revenue can apply for a subsidy, though the calculation is far more complex! The maximum subsidy declines through these periods as follows:
- Periods 5 and 6: Subsidy up to 85%, max of $960 per week per employee
- Period 7: Subsidy up to 75%, max of $847 per week per employee
- Periods 8 – 10 : Subsidy up to 65%, max of $734 per week per employee
- For periods after December 19, these rates were not yet released at the time of writing.
Applications for CEWS run in 4 week periods, starting with March 15th to April 11th, and running through to June 2021. Apply online through CRA’s “My Business Account” portal.
- At the time we are writing this, there is still time for employers to apply for all subsidy periods! You have until January 31st, 2021 to make a backdated claim for all periods between April 11th and August 1st. After that, claims will be due 180 days after the end of each period.
Don’t forget! All employers who apply for CEWS in periods 1 through 4 must also file form PD27 to declare additional amounts claimed under the Temporary Wage Subsidy (TWS, see below), even if no TWS was or will be claimed
A sliding-scale subsidy designed to help both renters AND property owners cover various property costs. Businesses, non-profits, and charities that see any loss of gross revenue due to the pandemic are eligible, though those more impacted will see more of their expenses eligible for subsidy. Highlights include:
- Costs eligible for subsidy include base rent (less GST) plus most amounts required under a lease agreement
- Up to $75,000 of costs can be claimed per period, per property
- Eligible costs include mortgage interest, property taxes and insurance
Up to $75,000 of costs can be claimed per period, per property
Subsidy rates for both renters and owners
- Drop in revenue of 70% or more: subsidy of 65%
- Drop between 50% and 70%: revenue drop less 10% x 1.25 (subsidy of 40% to 65%)
- Drop less than 50%: revenue drop x 80% (subsidy of 0% to 40%)
An additional 25% subsidy is available for businesses subject to an industry-wide closure by a public health authority.
This subsidy is applied for online every 4 weeks, beginning with the period of September 27th through October 24th, 2020. Applications can be filed for up to 6 months after each period end.
To see how much of a subsidy your business may qualify for, try our RESOLVE CERS Calculator
A loan to qualifying businesses of up to $60,000 (a $40,000 “base” amount plus a new $20,000 “top up”) available from most financial institutions and backed by the federal government. Highlights include:
- 0% interest in year 1, and
- Forgiveness of up to $20,000 (25% of the base amount and another 50% of the top up amount) IF the remainder has been repaid by December 31, 2022.
To qualify for this loan, businesses must have had an active CRA business number since at least March 1, 2020, have an active business bank account, and:
- Have paid employees between $20,000 and $1,500,000 in 2019
- Have eligible non-deferable expenses between $40,000 and $1,500,000 (examples include rent, property taxes, utilities, insurance, etc).
!! The Deadline to apply is March 31, 2021 !!
Anyone who thinks they might qualify should contact their bankers for further details
Available to most corporations, this is a cash rebate of the PST spent on a wide range of equipment purchases – as long as these assets are intended to be used almost entirely to produce income (over 90%).
The program comes into effect April 2021, and will be available for purchases made between then and March 2022. Application will be online, with an online portal expected to launch sometime closer to April 2021.
Examples of eligible assets include:
- Machinery and equipment, tools, appliances, and furniture
- Computer hardware and software
- Zero-emission vehicles
- A Record of Employment (ROE) should be filed for each employee who is laid off or takes unpaid sick leave as a result of Covid-19
- ROE’s can be filed online. Employers are encouraged to sign up for ROE Web immediately, as it can take 7 – 10 days to verify your account
- Paper copies of ROE’s can also be requested but may take longer to arrive by post
- Filling out the ROE – Applicable codes for ‘Reason for Issuing this ROE’:
- A: Shortage of work (if you have had to shut your doors or reduce staff)
- D: Illness or injury (if employee is isolating because of symptoms of Covid-19 or recent travel to a foreign country)
One of the first pandemic subsidies introduced, it was also one of the first to be pulled (it was effectively made redundant by the CEWS program). Eligible employers could reduce their payroll remittances by up to 10% of between March 18th and June 19th.
While this program has since expired, anyone who either received a TWS benefit OR did not receive TWS but did receive CEWS between March 18th and June 19th must file a form PD27 to ensure their 2020 T4 filings are processed correctly!
A relatively complicated subsidy that expired in September 2020. Its complexity was likely the reason it was not more widely used. It applied to property owners who had agreed to reduce rents by a minimum of 75%, subsidising landlords for up to 50% of this rent reduction.
PROGRAMS FOR INDIVIDUALS
Canada Recovery Benefit (CRB) (replacing the CERB program)
Provides support to employed and self-employed individuals who are directly affected by Covid-19. This program is designed for individuals who are not eligible for Employment Insurance (EI)
- Eligible individuals can receive $1,000 ($900 after taxes withheld) for a 2-week period
- If you continue to need support, you will need to apply every 2 weeks. CRB does not renew automatically.
- There are 13 eligible periods (26 weeks) between September 27, 2020 and September 25, 2021. These periods do not have to be taken consecutively.
- You can apply for benefits retroactively for any period up to 60 days after that period has ended.
- Eligibility requirements:
- During the period you’re applying for you were not employed or self-employed for reasons related to Covid-19, or you had a 50% reduction in your average weekly income compared to the previous year due to Covid-19.
- You did not apply for or receive CRSB, CRCB, short-term disability benefits, WCB, EI, QPIP
- You were not eligible for EI benefits
- You reside in Canada
- You were present in Canada
- You are at least 15 years old
- You have a valid Social Insurance Number
- You earned income of at least $5,000 in 2019, or in the 12 months prior to the date of application (self-employed individuals need $5,000 of revenue)
- You have not quit your job or reduced your hours voluntarily on or after September 27th, 2020
- You were seeking work during the period
- You have not turned down reasonable work during the 2-week period you are applying for
- CRA will provide you with a T4A tax information slip at tax time for the amount you received
- Apply by:
- Online application through CRA’s My Account
- Telephone: 1-800-959-2019 or 1-800-959-2041
If you earn more that 38,000 (line 23600 of your tax return) in the calendar year (excluding CRB payments) you will have to reimburse $0.50 of the CRB for every dollar of net income you earned above $38,000 on your income tax return. This will be due at the same time as your income tax return for the year. Net income includes CERB, CRCB, CRSB payments received.
If you are unable to work because of sickness or a need to self-isolate due to COVID-19, and you do not qualify for CRB benefits, you may qualify for up to 2 weeks of relief under the CRSB.
- If eligible you can receive $500 ($450 after taxes withheld) for a 1-week period
- If your situation continues past 1 week you can apply for a second week
- You can apply for a total of 2 weeks between September 27, 2020 and September 25, 2021
Those with a valid Disability Tax Credit (DTC) certificate from the Canada Revenue Agency automatically qualify for a non-taxable, non-reportable, one-time payment of up to $600 in recognition of expenses incurred during the Covid-19 pandemic by persons with disabilities.
- If you think you qualify for a DTC but have not yet applied, only applications received by December 31, 2020 will receive this one-time payment. To apply, you and a medical practitioner must jointly fill out and submit form T2201.
Homeowners under financial stress may be eligible for a mortgage payment deferral for up to 6 months. Applications are handled directly by the lender and are decided on a case-by-case basis. Please contact your lender to find out if your mortgage qualifies.