Federal Government’s Emergency Response Plan – COVID-19
We are doing all that we can at MacDonald & Associates to ensure assistance to all as, together, we navigate this unprecedented world health crisis. We will continue to monitor the Federal and Provincial government responses, World Health Organization (WHO) and world news updates regarding COVID-19. We will continue to provide daily updates to you with essential information to equip you to make the necessary decisions to maintain the health and safety of your employees.
Natalie and Mackenzie are writing for the Globe and Mail, while Kathryn is writing for the National Post in order to comment on employment issues as they are impacted by COVID-19.
On March 18, 2020, the Federal government unveiled Canada’s COVID-19 Economic Response Plan to provide financial support for individuals, businesses and various industry sectors during the COVID-19 pandemic. The government has made changes to the earlier announced measures, as it received feedback from different segments of the population and industry. We provide a summary of these programs for individuals and businesses for your convenience below. The most up-to-date information and a complete list of federal program offerings is available here.
Support for Businesses
- Canada Emergency Wage Subsidy (CEWS)
The CEWS supports employers by providing a 75% wage subsidy to enable businesses to either re-hire their workers or continue to pay existing ones through the COVID-19 crisis.
The subsidy covers 75% of an employee’s wages – up to $847 per week – for employers of all sizes and across all sectors. To be eligible, business must show a drop in gross revenues of at least 15% in March and 30$ in April and May. The program will be in place for a 12-week period, from March 15 to June 6, 2020.
Employers receiving CEWS are also entitled to receive a 100% refund for certain employer contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan, paid in respect of employees who are on leave with pay.
Employers who receive both the CEWS and the 10% Temporary Wage Subsidy or a period should be aware that any benefit from the Temporary 10% Wage Subsidy for remuneration paid in a specific period will generally reduce the amount available to be claimed under the CEWS in that same period.
- Temporary 10% Wage Subsidy
The temporary 10% wage subsidy is a 3-month measure that allows eligible employers to reduce the amount of payroll deduction that they are required to remit to the Canada Revenue Agency (CRA).
- Extended Work-Sharing Program
The federal government extended the maximum duration of the work-sharing program from 38 weeks to 76 weeks for employers who are affected by COVID-19.
This program provide income support to employees eligible for Employment Insurance who agree to reduce their normal working hours because of developments beyond the control of their employers.
- Canada Emergency Business Account (CEBA)
CEBA provides interest-free loans of up to $40,000 to small businesses and non-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.
Organizations need to demonstrate they paid between $20,000 and $1.5 million in total payroll in 2019 to qualify for the loan. If the borrower repays the loan on or before December 31, 2022, 25 percent of the loan (up to $10,000) will be forgivable.
- Canada Emergency Commercial Rent Assistance (CECRA)
CECRA will provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), May and June by at least 75%. Eligible small businesses are businesses, including non-profit and charitable organizations that:
- Pay no more than $50,000 per month in gross rent per location;
- Generate no more that $20 million in gross annual revenues; and
- Have temporarily ceased operations or have experienced at least a 70% decline in pre-COVID-19 revenues.*
*Small businesses can measure their revenue by comparing revenues in April, May and June 2020 to that of the same month in 2019. Alternatively, they can also use an average of their revenues earned in January and February 2020.
The implementation of CECRA will require a partnership between the federal and provincial and territorial governments, which are responsible for property owner-tenant relationships. The details of this program are still being worked out and will be released soon.
In Ontario, this program is known as Ontario-Canada Emergency Commercial Rent Assistance Program, (OCECRA).
Support for Individuals
- Canada Emergency Response Benefit (CERB) for those facing loss of income
The federal government offers a taxable benefit of $2,000 every 4 weeks for up to 16 weeks to eligible workers who have lost their income or part of their income due to COVID-19.
Individuals are able to earn up to $1,000 per month and still be eligible to collect the CERB. The federal government website offers an online questionnaire to help guide individuals to the service option that best fits their individual situation (CERB vs. Employment Insurance).
- Temporary salary top-up for low-income essential workers
The federal government is currently working with provinces and territories to provide a top up to the salaries of low-income workers that have been deemed essential in the fight against COVID-19. Workers who earn less than $2,500 per month on a full time basis will be eligible.
On April 25, 2020, Ontario government announced it will be providing frontline staff with a temporary pandemic payment.
- Increased Canada Child Benefit during May
On May 3, 2020, Prime Minister Trudeau announced that parents will receive an extra $300 per child through the Canada Child Benefit (CCB) in May. This increased benefit will be delivered as part of the scheduled CCB payment in May and there is no need to apply for it separately.
- Special Goods and Services Tax Credit payment
The federal government is providing a one-time special payment starting April 9, 2020 through the Goods and Services Tax Credit for low and modest-income families. The average additional benefit will be close to $400 for single individuals and close to $600 for couples.
- Extra time to file income tax returns
The filing due date for 2019 income tax returns for individuals is now June 1, 2020. Payment of income tax balances or instalments are being deferred until after August 31, 2020 without incurring interest or penalties.
- Mortgage payment deferral
Homeowners struggling to meet their mortgage payment obligations may apply through their financial institution for mortgage payment deferral of up to six months. It is important to stress that the mortgage payment deferral is not mortgage forgiveness and interest that would normally accrue as part of the deferred payments will be added to the outstanding balance of the mortgage.
The federal government has developed Canada COVID-19 app to help Canadians track their symptoms and access the latest updates from trusted information sources directly on their smartphones. Alternatively, individuals can sign up to receive regular updates from the Government of Canada about COVID-19 directly to their email here.