Canada Emergency Programs Expansion & Extension

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CANADA EMERGENCY BUSINESS ACCOUNT (CEBA)

June 16, 2020

CEBA is a $40,000 interest-free loan of which up to $10,000 is forgivable if the loan is repaid by December 31, 2022. The first edition of the program was launched on April 9th and is now referred to as the payroll stream, it targeted businesses with a payroll of $20,000 to $1,500,000. The expansion of the program, now referred to as the non-deferrable expenses stream, targets businesses with a payroll of $20,000 or less.

The expansion targets:

• Small businesses that lack payroll

• Sole proprietors receiving business income directly

• Family-owned corporations remunerating in the form of dividends rather than payroll

The non-deferrable expenses stream will be available for application on June 19th.

It is a two-step process:

• Apply at your primary financial institution where you hold your business chequing/operating account

• The application will be made online through the financial institution’s banking portal

• Apply through a CEBA website to provide supporting documentation

• Government of Canada will notify the financial institution and provide funding for the CEBA loan if approved

To qualify for the non-deferrable expenses stream a business will need to have:

• A business operating account at a participating financial institution

• A personal bank account is not eligible for the CEBA program

• A business number from the Canada Revenue Agency for payroll, corporate tax or HST

• To have filed a 2018 or 2019 return

• Have eligible non-deferrable expenses between $40,000 and $1,500,000

Non-deferrable expenses include:

• Rent

• Property tax

• Utilities

• Wages to arm’s length employees

• Lease payments for equipment

• Insurance

• Regularly scheduled debt service

• Contractual payments to independent contractors 

• Fees required to maintain licenses

Electronic or paper copies of receipts/invoices/agreements would be uploaded as evidence of your 2020 eligible non-deferrable expenses in the second part of the application process.

Find more info on CEBA at:

https://ceba-cuec.ca/

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CANADA EMERGENCY RESPONSE BENEFIT (CERB)

June 16, 2020

• The Prime Minister confirmed in his daily press conference that the CERB is being extended for two additional four week periods

• The CERB originally was to pay $2,000 per period for a maximum of 4 periods (16 weeks)

• Period 1 was March 15 – April 11

• The benefit would have expired in the fourth period ending July 4 for many recipients

• The benefit will now be available until August 29 

• The benefit is taxable

Find more info on CERB at:

https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra/who-apply.html