• KD Wray

COVID-19 March 30th Updates


The Federal government is responding to the COVID-19 crisis with an economic response plan with three main programs:

  • CANADA EMERGENCY WAGE SUBSIDY (CEWS) for businesses to retain employees and bring back recently laid off employees

  • CANADA EMERGENCY BUSINESS ACCOUNT (CEBA) for businesses to provide liquidity to small businesses

  • CANADA EMERGENCY RESPONSE BENEFIT (CERB) for individuals who are unable to work, laid off, sick or staying home to care for children or someone sick



INDIVIDUALS

The CERB was announced on March 18th and remains essentially unchanged. It is a $2,000 a month taxable benefit for up to 4 months targeting:

  • Workers who must stop working due to COVID-19

  • Workers who are sick, quarantined or taking care of someone who is sick with COVID-19

  • Working parents who must stay home without pay to care for children that are sick or require care due to school and daycare closures

  • Wage-earners and self-employed, who would not otherwise be eligible for Employment Insurance

  • This plan is to cover those that can not work

  • The CERB will be accessible through a secure web portal starting in early April (April 6th is the target date)

  • Applicants will also be able to apply via an automated telephone line or via a toll-free number which will be announced

  • It has been suggested that My Account (CRA) and My Service Canada (EI\CPP\OAS) may be used to launch or roll the program out to taxpayers

  • Period covered is March 15, 2020, to October 3, 2020

  • The first payment is to be made within 10 days of application

BUSINESSES

The CEBA was announced on March 27th, the details are slowly coming out. The applications are not ready for implementation by the financial institutions based on inquires. The following has been taken from www.canada.ca and the Canadian Federation of Independent Business (CFIB):

  • Interest-free loan up to $40,000 for small businesses and not for profit organizations for the first year

  • To qualify organizations will need to demonstrate they had a total 2019 payroll between $50,000 and $1,000,000

  • If the loan is repaid by December 31, 2022, 25% ($10,000 maximum) of the principal will be forgiven

  • The forgiveness would likely be taxable though this remains to be confirmed

  • It is expected that the program will be rolled out within 3 weeks of the announcement and should be applied for through your current financial institution


The CEWS was announced on March 30th by the Prime Minister at his daily press conference. The program we believe is replacing the TEMPORARY WAGE SUBSIDY announced on March 18th. It was mentioned with no details in the Prime Minister’s press conference on March 27th. The Minister of Finance and the Minister of Small Business will hold a press conference on Tuesday, March 31st to lay out the program. Below was taken from the press conference:

  • Purpose of the program is to retain current workers and recall laid-off workers

  • Businesses have to be able to demonstrate a decline in revenue of 30% due to the COVID-19 crisis

  • Program is NOT based on the number of employees

  • Charities, not for profits, small and large businesses qualify

  • Program commences as of March 15th

  • The program will pay 75% of the employee’s wage up to a maximum annual wage of $58,700

  • Targeting support of up to $847 a week per employee depending upon their wage

  • Government is encouraging the employer to top the wage (25%) if they are able but this is not a requirement

  • Government is concerned about abuse in this program, mentioned a number of times in the press conference, Canada Revenue Agency will be monitoring to ensure that the funds flow through to the employees

  • No mention of the mechanism to flow the funds to the employers, seemed to imply that the employer could use the CEBA initially until the funds flowed from the Federal Government

  • The idea behind the program is for businesses to retain their workers so that they are ready to immediately be operational upon the resolution of the COVID-19 crisis



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