Canada Emergency Bank Account (CEBA)
The federal government has expanded the eligibility for the Canada Emergency Bank Account (CEBA) to businesses that paid between $20,000 and $1.5 million in total payroll in 2019. The new range will replace the previous one of $50,000 and $1 million.
The Canada Emergency Bank account is an interest-free loan of $40,000 to qualifying businesses. Up to $10,000 of that amount will be eligible for complete forgiveness if $30,000 is fully repaid on or before December 31, 2022.
Canada Emergency Wage Subsidy (CEWS)
The Canada Emergency Wage Subsidy provides a 75% wage subsidy to eligible employers for up to 12 weeks, retroactive March 15, 2020. Employers must demonstrate at least a revenue decline of 15% in March, and 30% in April and May.
Eligible Employers include:
- Taxable corporations
- Partnerships consisting of eligible employers
- Non-profit organizations
- Registered charities
- An employer’s revenue for this purpose is its revenue in Canada earned from arm’s-length sources. Revenue is calculated using the employer’s normal accounting method, and excludes revenues from extraordinary items and amounts on account of capital.
Amount of Subsidy
- The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020 is the greater of:
- 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
- The amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of the employee’s pre-crisis weekly remuneration, whichever is less.
- Pre-crisis remuneration for a given employee is based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration
- A special rule applies to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees is limited to the eligible remuneration paid in any period between March 15 and June 6, 2020 up to a maximum benefit of the lesser of $847 per week, and, 75% of the employee’s pre-crisis weekly remuneration.
- Employers are expected where possible to maintain existing employees’ pre-crisis employment earnings and cover the remaining 25% of remuneration.
- Eligibility is determined by the change in an eligible employer’s monthly revenues, year-over-year, for the calendar month in which the period began.
- Under an alternative approach, employers are also allowed to compare their revenue using an average of their revenue earned in January and February 2020.
- An eligible employee is an individual who is employed in Canada.
- Eligibility for CEWS of an employee’s remuneration is available to employees other than those who have been without remuneration for 14 or more consecutive days in the eligibility period, i.e., from March 15 to April 11, from April 12 to May 9, or from May 10 to June 6.
Refund for Payroll Contributions
- CEWS has been expanded to include a 100% refund for employer-paid contributions to Employment Insurance, Canada Pension Plan, Quebec Pension Plan, and the Quebec Parental Insurance Plan, for eligible employees for which the employer is eligible to claim the CEWS for those employees.
- This refund is not subject to the weekly maximum benefit per employee of $847 that an eligible employer may claim in respect of the CEWS.
Wage Subsidy Calculator
- A subsidy calculator has been provided on the Government of Canada website to help businesses calculate and preview their subsidy claims immediately.
How to Apply
- Eligible employers will be able to apply for CEWS through the Canada Revenue Agency’s My Business Account portal. Employers will need to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees.
Canada Emergency Response Benefit (CERB)
On April 15, the federal government announced the following changes to the CERB eligibility rules:
- Allow individuals to earn up to $1,000 per month while collecting CERB.
- Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.
- Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
Canada Emergency Commercial Rent Assistance Program (CECRA)
The Canada Emergency Commercial Rent Assistance Program will provide loans and/or 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. Implementation of this program will require a partnership with the provincial and territorial governments who are responsible for the property owner-tenant.
Additional details will be provided in the coming days.