Shared by Grant ThorNton
Table of contents
- Canada Emergency Wage Subsidy (CEWS)
- Temporary Wage Subsidy
- Work Sharing Program
- Supplemental Unemployment Benefit (SUB) Plan
- Canada Emergency Business Account (CEBA)
- Canada Emergency Commercial Rent Assistance (CECRA)
- Tax Filing & Payment Relief
- Canada Emergency Response Benefit (CERB) – for Individuals
Return to: COVID-19 Resources: Management, Operations, HR and COVID-19
How it can benefit your organization
The CEWS enables organizations to retain employees and avoid significant lay-offs by offering to cover up to 75% of eligible employees’ wages during the pandemic period (retroactive from March 15, 2020 up to June 6, 2020).
Eligibility check
- The CEWS is wide-reaching and open to businesses (taxable corporations, self-employed, partnerships) as well as not-for-profit organizations (“NPOs”) and registered charities.
- Organizations need to meet certain minimum requirements for revenue declines (see details below).
- Organizations need to attest that they are doing all they can to pay employees the remaining 25% of their wages.
How to access
The application process will be available beginning April 27th. An online application portal on the CRA website is under development. You can take the following steps to prepare for your application:
- Organizations should register for My Business Account on CRA online (this can be done now).
- Organizations are required to apply for each eligible month, i.e. the revenue criteria below must be met on a month-by-month basis, however once qualified, the organization will be automatically qualified for the immediately subsequent period, i.e. if you qualify for March, you’ll automatically qualify for April. For May, the organization must meet the qualifying criteria.
- Once the organization determines its eligibility, the organization must continue to pay its employees and then apply for the subsidy through the online portal based on the remuneration paid.
- Use the calculator available on the government website (link provided below) to determine the subsidy for your organization. Step by step instructions have been provided. The information you input in to the calculator is not being retained by the CRA but is only a tool to assist you with calculating claim amounts.
- The employer will then receive a direct deposit payment for the subsidy amount.
Benefit details and further reading
The 75% subsidy is calculated for each employee. The subsidy is 75% on the first $58,700 of remuneration paid, up to a maximum of $847 per week. The maximum period of time available is March 15, 2020 up to June 6, 2020 (12 weeks). There is no maximum limit per employer.
The CEWS benefit will also include the employer-paid premiums on Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan or the Quebec Parental Insurance Plan related only to employees who are on paid leave.
To qualify, organizations must see a decrease in “revenues” of 15% in the current period (i.e. March, or 30% for April and May 2020) compared to either A) the same month in 2019 (i.e. March, April, or May 2019 respectively), or B) the average revenues from January and February 2020. Note that once your organization qualifies for one period, i.e. for a particular month, it will automatically qualify for one month after that as well.
“Revenues” refers to the inflow of cash or receivables in the course of the sale of goods, rendering of services, and others’ use of your resources in Canada for the period. Notably, Organizations can use their regular accounting method in determining whether revenues have fallen. So, if the accrual method is typically used and deferred revenues are recorded, reductions in revenues recognized from those deferral accounts should qualify. The option to use cash method accounting is available providing the employer elects to use this method and it is applied consistently to each period.
For more information about the Canadian Emergency Wage Subsidy, please read their insights.
How it can benefit your organization
For those organizations not eligible for the larger wage subsidy above, the Temporary Wage Subsidy is still available to provide up to 10% back for each employees’ wages during a similar period (retroactive from March 18, 2020 up to June 19, 2020).
Eligibility check
- The Temporary Wage Subsidy is also wide-reaching and open to certain small businesses (CCPCs which had at least $1 in business limit allocated to them i.e. $1 of the small business deduction in the prior year), individuals, partnerships, NPOs, and charities.
- Organizations must have had an existing payroll account with the CRA (“RP000X”) as of March 18, 2020.
- Organizations must pay remuneration to individuals employed in Canada.
How to access
- Organizations should continue paying employees and withholding source deductions (CPP, EI, income tax) from payments to employees as normal.
- When the organization is ready to remit those source deductions, compute the amount of Temporary Wage Subsidy the organization is eligible for.
- Remit the normal amount of CPP and EI to the CRA. Then also remit income tax withholdings but reduce the amount of income tax withholdings by the amount of the wage subsidy.
Example from the CRA website linked below: if you deducted $2,500 of income tax from your employees’ pay and calculated a subsidy of $2,050, you would reduce your current payroll remittance of federal, provincial, or territorial income tax by $2,050. You would remit $450 of income tax to the CRA. The remaining $2,050 that you keep would represent your subsidy.
Benefit details and further reading
Similar to the CEWS, the 10% subsidy is calculated for each employee. For each employee, the subsidy is 10% back on the first $13,750 of remuneration paid. Unlike the CEWS, there is a maximum subsidy of $25,000 for the employer. For associated or related organizations, they are not required to share or split the maximum $25,000 limit – in other words, it is strictly a $25,000 limit per employer. The maximum period of time available is March 18, 2020 up to June 19, 2020 (13 weeks).
Note: the remuneration covered by the Temporary Wage Subsidy will not also be eligible for the CEWS.
Grant Thornton has outlined what you need to know when it comes to the Temporary Wage Subsidy in a downloadable PDF.
How it can benefit your organization
Designed to help employers avoid full layoffs, Work-Sharing (WS) is an employment adjustment program providing income support to employees eligible for EI benefits who work a temporarily reduced work week while their employer recovers from a temporary reduction in the normal level of business activity. Organizations will benefit by paying reduced salaries to the eligible employee(s) for a reduced work-week and the government would provide income support to the individuals for the difference.
Eligibility check
- The organization must have been a business in Canada year-round for at least the past year.
- The organization must be a:
- private business
- publicly held company
- Government Business Enterpricse (GBE), also referred to as public corporations, and
- NPO experiencing a shortage of work due to a reduction of business activity and/or a reduction in revenue levels due to COVID-19.
- Must demonstrate that the shortage of work is temporary and beyond the organization’s control, and that the decrease in business activity (not necessarily revenues alone), is 10% or more.
- Must also submit a recovery plan designed to return the WS employee(s) to normal working hours by the end of the WS agreement. There must be a reasonable expectation of recovery.
Eligible employees include “core” employees (i.e. full or part-time employees employed year-round) who are eligible for EI benefits and who agree to participate in the WS program. In other words, seasonal hires or coops would not be eligible.
How to access
The application period must have a minimum duration of 6 weeks and a maximum duration of 76 weeks (increased from the typical 38 weeks). Applications must be made 10 calendar days prior to the requested start date (reduced from the typical 30 days). To apply, organizations must complete forms EMP5100 and EMP5101, and email them by clicking here.
Benefit details and further reading
The work sharing program allows organizations to reduce employees’ hours worked on a weekly basis from between 10% (one half-day) up to 60% (three days), on average. There are additional details and restrictions in place listed in the above government website.
If you need more information around the work sharing program, Grant Thornton breaks it down for you here.
How it can benefit your organization
To help with employee retention after the pandemic period eases, this program allows employers to top up an employee’s EI benefits so that the total amounts received by the employee equal up to 95% of the employee’s original remuneration. In other words, employers would pay an amount into the plan to raise the employee’s weekly earnings (EI benefits + top up).
Eligibility check
- The employee must be currently entitled to EI benefits, i.e. not currently working.
- The sum of the EI payments and top-up payments to the employee (made by the employer) cannot exceed 95% of the employee’s previous weekly earnings.
- The SUB plan must be registered with Service Canada.
How to access
- Interested organizations should register a SUB plan (see below for link to instructions).
- Organizations must also complete application form NAS5036, available online.
- Organizations then submit the SUB plan and application form to Service Canada in Bathurst, NB.
- Once approval is obtained, employers can start making top-up payments.
Benefit details and further reading
The purpose of the SUB plan is to provide supplemental payments to EI benefits during a period of unemployment due to a temporary stoppage of work, training, injury, or illness/quarantine.
If you need to register for a Supplemental Unemployment Benefit Plan, please click here.
How it can benefit your organization
The CEBA is implemented by eligible financial institutions in cooperation with Export Development Canada to provide interest-free loans to help cover costs during a period of reduced revenues. A portion (up to 25%) may be forgiven if repaid by Dec 31, 2022.
Eligibility check
- Organizations must be a small business or NPO.
- Organizations must demonstrate that they paid between $20K and $1.5M in total payroll in 2019.
Note that it is currently unclear whether a reduction in revenues must be demonstrated and what the definition of revenues would include.
There are certain organization’s which are excluded from eligibility including:
- Government organization’s or bodies, or an entity owned by a government organization or body
- Unions, charitable, religious or fraternal organization or entity owned by such an organization or it if is, it is a registered T2 or T3010 corporation that generates a portion of its revenue from sales of goods or services.
How to access
Financing programs began rolling out in the three weeks after March 27, 2020. Interested organizations should contact their current financial institutions to partake.
Benefit details and further reading
These loans are available up to $40,000 and are interest-free in order to provide NPOs with additional cash flow. If the loan is repaid by Dec 31, 2022, up to 25% ($10,000) is forgivable.
For further details around the Canada Emergency Business Account, see Grant Thornton’s insights.
How it can benefit your organization
Designed to provide rent relief to organizations, the program offers forgivable loans to eligible commercial property owners for the months of April, May and June. Rent owed by an organization can be reduced by at least 75%.
Tenants – Eligibility check
- The organization must pay less than $50,000 per month in rent, per location, as per a valid and legally enforceable rental agreement.
- The organization must have temporarily ceased operations or have experienced a 70% decrease in pre-COVID-19 revenues.
- The organization must generate no more than $20 million in gross annual revenues, on a consolidated basis.
Landlords – Eligibility check
- The landlord must generate rental revenues from a commercial real property located in Canada
- The landlord must have a mortgage loan secured by the commercial real property that is occupied by one or more small business tenants. A landlord that does not have a mortgage on the property may still be eligible.
- There must be a rent reduction agreement in place for each of April, May and June 2020, providing rent reduction of at least 75% each month. The agreement must also include a moratorium on eviction for the same three months.
- The landlord must have declared rental income on their tax return for 2018 and/or 2019.
- The landlord must agree that it will not attempt to recover the foregone rent after the 3-month period is over.
How to access
The program will be administered by the CMHC, details on how to apply is expected to be available mid-May.
Benefit details and further reading
The CECRA will provide forgivable loans to commercial property owners (landlords) to cover 50% of commercial rent for the months of April (retroactive), May, and June. The loan to the landlord will be forgiven if they provide the commercial tenant with rent forgiveness equal to at least 75% of their rent. The tenant would cover the remainder.
If you need more information around the rent assistance program, Grant Thornton breaks it down for you here.
You can also sign up with CMHC to recieve more information as it becomes available.
- GST/HST payments and import/export duties are deferred until June 30, 2020 for:
- Monthly filers for reporting period end dates of February, March, and April 2020
- Quarterly filers for reporting period end dates of February, March, and April 2020
- Annual filers for the year end dates ending in February, March, and April 2020 (including instalments due in March, April, or May 2020)
Incorporated Not-for-Profit Organizations (T2 and T1044)
For tax year-ends with typical filing deadlines between March 19, 2020 and May 31, 2020, filing deadlines have been extended to June 1, 2020. Examples:
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Fiscal Year-End
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Typical Filing Due Date
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Revised Filing Due Date
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|
September 30, 2019
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March 31, 2020
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June 1, 2020
|
|
October 31, 2019
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April 30, 2020
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June 1, 2020
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|
November 30, 2019
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May 31, 2020
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June 1, 2020
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December 30, 2019
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June 30, 2020
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June 30, 2020
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Charity Returns
If the Organization’s typical filing due date for the charity return falls between March 18, 2020 and December 31, 2020, the filing date has been extended to December 31, 2020.
Individuals
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Taxpayer
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Original filing deadline
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New filing deadline
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New balance due date
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2020 Instalments extension
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Individuals without business income
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April 30, 2020
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June 1, 2020
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September 1, 2020
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June 15, 2020 instalments deferred until
Sep 1, 2020
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Individuals with business income (& spouse)
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June 15, 2020
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Unchanged
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September 1, 2020
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June 15, 2020 instalments deferred until
Sep 1, 2020
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How it can benefit your organization
While the CERB will not benefit organization’s directly, any employees that ultimately need to be laid off should be directed to apply for the CERB benefit which is the largest benefit announced for previously employed or self-employed individuals. Organizations can work with the employees that needed to be laid off to help maintain morale during the crisis.
Eligibility check
- Individuals must have earned at least $5,000 of employment or self-employment in 2019 or in the 12-month period before the application period.
- Individuals must be a resident of Canada and at least 15 years of age.
- Individuals must not earn income in excess of $1,000 during each four-week application period.
- Individuals must cease working for at least 14 consecutive days in each four-week application period due to reasons related to COVID-19.
How to Access
CERB can be applied for by individuals online at the webpage linked below by answering a few questions at the bottom of the page and then proceeding to the application process. Individuals can also apply using CRA’s My Account and through Service Canada.
Benefit Details and Further Reading
Individuals who qualify will receive up to $500 per week for up to 16 weeks. On April 15th, the government expanded the eligibility to also include seasonal workers and other workers who have exhausted their regular EI benefits and cannot find work due to COVID19.
Canadians who have already applied for EI and whose application is processing should not apply for CERB. Also note that if CERB payments are received by an individual who later is determined to not have been eligible, those payments will need to be repaid.
For assistance with navigating the Canadian Emergency Response Benefit, please click here.
Return to: COVID-19 Resources: Management, Operations, HR and COVID-19
