(Updated April 23 at 9pm)
The federal government announced their aid package to assist Canadians during the COVID-19 crisis. Canada.ca has a helpful table of contents for its economic response plan. Below is a list of the various cash flow solutions:
Canada Emergency Response Benefit (CERB): The CERB will provide $2,000 a month for 4 months to working Canadians financially impacted by COVID-19, but aren’t eligible to receive EI Benefits. The application portal will launch on April 6.
The CERB can be paid via direct deposit (3-5 days funding) or cheque (10 days). The application window will be staggered according to birth month: April 6 (January to March), April 7 (April to June), April 8 (July to September), April 9 (October to December).
To be eligible to receive the Canada Emergency Response Benefit (CERB) from Service Canada, the following must apply:
- You must reside in Canada
- You are 15 years of age or older at the time of application
- You have stopped or will stop working for reasons related to covid-19, or because you are unable to work due to illness, or because you lost your employment for other reasons beyond your control; and
- If you are submitting for your first benefit period, that you have stopped or will stop working for at least 14 consecutive days within the 4 week benefit period; or
- If you are filing for a subsequent benefit period, you did not receive any employment or self employment income for the period for which you previously claimed the benefit and do not expect to receive any employment or self employment income in the 4 week benefit period
- You have not quit your job voluntarily
- You are not receiving nor have you applied for the CERB from the Canada Revenue Agency nor are you receiving Employment Insurance benefits for the same benefit period
- You have earned a minimum of $5,000 in income within the last 12 months or in the 2019 calendar year from one or more of the following sources:
- Employment income
- Self-employment income
- Self-employed workers who make up to $1,000 a month are now eligible to apply for the CERB
Canada Emergency Business Account (CEBA): The government will also guarantee loans of up to $40,000 for small businesses, which will be interest-free until December 31, 2022. Corporations should apply directly with their financial institution.
One quarter of each loan, up to $10,000, will be forgiven if businesses repay their balance before Dec. 31, 2022. If the loans aren’t repaid by that date, they can be converted into three-year term loans charging 5-per-cent interest.
The loans will be available to small- and medium-sized businesses as well as non-profits that have a registered operating company in Canada, had annual payrolls between $20,000 and $1-million in 2019. The CEBA only applies to incorporated businesses, not sole proprietorships or partnerships.
Canada Emergency Wage Subsidy (CEWS): To support businesses that are facing revenue losses and to help prevent layoffs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 75% of remuneration paid during that period. Program application will start on April 27.
The key rules for the CEWS are as follows:
- The subsidy is for wages paid to employees for the period from March 18 to June 20
- Your business must already have an existing business number and payroll account with the CRA on March 18, 2020.
- The new program will require an application to be filed with CRA – the ability to apply will start in three weeks.
- The company must have seen a revenue drop of at least 15% in March, and 30% for April and May of its gross revenue.
- The revenue drop can be compared against March, April and May of 2019, OR against January and March 2020.
- The subsidy is for salaries up to $58,700, or $847 a week
- Companies will be required to “show what the pre-crisis income was of an employee and show that they’re paying that employee an amount up to $847 and then they will get that money returned to them from the Canada Revenue Agency.”
- Payments will begin to be made six weeks from the application date. Unlike the 10% wage subsidy program this program will not work through the employer remittance account but instead will be a separate transfer from CRA. So, for those with tight cashflow this has to be carefully managed.
- The program will not require that employees be paid their full 100% salary.
- Companies will have to reapply every month and Morneau said there will be “severe” consequences for anyone who tries to take advantage of the system.
This program is separate and apart from the 10% wage subsidy program. The 10% program will continue to be in place The 10% is claimed via a reduced remittance of withholding income tax that you send to the CRA.
Canada Emergency Student Benefit (CESB): This benefit would provide $1,250 per month for eligible students or $1,750 per month for eligible students with dependents or disabilities. The benefit is available also to students who have jobs but are making less than $1,000 a month. This benefit would be available from May to August 2020.
Post-secondary (college and university) students who are currently in school, are planning to start school in September 2020, or who graduated from school in December 2019 are eligible for the CESB if they have lost work or cannot find work due to the pandemic.
Canada Emergency Commercial Rent Assistance: This program is for small businesses that will seek to 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 the program will require a partnership with provincial and territorial governments who are responsible for property owner-tenant relationships.
More details will be available soon.
BC Temporary Rental Supplement: The program gives $300 per month for eligible households with no dependents, and $500 per month for eligible households with dependents.
Households need to meet each of the following criteria to qualify for the BC Temporary Rental Supplement:
- Have a 2019 household income of less than:
- $74,150 for singles and couples without dependents
- $113,040 for households with dependents
- As a result of COVID-19:
- Be receiving or eligible for Employment Insurance; or
- Be receiving or eligible for the Canada Emergency Response Benefit offered by the federal government; or
- Have experienced, and be able to provide evidence of, a drop of 25% or more in monthly household employment income
- Be paying more than 30% of current household income towards rent
B.C. Emergency Benefit: The B.C. Emergency Benefit for Workers will provide a tax-free, one time $1,000 payment for B.C. residents whose ability to work has been affected due to COVID-19.. You can apply online starting May 1, 2020, or by phone starting on May 4.
To be eligible for the emergency benefit, you must:
- Have been a resident of British Columbia on March 15, 2020
- Meet the eligibility requirements for the Canada Emergency Response Benefit (CERB)
- Have been approved for the Canada Emergency Response Benefit, even if you haven’t received a federal benefit payment yet
- Be at least 15 years old on the date you apply
- Have filed, or agree to file, a 2019 B.C. income tax return
- Not be receiving provincial income assistance or disability assistance
Tax Balances & Instalments: You can forego all payment of taxes or instalments for tax owing after March 18, 2020 until August 31, 2020 without incurring any interest penalties. Although, if you expect to have a balance owing, you must still file your return by June 1st (June 15th if self-employed) to avoid any late-filing penalties.
Mortgage Deferral: Talk to your lender about a six-month mortgage deferral. This is not an interest-free deferral, simply a lengthening of the amortization and with the interest added on the back of the mortgage.
B.C. Climate Action Tax Credit: Lower-income BC residents in receipt of this credit will see some boost to their payment. The province says the maximum credit will double this year, with an eligible family of four getting up to $564 and eligible individual getting up to $218 in an enhanced payment.
GST Payments: For the next GST payment in May (the payment was moved up to April), government will provide a GST credit averaging $400 for single adults, and $600 couples.
Canada Child Benefit (CCB): $300 top-up to the CCB to assist parents.
BC Hydro: BC Hydro has implemented a COVID-19 customer service assistance program to help clients defer their utility bill payments. From their website: The COVID-19 Customer Assistance Program provides residential and commercial customers the option to defer bill payments or arrange for flexible payment plans with no penalty. Customers are encouraged to call our customer service team at 1-800-BCHYDRO (1-800-224-9376) to discuss bill payment options.
Residential customers facing temporary financial hardship and possible disconnection of their service due to job loss, illness, or loss of a family member may also be eligible for our Customer Crisis Fund, which provides access to grants of up to $600 to pay their bills.
ICBC: Many of you currently insure your vehicle(s) for commuting or business use. If you are working from home and are no longer commuting, consider switching your coverage to a lower-cost rate class (pleasure use). Please confirm eligibility details with your Autoplan broker. Remember to switch back when you resume your commute.