Click here to learn about Canada’s COVID-19 Economic Response Plan and support available for individuals and businesses

March 27, 2020

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We continue to update this information as new updates become available, but should you have questions about any of these government initiatives or programs, please contact your Smythe Partner directly.

Many businesses are struggling making the decision whether to retain their workforce while revenues are decreasing and communities are pressured into self-isolation. To support eligible employers and employees, the Federal Government has announced changes to the Employment Insurance (EI) Sickness Benefits and the Work-Sharing program.  

More details are needed to clarify certain eligibility conditions and timing as well as confirm how to access these measures. 

As businesses learn more about the existing programs, as well as the changes, they should consider contacting their employment and human rights lawyer. 

For federal and provincial tax deadlines or for information on other measures, click here

Support for Businesses to Retain Workers 

[1] On March 27, 2020, Prime Minister Justin Trudeau announced the wage subsidy will be back dated to March 15 and will be increased to 75%.  Details of this change will be updated when the information becomes available.

A 3-month Temporary Wage Subsidy  

“Eligible employers” will receive a temporary wage subsidy in the form of reduced payroll remittances for remuneration paid between March 18[1] and June 19, 2020 (the “Eligible Period”).

Eligible employer means one who meets all of the following three criteria:

  • employs one or more individuals in Canada;
  • has a payroll account number registered with the CRA on March 18, 2020; and
  • is one of the following: 
    • A Canadian Controlled Private Corporations (“CCPC”) that would have a small business limit greater than nil for its last taxation year ending before March 18, 2020*;
    • An individual (other than a trust);
    • A registered charity;
    • A partnership, all of the members of which are described in (a) to (d); and
    • Non-profit organizations

*Note: The requirement for a CCPC to have a small business limit in its last taxation year ignores the passive income grind. Thus, a CCPC would have a small business limit if its taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, was less than $15 million and it was assigned a portion of the available limit by the group.

Remuneration eligible for this subsidy includes salary, wages, bonuses, or other remuneration paid to an employee during the Eligible Period.

The subsidy is equal to 10% of remuneration paid during the Eligible Period, to a maximum of $1,375 per employee and $25,000 per employer[1]. Note that associated CCPC’s do not share this amount.  

To receive the subsidy, the employer may reduce its remittances to CRA of income tax withheld (not CPP or EI) on remuneration paid between March 18 and June 19, payable on the employer’s regular remittance due date.

The subsidy will be considered taxable income to the employer.

Support for Canadian Workers and Employers

Canada Emergency Response Benefit (CERB)

Update

  • The government has announced the COVID-19 emergency benefit, will no longer be taxed
  •  Successful applicants will now receive the full amount for up to four months 

What it is:

  • $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic.
  • The CERB replaces the previously announced Emergency Care Benefit and Emergency Support Benefit.

 Who is eligible:

The CERB covers workers who:

  • have lost their job
  • are sick
  • quarantined
  • taking care of someone who is sick with COVID-19
  • and parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures

The CERB applies to:

  • wage earners
  • contract workers
  • self-employed individuals who would not otherwise be eligible for Employment Insurance (EI)
  • workers who are still employed, but are not receiving income because of disruptions to their work situation due to COVID-19

How to apply:

  • The portal for accessing the CERB will be available in early April.
  • Canadians will begin to receive their CERB payments within 10 days of application.
  • The CERB will be paid every four weeks and be available from March 15, 2020 until October 3, 2020.

If you have questions about any of these government initiatives or programs, please contact your Smythe Partner directly.

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