Assistance for Employees
Canada Emergency Response Benefit (CERB) (NEW as of March 25, 2020)
As announced March 25, 2020, the CERB will provide temporary income support to eligible workers (including wage earners, contract workers, and self-employed individuals who would not otherwise be EI-eligible) who cease working for COVID-19-related reasons or are eligible for EI regular or sickness benefits. To be eligible for the CERB, a worker must:
- be residing in Canada and be at least 15 years of age;
- have ceased working because of COVID-19, but not due to their own resignation;
- have had income of at least $5,000 in 2019 (or in the 12 months prior to the date of their application); and
- be or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period (and, for subsequent periods, expect to have no employment income).
It is currently expected that qualifying participants will receive $2,000 per 4-week block from March 15 to October 3, 2020, up to a maximum of 16 weeks. Applications for the CERB will be accepted starting on April 6, 2020, but applicants will be able to continue to apply for EI until April 6, 2020.
In particular, the CERB is intended to assist employees who, for example: (i) are sick or quarantined or caring for those who are sick or quarantined; (ii) are working parents staying home without pay to care for children who are sick or who are home due to school closures; or (iii) have lost their jobs, or had their hours reduced to zero, due to COVID-19.
For more information on the CERB, click here.
Employment Insurance (EI) (for all claimants who applied to EI prior to March 25, 2020)
For all claimants who applied to EI prior to March 25, 2020 (i.e. the announcement date of the Canada Emergency Response Benefit), EI is available to eligible employees facing a reduction in "normal weekly earnings" of at least 40 percent due to illness, injury or quarantine. The Government of Canada announced in mid-March that (i) the one-week waiting period for EI sickness benefits would be waived for new claimants who are quarantined so they could be paid for the first week of their claim; (ii) there would be priority EI application processing for EI sickness claims for clients under quarantine; and (iii) people claiming EI sickness benefits due to quarantine would not have to provide a medical certificate to qualify, they must only provide a declaration that a quarantine has been imposed either by law/public health official or that it has been recommended by a public health official and requested by the individual’s employer, a medical health professional, or a person in authority.
For more information on EI (as applicable to claimants who applied prior to March 25, 2020), click here.
Provincial Assistance Programs
In addition to the federal benefits outlined above for workers, certain provinces have announced interim assistance measures for workers affected by COVID-19. For example, as of the time of writing:
- Alberta announced the Emergency Isolation Support Program, which will provide eligible workers with a one-time payment of $1,146. For more information, click here.
- British Columbia announced the B.C. Emergency Benefit for Workers, which will provide eligible workers with a one-time payment of $1,000. For more information, click here.
- Saskatchewan announced the Self-Isolation Support Program, which will provide eligible individuals with a payment of up to $900. For more information, click here.
- Québec announced the Temporary Aid for Workers Program, which will provide eligible workers with a payment of $573 per week. For more information, click here.
- New Brunswick announced an income benefit for eligible workers to bridge the gap between when a worker lost their job or closed their business after March 15, to when the national benefit takes effect. For more information, click here.
Assistance for Employers
Canada Emergency Wage Subsidy
The Government of Canada announced the Canada Emergency Wage Subsidy, a 75% wage subsidy for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. The subsidy is to be offered to employers experiencing a reduction in revenue of at least 30% in March, April or May due to COVID-19. The subsidy will provide up to $58,700 per employee. For more information on the Canada Wage Subsidy please see here.
Organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the separate 10% wage subsidy that spans from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
Canada Emergency Business Account
Announced March 27, 2020 this program will provide funding to eligible financial institutions so that they can provide interest-free loans in the form of lines of credit of up to $40,000 to businesses with payrolls of less than $1 million. A quarter of this loan (up to $10,000) is eligible for complete forgiveness.
Small and Medium-sized Enterprise Loan and Guarantee Program
This program will enable up to $40 billion in lending, supported through Export Development Canada and Business Development Bank, for guaranteed loans when small businesses go to their financial institutions to help weather the impacts of COVID-19. These loans will be 80 per cent guaranteed by Export Development Canada, to be repaid within one year.
Small and medium-sized businesses can also get support through a new Co-Lending Program that will bring the Business Development Bank of Canada together with financial institutions to co-lend term loans to these businesses for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program, which will be risk-shared at 80 per cent between the Business Development Bank of Canada and the financial institutions. Eligible financial institutions will conduct the underwriting and funding directly for customers.
Tax Payment Deferral
On March 18, 2020, the Government of Canada announced that all businesses will be permitted to defer, until after August 31, 2020, the payment of any income tax amounts that become owing in between March 18 and September 1, 2020. This relief applies to tax balances due, as well as installments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
The CRA will not contact any small or medium sized businesses to initiate any post-assessment GST/HST or Income Tax audits for four weeks after March 18. For the vast majority of businesses, the CRA will temporarily suspend audit interaction with taxpayers and representatives.
For more information, click here.
Work-Sharing Program Enhancements
The work-sharing program is an adjustment program administered through Service Canada, designed to help employers avoid layoffs during times of temporary economic difficulty. It allows employers to schedule reduced work weeks for their employees who can then access EI for an income supplement.
Due to COVID-19, the length of time that employers are permitted to use the work-sharing program has been increased to 76 weeks, from the usual limit of 38 weeks. The mandatory waiting period has also been waived.
For more information on work sharing arrangements, click here.
Supplementary Unemployment Benefit Plans (SUB Plans)
An employer may establish a SUB Plan, subject to certain requirements, to top up employees’ EI benefits during a period of unemployment during a temporary layoff caused by e.g. sickness due to COVID-19.
A SUB Plan needs to be registered with Service Canada and must meet certain requirements in order not to be treated as income that would reduce the worker’s EI benefits. Among other things, the SUB Plan must:
- Identify the group of employees covered and duration of the plan;
- Cover a period of unemployment caused by temporary work stoppage, training, or illness/injury/quarantine;
- Require employees to apply for and receive EI benefits in order to receive payments under the plan;
- Require that the combined weekly payments from the SUB Plan and the portion of the EI weekly benefit rate not exceed 95% of the employee’s normal weekly earnings; and,
- Be entirely financed by the employer.
If a SUB Plan meets all the requirements for registration with Service Canada, it will be registered as of the date on which it was submitted to Service Canada.
As of March 19, 2020, there have not been any changes to the SUB Plan regulations due to COVID-19. The full list of SUB Plan requirements and more information on the SUB Plan can be found here.