Editor’s note: This article has not been substantively updated since July 27, 2020. Please consult our regular coverage for the latest information.
The federal government has enacted measures valued at more than $250 billion to mitigate the financial impacts of Covid-19. The highlights below cover employment benefits, business loans and wage subsidies, retirement accounts and individual tax benefits.
Canada Emergency Response Benefit and EI
The Canada Emergency Response Benefit (CERB) is a taxable benefit that provides $2,000 every four weeks for workers who lose income as a result of the pandemic due to job loss, illness, quarantine, caring for others (including children) and work disruption. The benefit lasts a maximum of 24 weeks.
Workers qualify whether for CERB or not they are eligible for EI. Workers who are making up to $1,000 a month will also be able to qualify. Those receiving non-eligible dividends will still be eligible for CERB.
Applications opened online and by phone on April 6, with payments arriving within five days for direct deposits and within 10 days for cheques by mail.
More information is available at www.canada.ca/coronavirus-CERB
Benefits for workers who applied for employment insurance (EI) on or after March 15 will mirror CERB payments for the first 16 weeks.
That means people who would have received EI benefits below the $2,000-per-month threshold will now be bumped up to the maximum payment. Those who would normally qualify for more than $500 per week in employment insurance (the maximum benefit is $573 per week) will instead receive the CERB payment of $2,000.
EI-eligible workers will still qualify for their usual benefits, whether lower or higher than $2,000 per month, after CERB expires.
People who were already receiving EI will continue to do so and need not apply for CERB, but can switch to the program if their EI benefits end before October if they remain jobless due to Covid-19.
Those whose EI benefits have run out since the start of the calendar year will qualify for CERB, as will seasonal workers who have exhausted their regular EI benefits and whose seasonal work has been disrupted by the outbreak.
Those applying for EI sickness benefits are no longer required to provide a medical certificate.
Support for seniors
The government has announced one-time, tax-free top ups to old age security (OAS) and guaranteed income supplement (GIS) recipients. OAS recipients will receive $300 and GIS recipients will receive $200.
The minimum withdrawal rate for RRIFs has dropped by 25% for 2020. A similar decrease will apply to those receiving variable benefit payments under defined-contribution pension plans.
Support for disabled people
The federal government says people who are eligible for the disability tax credit will receive a one-time, tax-free $600 payment to help offset extra expenses during Covid-19. Legislation for the benefit has yet to pass.
Support for students
The federal government has announced a program that will give monthly payments of $1,250 to post-secondary students whose education and job prospects are disrupted by Covid-19.
The payments will run from May through August.
The benefit can increase to $2,000 for people with disabilities or who care for others.
The government says students will also be eligible to receive payments of between $1,000 and $5,000 for volunteering in their communities.
Measures for businesses
The Canada Emergency Wage Subsidy (CEWS) is a federal benefit designed to help businesses cover up to 75% of wages and keep their employees on payroll.
The benefit will pay 75% of the first $58,700 normally earned by employees, up to $847 per week. The subsidy is expected to last at least until the end of August. The government said the funds will start to flow around early May.
Employers who can show that their revenues have fallen by at least 15% for the month of March — compared to either an average of January and February 2020 revenue, or compared to March 2019 revenue — will be eligible for the benefit. In April and May, employers who can show their revenues have fallen by at least 30% (against either Jan./Feb. 2020, or the same month last year) will be eligible.
The Canada Revenue Agency has launched an online tool that helps business owners calculate the amount they’ll be eligible for and preview their subsidy claims.
Employers will receive a 100% refund for EI and CPP/QPP contributions for furloughed employees.
Employees for whom employers receive the wage subsidy are, in most cases, ineligible for CERB. [Editor’s note: This line was clarified on Sept. 24. It previously stated that employees could not apply for “other unemployment benefits.”]
Organizations that don’t qualify for the Canada Emergency Wage Subsidy may still qualify for the previously announced wage subsidy of 10%.
Employers can apply for the wage benefit through the Canada Revenue Agency’s My Business Account portal. More information about the subsidy is available here.
The work-sharing program — whereby employees whose hours get reduced by an average of 10% to 60% can claim employment insurance for lost wages — has been extended to 76 weeks from 38.
Canada Emergency Commercial Rent Assistance provides forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments payable by eligible small business tenants experiencing financial hardship during April, May and June.
The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75% for the three corresponding months under a rent forgiveness agreement, which will include a pledge not to evict the tenant while the agreement is in place.
The small business tenant would cover the remainder, up to 25% of the rent. Affected small business tenants are those paying less than $50,000 per month in rent and who have temporarily ceased operations, or have experienced at least a 70% drop in pre-Covid-19 revenues.
Loans for businesses are being offered through the Business Credit Availability Program (BCAP), which is providing $65 billion of support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Those agencies are providing credit through banks.
The Canada Emergency Business Account (CEBA) offers government-guaranteed bank loans of up to $40,000 for small businesses. The loans will be interest-free until Dec. 31, 2022, and up to $10,000 can be waived for repayment. CEBA is available to sole-proprietor businesses, as well as businesses that paid between $20,000 and $1.5 million in total payroll in 2019.
These programs will be available in mid-April through businesses’ current financial institutions. Read advice from tax experts on accessing loans and other measures businesses can take.
Large and medium-sized businesses can apply for support through the Large Employer Emergency Financing Facility, if they have $300 million or more in revenues and maintain employment and investment activities. Mid-sized companies will also receive access to BCAP.
Other measures for individuals
Canada Child Benefit
The maximum annual CCB payment amount will increase for the 2019-20 benefit year by $300 per child as part of the May payment. The average increase for families will be approximately $550.
Tax filing deadline
The filing deadline for individuals is now June 1. Individuals and businesses that owe taxes can defer payments until September. The Canada Revenue Agency has also halted debt collection. Any penalties and interest in respect of amounts owed will not be charged if payments are made by Sept. 30.
Those who expect to receive the GST credit and/or Canada Child Benefit (CCB) should file their returns as soon as possible to ensure their entitlements for the 2020-21 benefit year are properly determined.
All businesses can defer T2 corporation income tax returns that would otherwise be due in June, July or August to Sept. 1; T3 trust income tax returns that would otherwise be due in June, July or August are also due Sept. 1.
U.S. taxpayers in Canada have until July 15 to file for an extension of the U.S. tax filing deadline to Oct. 15 (from the already extended deadline of July 15). The extended filing deadline would not extend the payment deadline of U.S. federal income taxes, which is July 15. The U.S. Internal Revenue Service has also offered snowbirds tax residency relief if they cannot leave the U.S. due to travel restrictions.
Those eligible for the GST credit will receive a one-time special payment of about $400 for singles and $600 for couples on April 9. More information about eligibility here.
Payments are paused from March 30 until Sept. 30, with no accrual of interest.
Multiple provinces now permit virtual witnessing of certain legal documents, including powers of attorney and wills. Provisions vary by province.