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Bryan Hubbell

Tax Principal at Manning Elliott Abbotsford
by Bryan Hubbell
April 24, 2020

Tweaks to COVID-19 Relief Programs and New Programs Announced

The Government of Canada has continued to tweak existing COVID-19 relief programs and announce new programs to assist individuals and businesses struggling with the effects of the COVID-19 crisis. The notable announcements and changes are summarized below.

Canada Emergency Response Benefit (“CERB”)

The CERB provides a monthly taxable benefit of $2,000 for up to four months to individuals who:

  • Reside in Canada and are at least 15 years old;

  • Have stopped working due to COVID-19 – they are sick or quarantined, have to look after sick family members, have to look after children at home, their businesses have closed or have been laid-off;

  • Had employment and/or self-employment income1 of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and,

  • Have not quit their job voluntarily.

On April 15, 2020, it was announced that individuals who earn up to $1,000 of employment and/or self-employment income within the four-week benefit period will now be eligible for the CERB. This change will be retroactive to March 15, 2020.

CERB eligibility has now also been extended to individuals who have or will exhaust their Employment Insurance benefits between December 29, 2019 and October 3, 2020.

Temporary Salary Top-Up for Low-Income Essential Workers

The federal government announced it will work with the provinces and territories on a temporary salary top-up program for front-line essential services workers in hospitals and senior long-term care facilities earning less than $2,500 per month. 

Details of this proposed program have not yet been released.

Canada Emergency Business Account (“CEBA”)

The CEBA provides eligible small businesses and not-for-profits (“NPOs”) with government backed loans of up to $40,000 to cover operating costs. These loans are interest-free until December 31, 2022. If the loans are repaid by December 31, 2022, 25% of the loan, to a maximum of $10,000, is forgivable. CEBA loans were originally available to businesses and NPOs that had total payroll in 2019 between $50,000 and $1,000,000.

On April 16, the federal government announced an expansion of the CEBA program to included businesses and NPOs which had 2019 payroll between $20,000 and $1,500,000.

Eligible small businesses and NPOs can apply for CEBA loans through their bank or credit union. 

Canada Emergency Commercial Rent Assistance (“CECRA”)

On April 16, the federal government announced it would be working with the provinces and territories to launch the CECRA program for small businesses. The program will seek to provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April, May, and June. 

Details of this proposed program have not yet been released.

Support for the Energy Sector

On April 17, the federal government announced measures to support Canada’s energy sector. These include

  • $1.7 billion to clean up orphan wells in Alberta, Saskatchewan and British Columbia.

  • $750 million to establish a emission reduction fund with a focus on methane. 

  • Provide additional credit to medium size energy businesses through BDC and EDC.

Details of this proposed program have not yet been released.

Support for Small Business

The federal government will provide $962 million to regional development agencies and the community futures network to provide additional support to small businesses.

The federal government will also provide $270 million to Futurepreneur Canada and the Industrial Research Assistance Program (“IRAP”) to support innovators and other early-stage development firms that may not qualify for the Canada Emergency Wage Subsidy.

Details of this proposed program have not yet been released.

Support for Arts, Culture and Sports

The federal government will provide $500 million to Heritage Canada to support businesses and organizations in the arts, culture and sports sectors. The funds will be intended to support artists, creators, and rising sports stars by supporting organizations that are currently struggling with cash flow.

Details of this proposed program have not yet been released.

Support for Students

On April 22 the federal government announced a new income support benefit for post secondary students and recent graduates who are ineligible for the CERB or Employment Insurance – the Canada Emergency Student Benefit (“CESB”).

The CESB will provide a monthly benefit of $1,250 for eligible students for the months of May through August 2020. Students with dependents or with permanent disabilities will be entitled to an additional $500 for a monthly benefit of $1,750.

The CESB will be administered by the CRA with more details to come.

The federal government announced the Canada Student Service Grant which will provide up to $5,000 toward post-secondary costs for students participate in certain national service activities. Details will be available through the “I Want to Help” platform that will launch in coming weeks

The federal government announced increased funding to 

  • the Youth Employment and Skills Strategy programs to help students find employment and develop job skills over the summer; and

  • student financial assistance programs to increase the number of students qualifying for financial supports in 2020-21 double the non-repayable Canada Student Grants for eligible students.

We Are Here to Help

If you have any questions about any of the COVID-19 relief programs announced by the Government of Canada, Manning Elliott is here to help. To assist business owners in navigating through these trying times, visit our blog to stay up to date on the most recent activity related to COVID-19. 

1CRA has provided that employment or self-employment income can include non-eligible dividends. 

The above content is believed to be accurate as of the date of posting. Canadian tax laws are complex and are subject to frequent changes. Professional tax advice should be sought before implementing any tax planning. Manning Elliott LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained herein.