UPDATE October 20, 2020 – New relief grant for small businesses.
The federal government is investing $12 million into the Canada United Small Business Relief Fund (CUSBRF), to support small businesses through the coronavirus pandemic. The CUSBRF provides eligible small businesses with relief grants of up to $5,000, to be used for pandemic recovery efforts. The grant provides a reimbursement of costs incurred in order to allow a safe reopening and the adoption of digital technologies, in relation to COVID-19.
The CUSBRF is part of the #CanadaUnited nationwide campaign, which encourages Canadians to support local businesses by buying, dining and shopping local. The CUSBRF will be managed by the Ontario Chamber of Commerce, on behalf of the national Chamber network in support of other chambers and partners. Applicants for the relief grant do not need to be members of the Ontario Chamber of Commerce (OCC).
Qualifying entities include small to medium-sized (SME) companies from any sector and from all regions of Canada who meet the eligibility criteria. Both for-profit and not-for-profit organizations are eligible to apply, although government organizations, municipalities, charities and the chamber of commerce network are not eligible. Considerations will be made to ensure the fund is distributed broadly, to all Canadian regions. Priority applicants for consideration will include businesses owned by Indigenous Peoples, women, visible minorities, LGBTQ2+ and persons with disabilities.
Expenses eligible for reimbursement fall under the following 3 categories:
- Purchasing personal protective equipment such as masks, face shields and latex gloves
- Renovating physical spaces to adhere to local, provincial or federal reopening guidelines
- Developing or improving e-commerce capabilities for your business (including enhancements of websites)
For more information on eligible and ineligible expenses, click here.
Eligible expenses directly related to the above categories are permitted provided that purchases were made no earlier than March 15, 2020. All eligible expenses must be incremental and a direct result of adjusting operations for pandemic safety guidelines. Normal or usual ongoing business costs are not eligible.
Eligibility Criteria Include:
- Must be incorporated, or operating as a sole proprietor/partnership in Canada, as of March 1, 2020
- Must have less than 75 employees
- Annual sales are at minimum $150,000 and not more than $3,000,000
- Must have $1,000,000 of commercial general liability insurance
- Must not be receiving other contributions from public funds toward the specific activities contained in the application
- Must be in full compliance with all applicable government laws, rules, regulations and guidelines
- Must be in operation after September 1, 2020
The new application window will open on Monday, October 26, 2020. Applications can be submitted at the following website, by clicking on the link related to the province in which your business is located. The application can be accessed by clicking on the application link located on your participating local or provincial Chamber of Commerce site. Only one application per ownership group can be submitted.
Applicants will be required to describe the reason they are applying to the program and explain the impact COVID-19 has had on operations, including the possible economic hardship, temporary closure, etc. Further, applicants must attach all necessary receipts and invoices, accompanied with proof of payment to their application. Applicants must also submit the company’s sales tax (GST/HST) registration document or a recent sales tax (GST/HST) filing and one of the following documents:
- Proof of business registration
- Business license
- Articles of incorporation or letters patent
- For partnerships: articles of incorporation or letters patent for each corporate partner
These documents must show official stamp, logo or other official identifying details from the issuing agency.
UPDATE October 9, 2020 – Government announces new, targeted support to help businesses through pandemic.
The Government of Canada announced its intention to introduce new, targeted supports to help hard-hit businesses and other organizations experiencing a drop in revenue. The government plans to introduce legislation to provide new and expanded support, including:
Canada Emergency Rent Subsidy
- The new Canada Emergency Rent Subsidy (CERS), which would provide rent and mortgage support until June 2021 for qualifying organizations affected by COVID-19.
- The rent subsidy would be provided directly to tenants, while also providing support to property owners.
- The new rent subsidy would support businesses, charities, and non-profits that have suffered a revenue drop, by subsidizing a percentage of their expenses, on a sliding scale, up to a maximum of 65% of eligible expenses until December 19, 2020.
- Organizations would be able to make claims retroactively for the period that began September 27 and ends October 24, 2020.
- A top-up CERS of 25% for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65% subsidy.
Canada Emergency Wage Subsidy
- The extension of the Canada Emergency Wage Subsidy (CEWS) until June 2021.
- The subsidy would remain at the current, period 8, subsidy rate of up to a maximum of 65% of eligible wages until December 19, 2020. The maximum was previously set to reduce to 45% for period 9.
Canada Emergency Business Account
- An expanded Canada Emergency Business Account (CEBA), which would enable businesses, and not-for-profits eligible for CEBA loans—and that continue to be seriously impacted by the pandemic—to access an interest-free loan of up to $20,000, in addition to the original CEBA loan of $40,000.
- Half of this additional financing would be forgivable if repaid by December 31, 2022.
- Additionally, the application deadline for CEBA is being extended to December 31, 2020.
- Further details, including the launch date and the application process will be announced in the coming days. An attestation of the impact of COVID-19 on the business will be required to access the additional financing.
UPDATE October 9, 2020 – Ontario imposes stricter temporary measures in Ottawa, Toronto, and Peel Region.
Ontario is tightening restrictions in three major areas including Toronto, Peel Region and Ottawa in an effort to curb the spread of COVID-19. The modified Stage 2 restrictions go into effect Saturday, October 10, for a period of 28 days, and include:
- Closure of:
- indoor dining at restaurants and bars
- movie theatres
- performing arts
- racing venues
- Personal care services where masks must be removed are prohibited, as are team sports games and scrimmages;
- Capacity limits are reduced to 10 people indoors for tours, real estate open houses and meeting and event spaces. Physical distancing must be maintained; and
- Wedding receptions will be limited to 10 people indoors or 25 people outdoors effective 12:01 a.m. on Oct. 13.
The government is also asking people in these areas to leave their homes only for essential purposes. Travel to other regions in the provinces should also be limited. Schools and child-care centres will remain open as part of the plan.
The government announced $300 million to support businesses amid the closures.
UPDATE October 2, 2020 – Legislation to support Canadians through new Recovery Benefits has passed.
On October 2, Royal Assent was received for Bill C-4, which enacts the Canada Recovery Benefit (CRB), the Canada Recovery Caregiving Benefit (CRCB), and the Canada Recovery Sickness Benefit (CRSB). A new web page has been launched to provide instructions for transferring from CERB to EI or other benefits.
UPDATE September 25, 2020 – The government is proposing to extend the current treatment of furloughed employees under the wage subsidy program.
The Minister of Finance is proposing to extend the current treatment of furloughed employees under the wage subsidy program for the upcoming four-week period, from September 27 to October 24, 2020.
This means employers who qualify for the wage subsidy would be able to continue to claim up to a maximum benefit of $847 per week per employee, to support remuneration of their furloughed workers until October 24, 2020.
For the following periods, the government will review the wage subsidy program in light of ongoing progress in fighting COVID-19 as well as any adjustments needed to facilitate the extension of the wage subsidy into 2021, as committed in the Speech from the Throne.
UPDATE September 24, 2020 – The government introduces legislation to support Canadians through Recovery Benefits.
On September 24, the government announced the introduction of Bill C-2, to create three new temporary Recovery Benefits to support Canadians unable to work for reasons related to COVID-19. The details were originally announced on August 20. The legislation differs slightly from the original announcement, in particular, the payments under the Canada Recovery Benefit increased from $400 per week to $500 per week. The EI weekly minimum also increased from $400 per week to $500 per week.
Subject to this legislation receiving Royal Assent, the new benefits would provide income support to Canadians and specifically, the legislation includes:
- A Canada Recovery Benefit (CRB) of $500 per week for up to 26 weeks, to workers who are self-employed or are not eligible for EI and who still require income support. This Benefit would support Canadians who have not returned to work due to COVID-19 or whose income has dropped by at least 50%. These workers must be available and looking for work, and must accept work where it is reasonable to do so;
- A Canada Recovery Sickness Benefit (CRSB) of $500 per week for up to two weeks, for workers who are sick or must self-isolate for reasons related to COVID-19. This Benefit supports our commitment to ensure all Canadian workers have access to paid sick leave; and
- A Canada Recovery Caregiving Benefit (CRCB) of $500 per week for up to 26 weeks per household, for eligible Canadians unable to work because they must care for a child under the age of 12 or a family member because schools, day-cares or care facilities are closed due to COVID-19, or because the child or family member is sick and/or required to quarantine.
Canadians will be able to apply for the CRB, CRSB, and CRCB through the Canada Revenue Agency (CRA) for one year up until September 25, 2021.
As announced on August 20, temporary measures to help Canadians access EI benefits more easily are effective September 27, 2020, for one year. These changes will also establish a minimum weekly benefit rate of $500 for new EI recipients, at the same level as the CRB.
More detailed eligibility criteria can be found here.
For further details, also see our article.
UPDATE September 23, 2020 – The Honourable Governor General delivered the Speech from the Throne.
During the Throne Speech, the Honourable Governor General announced several measures aimed at alleviating some of the hardships Canadians are experiencing with respect to the pandemic. This article outlines a select set of economic measures pertaining to individuals and businesses that may be of interest to you.
The government’s approach to meet the challenges Canadians are faced with has four foundations; Protecting Canadians from COVID-19, Helping Canadians Through the Pandemic, Building Back Better – A resiliency agenda for the middle class, and Canada We Are Fighting For.
Protecting Canadians from COVID-19
• Canada Emergency Wage Subsidy (CEWS) will be extended through to the next summer 2021.
• Canada Emergency Business Account (CEBA) will be expanded.
• Business Credit Availability Program (BCAP) will be increased.
• The EI system will become the sole delivery mechanism for employment benefits, including for Canadians who did not qualify for EI prior to the pandemic.
• A campaign to create 1 million jobs will be launched, including direct investment, immediate training and incentives for employers to hire.
• The stock option deduction will be limited for wealthy individuals at large, established corporations.
• Corporate tax avoidance by digital giants will be addressed by the government.
• Special sectors such as travel and tourism, hospitality and cultural industries like the performing arts will be supported.
Building back better – A resiliency agenda for the middle class
• The First-Time Home Buyer Incentive will be enhanced.
• Old Age Security (OAS) will be increased once individuals reach the age of 75. Higher Canada Pension Plan (CPP) survivor benefits will become available.
• Automatic tax filing for simple returns will be implemented.
• The corporate tax rate will be cut in half for certain clean energy generation industries.
• A Disability Inclusion Plan will be brought forward:
• A new Canadian Disability Benefit will be modelled after the Guaranteed Income Supplement for seniors;
• A robust employment strategy for Canadians with disabilities will be introduced; and
• A better process to determine eligibility for government disability programs and benefits will be implemented.
The government will release an update to Canada’s COVID-19 Economic Response Plan later this fall. This update will outline the government’s economic and fiscal position, provide fiscal projections and set out new measures to implement the items in this Throne Speech.
For a full text of the government’s speech and other significant measures within all the foundations, see the following link: https://bit.ly/32VT3rk
UPDATE September 11, 2020 – The Canada Revenue Agency has extended the SR&ED deadlines.
Under the Time Limits and Other Periods Act (COVID-19), the Canada Revenue Agency has received a ministerial order to extend certain deadlines imposed under the Income Tax Act. Some reporting deadlines for scientific research and experimental development (SR&ED) claims have been extended as shown below.
The SR&ED reporting deadlines affected by this ministerial order include any that occurred on or after March 13, 2020. No SR&ED reporting deadlines are extended past December 31, 2020.
Corporations have been extended by six months or to December 31, 2020, whichever date comes first. Corporations with tax year ends from September 13, 2018, to December 31, 2018, that had an SR&ED reporting deadline from March 13, 2020, to June 30, 2020, are extended by six months. Corporations with tax year-ends from January 1, 2019, and to June 29, 2019, that would usually have an SR&ED reporting deadline from July 1, 2020, to December 29, 2020, are extended to December 31, 2020.
Individuals have been extended by six months to December 15, 2020. This only applies to individuals who operated a sole proprietorship with a December 31, 2018, tax year-end and who had an SR&ED reporting deadline of June 15, 2020.
Trusts have been extended by six months or to December 31, 2020, whichever date comes first. Trusts with tax year-ends from December 13, 2018, to April 1, 2019, that would usually have an SR&ED reporting deadline from March 13, 2020, to June 30, 2020, are extended by six months. Trusts with tax year-ends of April 2, 2019, to October 1, 2019, that would usually have an SR&ED reporting deadline of July 1, 2020, to December 30, 2020, are extended to December 31, 2020.
Your usual SR&ED reporting deadline
To determine your usual SR&ED reporting deadline, see section 6.0 of the SR&ED Filing Requirements Policy.
To avoid interest and penalties, you must file your tax return by the filing due date. If you are making an SR&ED claim, we encourage you to include it with this filing, even though the usual SR&ED reporting deadline is 12 months after the tax return filing due date.
For more information, see the following link.
UPDATE September 8, 2020 – The government announces an extension to the Canada Emergency Commercial Rent Assistance program for Small Businesses.
Today, the government announced that the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses will be extended by one month to help eligible small businesses pay rent for September. All provinces and territories continue to participate in this initiative and collaborate with the federal government, to provide rent supports to those small businesses most in need. Current CECRA application deadlines will also be extended to accommodate this extension.
Across the country, thousands of small businesses that were forced to close or were especially hard hit have been able to use CECRA to help cover rent and position themselves to reopen as the economy reopens. As of September 7, 2020, over 106,000 small business tenants have been supported, representing 994,000 employees, for a total of over $1.32 billion in rent support.
Property owners are encouraged to continue to make use of CECRA for eligible tenants and to work to provide flexibility where possible to their tenants as they recover from the crisis. The federal government also continues to support the provincial banning of commercial evictions during the pandemic.
This will be the final extension to CECRA, as the government explores other options to support small businesses facing the challenges of the COVID-19 pandemic — including the challenges of fixed costs at a time when health concerns and precautions prevent many businesses from operating at full capacity. The federal government will continue to ensure Canadian small businesses have the support they need.
UPDATE September 3, 2020 – Canada Revenue Agency increases flat rate amount for meal claims, and reasonable amount for meal benefits and allowances.
Today, the Minister of Transport announced that the Canada Revenue Agency (CRA) has increased the amount that employers can use to determine whether an overtime meal or allowance, or the meal portion of a travel allowance is taxable, from $17 to $23. The CRA has also increased the rate at which transport employees and other individuals can claim meal expenses, using the simplified method (a flat rate per person), from $17 to $23 per meal. These increases are effective immediately and retroactive to January 1, 2020.
Since the beginning of the pandemic, essential workers across Canada have been working tirelessly to ensure Canadians are kept safe while still having access to goods and services they require. Increasing the amount for meal claims and meal benefits or allowances ensures that all employees, including our essential workers, can access meals that meet today’s inflation as they continue to provide services that support Canadians through this pandemic.
The CRA’s policies on taxable benefits and allowances allows an employer to exclude the value of an overtime meal or allowance, or certain travel allowances (including a meal portion), from an employee’s income as long as the value is reasonable (in addition to other conditions). If all the conditions are met, the employer does not need to report the value of the meal or allowance on the employee’s T4 slip.
When claiming meal expenses on a personal income tax and benefit return, the CRA allows transport employees, and individuals claiming moving expenses, medical expenses, or the northern residents deduction, to calculate their meal expenses claim using the simplified method. This method is the easiest way to calculate meal expenses, as it is based on a flat rate and individuals do not have to keep receipts for their meals.
The $17 value in these policies was last updated in 2009. These increases provide more flexibility and now accurately represent the average cost of a meal today, ensuring Canadian taxpayers can benefit from of their meal benefit, allowance or claim fully.
More information on the increased amounts and how they impact employers and/or employees, will be made available in the coming weeks, including in the following publications:
Guide T4130, Employer’s Guide – Taxable Benefits and Allowances – for information on calculating taxable benefits and allowances for overtime meals or allowances, or travel allowances. Employers may also use this guide for instructions on how to report these benefits or allowances on their employee’s T4 slips.
Guide T4044, Employment Expenses – for information on the simplified method for claiming meal expenses.
UPDATE September 3, 2020 – The government announces over 1,000 new projects in support of seniors impacted by COVID-19.
As seniors ensure their safety by staying home during the COVID-19 pandemic, it is critical to provide additional support to them and reduce their social isolation, which can take a toll on their mental health.
Today, the government announced over 1,000 new projects delivered by community organizations across the country to support seniors during the pandemic. These projects are funded through an investment of $20 million in funding through the New Horizons for Seniors Program (NHSP).
Organizations will receive up to $25,000 in funding to offer immediate COVID-19 relief or recovery activities to seniors. The projects will include:
- promoting computer literacy and virtual activities, such as exercise classes among seniors;
- supporting the delivery of food and medication or personalized monitoring of seniors by phone or videoconference;
- assisting seniors with essential activities, such as visits to the doctor;
- hiring staff to replace a loss of volunteerism capacity due to the outbreak;
- providing information to seniors regarding how to care for themselves in light of experiences relating to the pandemic; and
- providing training on disease prevention and use of personal protective equipment.
Shubh Helping Hands in Missisauga, Ontario will receive $25,000 to design and facilitate physical distancing activities through virtual meetings including dance, exercise, yoga, and supportive educational training such as using personal protective equipment and supporting mental health in relation to COVID-19 isolation.
These additional projects will help ensure more communities will be able to reduce seniors’ isolation, improve their quality of life and help them maintain a social support network.
UPDATE August 31, 2020 – The application deadline for the Canada Emergency Business Account has been extended.
The government has announced that the application deadline for the Canada Emergency Business Account has been extended to October 31, 2020. In addition, the government is exploring ways to make the program available to those with qualifying payroll or non-deferrable expenses, who have not been able to apply as a result of operating from a business banking account. Further details regarding these changes will be released in the coming days and will include information about a new business account opening process, through which qualifying businesses will be able to apply.
UPDATE August 27, 2020 – The government announces new T4 filing requirements for the 2020 tax year.
The Canada Revenue Agency (CRA) will be introducing additional reporting for the T4 slip, Statement of Remuneration Paid, for the 2020 tax year. Additional reporting requirements will apply to all employers and will help the CRA validate payments under the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB).
In addition to reporting employment income in Box 14 or Code 71, use the new information codes below when reporting employment income and retroactive payments in the following periods for the 2020 tax year:
• Code 57: Employment income – March 15 to May 9
• Code 58: Employment income – May 10 to July 4
• Code 59: Employment income – July 5 to August 29
• Code 60: Employment income – August 30 to September 26
Eligibility criteria for the CERB, CEWS, and CESB is based on employment income for a defined period. The new requirement means employers should report income and any retroactive payments made during these periods. For example, if you are reporting employment income for the period of April 25 to May 8, payable on May 14, use code 58.
UPDATE August 26, 2020 – The Government of Canada announces the opening of a Canada Emergency Business Account call centre.
If you have applied for Canada Emergency Business Account (CEBA) and have questions, please contact the new CEBA Call Centre at 1-888-324-4201 to receive a status update on your CEBA application. The CEBA call centre is open Monday to Friday from 8:00 am to 9:00 pm EST and can address the following types of questions:
What is the status of my application?
Why was my application declined?
Why was my submitted document rejected?
UPDATE August 24, 2020 – The government announces a four-week extension to the Canada Emergency Wage Subsidy for furloughed employees.
The Canada Emergency Wage Subsidy (CEWS) has supported more than 3 million Canadians since the beginning of the pandemic and provided support to businesses so they can keep workers, including furloughed workers, on their payroll.
To help support workers and provide certainty for employers, Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, announced that the government proposes to extend the current treatment of furloughed employees under the CEWS program by 4 weeks (from August 30 to September 26). This would mean employers who qualify for the CEWS program would be able to continue to claim up to a maximum benefit of $847 per week to support remuneration for each of their furloughed workers. Further details about the calculation of CEWS for furloughed workers for remaining periods of the program will be announced in the coming weeks.
UPDATE August 20, 2020 – The government provides details on the transition out of Canada Emergency Response Benefit into a simplified and enhanced EI program and into new benefit programs.
The government has announced new measures to support Canadian workers through the next phase of recovery. The Canada Emergency Response Benefit (CERB) is a temporary response benefit to support Canadians who had to stop working due to the pandemic. The Government will be transitioning to a simplified Employment Insurance (EI) program, effective September 27, 2020, to provide income support to those who remain unable to work and are eligible, and introducing a new suite of temporary and taxable recovery benefits to further support workers. For further details, see the following article.
UPDATE August 17, 2020 – The Canada Revenue Agency temporarily shuts down its online services after cyberattacks compromised thousands of accounts.
The Canada Revenue Agency (CRA) has temporarily shut down its online services after being targeted by three cyberattacks that compromised thousands of accounts linked to these services. The agency has confirmed that approximately 9,000 accounts have been affected by the separate attacks. Although the security breaches have been contained, services connected to My Account on the CRA website have been disabled as an additional safety measure.
Individuals attempting to apply for emergency COVID-19 benefits, such as the Canada Emergency Response Benefit (CERB) or the Canada Emergency Student Benefit (CESB), will be unable to do so until further notice. Annette Butikofer, Chief Information Officer at CRA, has stated that CRA hopes to have its online services for individuals back up and running by mid-week. CRA also temporarily cut off access to its My Business Account and Represent a Client this Sunday, although Butikofer has confirmed My Business Account is back online with additional safety measures, so employers can apply for the 5th period of the emergency wage subsidy.
Over the last few weeks, Canadians began to report that email addresses associated with their CRA accounts were changed, their direct deposit information had been altered and CERB payments had been issued in their name, even though they had not applied for the benefit.
“The CRA quickly identified the impacted accounts and disabled access to these accounts to ensure the safety and security of the taxpayer’s information,” CRA spokesperson Christopher Doody wrote in an email. “The CRA is continuing to analyze both incidents. Law enforcement assistance has been requested from RCMP and an investigation has been initiated.”
Marc Brouillard, Acting Chief Information Officer for the Treasury Board of Canada stated that these incidents are known as “credential stuffing”. He further explained, “These attacks, which used passwords and usernames collected from previous hacks of accounts worldwide, took advantage of the fact that many people reuse passwords and usernames across multiple accounts.”
The CRA will send letters to those affected by the incidents, explaining how to confirm their identities and reclaim control of their accounts. Individuals phoning the agency may select the “report suspected fraud or identity theft” option to speak with a representative more promptly. Canada’s cyber intelligence agency recommends that anyone affected by the breach update their passwords immediately and choose a password they have not used in the past and will not use for any other account.
UPDATE August 17, 2020 – The Government of Canada has made significant changes to the Canada Emergency Wage Subsidy program for claim period 5 and onward.
Applications for the Canada Emergency Wage Subsidy (CEWS) claim period 5 (July 5 to August 1) open as of today. The significant changes to the CEWS program announced on July 17 and enacted into legislation on July 27, 2020, apply to claim period 5 and onward.
Changes to CEWS as of claim period 5 include:
- the subsidy rate varies, depending on how much your revenue dropped
- the subsidy rate is made up of two parts: a base subsidy rate and a top-up subsidy rate
- if your revenue drop was less than 30% you can still qualify, and keep getting the subsidy as employees return to work and your revenue recovers
- employers who were hardest hit over a period of three months get a higher amount
- employees who were unpaid for 14 or more days can now be included in your calculation
- use the current period’s revenue drop or the previous period’s, whichever works in your favour
- for periods 5 and 6, if your revenue dropped at least 30%, your subsidy rate will be at least 75%
- even if your revenue has not dropped for the claim period, you can still qualify if your average revenue over the previous three months dropped more than 50%
- the maximum base subsidy rate is 60% in claim periods 5 and 6
- the maximum base subsidy rate will begin to decline in claim period 7, gradually reducing to 20% in period 9
CRA has released new and updated guidance and tools for the application for CEWS for periods 5 and onwards, including updated FAQs, online step by step description, and a new calculator. Visit the CRA website and our COVID HUB for more information.
UPDATE July 31, 2020 – The Government of Canada has further extended the Canada Emergency Commercial Rent Assistance program.
The Canada Emergency Commercial Rent Assistance (CECRA) program has been further prolonged by one month, through to the end of August.
Those who qualified for CECRA for small businesses based on existing program parameters will be able to apply for the additional 1 month based on having a 70% revenue decline for April, May and June (for example, without reassessing whether they continue to have a 70% revenue decline in August). Participation in the one-month extension is voluntary. Both existing applicants to CECRA for small businesses and new applicants are able to apply for the August rent reduction.
UPDATE July 27, 2020 – The Canada Revenue Agency announces an extension to the payment deadline and offers interest relief on outstanding tax debts.
In addition to measures already announced, the CRA is extending the payment deadline and applying relief to interest on existing debt.
The CRA is extending the payment due date for current year individual, corporate and trust income tax returns, including instalment payments, from September 1, 2020, to September 30, 2020. Penalties and interest will not be charged if payments are made by the extended deadline of September 30, 2020. This includes the late-filing penalty as long as the return is filed by September 30, 2020.
The CRA is also waiving interest on existing tax debts related to individual, corporate and trust income tax returns from April 1, 2020, to September 30, 2020 and from April 1, 2020, to June 30, 2020, for goods and services tax/harmonized sales tax (GST/HST) returns.
The previously extended filing due dates for individual, corporate and trust income tax returns remain unchanged. However, the CRA will not impose late-filing penalties where a current year individual, corporation, or trust return is filed late provided that it is filed by September 30, 2020.
To ensure Canadians continue to receive their benefits and credits during the COVID-19 pandemic, the CRA temporarily suspended interruptions for those who were unable to file their income tax and benefit returns by the June 1 deadline. Currently, if a 2019 individual tax return has not been assessed, the CRA is calculating benefits and/or credits for the July to September 2020 payments based on information from 2018 tax returns. However, if 2019 individual tax returns are not received and assessed by early September 2020, estimated benefits and/or credits will stop in October 2020 and individuals may have to repay the amounts that were issued as of July 2020.
UPDATE July 27, 2020 – The 10% Temporary Wage Subsidy reporting feature now available.
After the eligibility period of the 10% Temporary Wage Subsidy (TWS) program ended on June 19, 2020, eligible employers are required to complete a self-identification form for each payroll program account, where remittances were reduced by an amount of the subsidy.
This self-identification form is now available for reporting. The reporting of the 10% wage subsidy claim and related election is now available through “Represent a Client” and “My Business Account”. Reporting can be done in the Payroll section by selecting “10% Temporary Wage Subsidy”.
Eligible employers who did not reduce their remittances must also complete this form, to allow the CRA to credit their payroll program account by the amount of the subsidy that they are eligible for.
If you elected for the 10% Temporary Wage Subsidy for Employers to be equal to a lower percentage of the remuneration you paid, you must indicate on your self-identification form that you reduced your remittances by a lower amount than what you were entitled to. If you fail to do so, you will be credited for the entire 10% subsidy and your CEWS claim may be reduced and recovered if necessary.
The CRA will use the information reported to reconcile the subsidy with your payroll program account. If you have a credit in your payroll program account after the subsidy is applied and your account is reconciled, the CRA will pay the amount to you or transfer it to your next year’s remittance.
UPDATE July 27, 2020 – The Canada Revenue Agency is experiencing processing delays.
CRA is experiencing delays in processing paper income tax and benefit returns.
CRA advises taxpayers to:
- file your 2019 taxes online as soon as possible and register for direct deposit to get refunds faster and avoid interruptions to benefit and credit payments.
- submit your requests for changes electronically, using Change My Return in My Account or ReFILE. If you have already submitted a request to change your return by mail that has not been processed yet, you may be able to submit it again electronically.
Temporary measure for paper returns
If you have already filed a 2019 paper return that has not been processed yet, you can file it again online using NETFILE certified tax software. This does not include returns that the software says must be paper-filed or returns that are excluded from electronic filing.
UPDATE July 24, 2020 – Additional guidance has been issued for Canada Emergency Business Account eligibility.
The Canada Emergency Business Account (CEBA) program was first made available for eligible entities that had total employment income paid in the 2019 calendar year between $20,000 and $1,500,000. Later, the program was expanded to include eligible entities with $20,000 or less in total employment income paid in the 2019 calendar year, provided these entities meet additional conditions; among them is that they have Eligible Non-Deferrable Expenses between $40,000 and $1,500,000. Additional guidance regarding the calculation of Eligible Non-Deferrable Expenses has recently been released.
An eligible entity’s total incurred and projected Eligible Non-Deferrable Expenses, used to determine whether such expenses are between $40,000 and $1.5 million, are measured as they stood on March 1, 2020. Under all expense categories, the amounts to be included in the total are those actually paid in January and February 2020, as well as those for which a legal or contractual obligation existed on March 1, 2020, for the applicant to pay the expense within the remainder of 2020 and which cannot be avoided or deferred beyond 2020, even during a period of shut down and depressed revenues as a result of COVID. For periodic or indefinite contracts that renew or continue with the passage of time absent intervention by the parties, such as a monthly phone contract, assume that the contract continues on the same terms beyond March 1 such that payments related to the later periods in 2020 are included as obligations provided for in contract as at March 1.
For example, assume your business signed an insurance policy on February 1, 2020. As at March 1, the business had paid the monthly insurance expense for February and a contractual obligation then existed providing for payments of the expense for the subsequent months of 2020. All 11 monthly insurance payments would be included in the total Eligible Non-Deferrable Expenses.
CEBA is intended to support businesses by providing financing for their expenses that cannot be avoided or deferred as they take steps to safely navigate a period of shutdown, thereby helping to position businesses for successful relaunch when the economy reopens.
For more information, visit our COVID-19 Hub.
UPDATE July 17, 2020 – The Government of Canada releases details on the redesigned Canada Emergency Wage Subsidy program.
The government has announced proposed changes to the CEWS that would broaden the reach of the program and help provide better targeted support. The draft legislative proposals would allow the extension of the CEWS until December 19, 2020, including redesigned CEWS program details until November 21, 2020.
The changes outlined in the draft legislative proposals would apply to Period 5 (beginning July 5) and subsequent periods. The same eligibility criteria for the initial three claim periods (March 15 to June 6, 2020) would continue to apply for Period 4 (June 7 to July 4, 2020). Effective July 5, 2020, the CEWS would consist of two parts:
- a base subsidy available to all eligible employers that are experiencing a decline in revenues, with the subsidy amount varying depending on the scale of revenue decline; and
- a top-up subsidy of up to an additional 25 per cent for those employers that have been most adversely affected by the COVID-19 crisis.
The two-part CEWS would apply with respect to the remuneration of active employees. A separate CEWS rate structure would apply to furloughed employees (as described further below). In addition, a safe harbour would be available to ensure that, through August 29 (periods 5 and 6), employers would have access to a CEWS rate that is at least as generous as they would have had under the initial CEWS structure, as described further below (see Safe harbour rule for Periods 5 and 6).
Base Subsidy for All Employers Impacted by the Crisis
The base CEWS amount for active employees would be a specified rate, applied to the amount of remuneration paid to the employee for the eligibility period, on remuneration of up to $1,129 per week. The rate of the base CEWS would now vary depending on the level of revenue decline, and its application would be extended to employers with a revenue decline of less than 30 per cent (see Table 1). This expansion would mean that all eligible employers with a revenue decline would now qualify for CEWS support.
The specified rate would be determined based on the change in an eligible employer’s monthly revenues, as described further below (see Reference Periods for the Drop-in-Revenues Test).
The maximum base CEWS rate would be provided to employers with a revenue drop of 50 per cent or more. Employers with a revenue drop of less than 50 per cent would be eligible for a lower base CEWS rate, as shown in Table 1. The maximum base CEWS rate would be gradually reduced from 60 per cent in Periods 5 and 6 (July 5 to August 29) to 20 per cent in Period 9 (October 25 to November 21).
Table 1 – Rate Structure of the Base CEWS
Top-up Subsidy for the Most Adversely Affected Employers
A top-up CEWS of up to 25 per cent would be available to employers that were the most adversely impacted by the pandemic. Generally, an eligible employer’s top-up CEWS would be determined based on the revenue drop experienced when comparing revenues in the preceding 3 months to the same months in the prior year. Under the alternative approach to the calculation of baseline revenues, an eligible employer’s top-up CEWS would be determined based on the revenue drop experienced when comparing average monthly revenue in the preceding 3 months to the average monthly revenue in January and February 2020.
Employers that have experienced a 3-month average revenue drop of more than 50 per cent would receive a top-up CEWS rate equal to 1.25 times the average revenue drop that exceeds 50 per cent, up to a maximum top-up CEWS rate of 25 per cent, which is attained at a 70‑per‑cent revenue decline. As with the base CEWS rate, the top-up CEWS rate would apply to remuneration of up to $1,129 per week. The top-up CEWS rate for selected average revenue drop levels is illustrated in Table 2 below.
Table 2 – Top-up CEWS Rates for Selected Levels of Average Revenue Drop Over the Preceding Three Months
The overall CEWS rate would be equal to the top-up CEWS rate plus the base CEWS rate. Table 3 shows the combined base and top-up CEWS rates for Periods 5 to 9 for the most adversely affected employers.
Table 3 – Rate Structure of the Combined Base CEWS and the Top-up CEWS for the Most Affected Employers (those that experienced an average revenue drop of 70% or more in the preceding 3 months)
Table 4 illustrates the interaction of the 3-month drop in revenue test for the top-up CEWS and the month-over-month revenue test for the base CEWS for Periods 5 and 6. For example, an employer that is recovering with a revenue drop of 20 per cent in Period 5 and a preceding 3-month average revenue drop of 60 per cent would benefit from a base CEWS rate of 24 per cent and a top-up CEWS rate of 12.5 per cent, which would provide a combined CEWS rate of 36.5 per cent.
Table 4 – Rate Structure of the Combined Base CEWS and the Top-up CEWS for Periods 5 and 6* Average Revenue Drop in the Preceding 3 Months
Safe Harbour Rule for Periods 5 and 6
For Periods 5 and 6, an eligible employer would be entitled to a CEWS rate not lower than the rate that they would be entitled to if their entitlement were calculated under the CEWS rules that were in place for Periods 1 to 4. This means that in Periods 5 and 6, an eligible employer with a revenue decline of 30 per cent or more in the relevant reference period would receive a CEWS rate of at least 75 per cent or potentially an even higher CEWS rate using the new rules outlined above for the most adversely affected employers (up to 85 per cent).
CEWS for Furloughed Employees
For Periods 5 and 6, the subsidy calculation for a furloughed employee would remain the same as for Periods 1 to 4. It would be the greater of:
- For arm’s-length employees, 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
- 75 per cent of the employee’s pre-crisis weekly remuneration up to a maximum benefit of $847 per week or the amount of remuneration paid, whichever is less.
Beginning in Period 7, CEWS support for furloughed employees would be adjusted to align with the benefits provided through the Canada Emergency Response Benefit (CERB) and/or Employment Insurance (EI). This would ensure equitable treatment of employees on furlough between both programs, provide greater clarity to workers as to their compensation as compared to a changing subsidy rate based on their employer’s revenue in a given month and, when combined with draftlegislative changes to the interaction with the CERB (i.e., the elimination of the 14-days rule, as discussed below), make it easier to transition employees on to CEWS so that they are reconnected with their employer.
For Period 5 and subsequent periods, the CEWS for furloughed employees would be available to eligible employers that qualify for either the base rate or the top-up for active employees in the relevant period.
The employer portion of contributions in respect of the Canada Pension Plan, Employment Insurance, the Quebec Pension Plan, and the Quebec Parental Insurance Plan in respect of furloughed employees would continue to be refunded to the employer.
No changes are proposed to the definition of eligible remuneration.
For active arm’s-length employees, the amount of remuneration would be based solely on actual remuneration paid for the eligibility period, without reference to the pre-crisis remuneration concept used for earlier CEWS periods. A modified special rule would apply to active employees that do not deal at arm’s length with the employer. For Period 5 and subsequent periods, the wage subsidy for such employees would be based on the employee’s weekly eligible remuneration or pre-crisis remuneration, whichever is less, up to a maximum of $1,129. The subsidy would only be available in respect of non-arm’s-length employees that were employed prior to March 16, 2020.
For Period 4, the pre-crisis remuneration of an employee would be based on the average weekly remuneration paid to the employee from January 1 to March 15, 2020; from March 1, 2019 to May 31, 2019; or from March 1, 2019 to June 30, 2019. For Period 5 and subsequent periods, the pre-crisis remuneration of an employee would be based on the average weekly remuneration paid to the employee from January 1 to March 15, 2020 or from July 1, 2019 to December 31, 2019. In all cases, the calculation of average weekly remuneration would exclude any period of 7 or more consecutive days without remuneration. Employers can choose which period to use on an employee-by-employee basis.
Effective July 5, 2020, the eligibility criteria would no longer exclude employees that are without remuneration in respect of 14 or more consecutive days in an eligibility period.
Calculating Revenues – Reference Periods for the Drop-in-Revenues Test
For the purpose of the base CEWS, eligibility would generally be determined by the change in an eligible employer’s monthly revenues, year-over-year, for the applicable calendar month. Table 5 below outlines each claiming period and the relevant period for determining an eligible employer’s change in revenue. For Period 5 and all subsequent periods, an eligible employer would be able to use the greater of its percentage revenue decline in the current period and that in the previous period for the purpose of determining its qualification for the base CEWS and its base CEWS rate in the current period. This would provide certainty and be a continuation of the rules for Periods 1 to 4 that allowed an employer that met the revenue test in one period to automatically qualify for the following period.
Employers that have elected to use the alternative approach for the first 4 periods would be able to either maintain that election for Period 5 and onward or revert to the general approach. Similarly, employers that have used the general approach for the first 4 periods would be able to either continue with the general approach or elect to use the alternative approach for Period 5 and onward. Whichever approach they choose would apply for Period 5 and onward and would apply to the calculation of the base CEWS and the top-up CEWS. This would provide flexibility for employers to adjust their approach in light of new circumstances they may be experiencing as the CEWS is extended.
Table 5 – Reference Periods for the Base CEWS
Table 6 – Reference Periods for the Top-up CEWS
The government has shared draft legislative proposals to make the changes to the CEWS described in this backgrounder as well as changes in response to feedback received from stakeholders. These proposed changes, which would generally apply as of March 15, 2020, include:
- providing an appeal process based on the existing procedure for notices of determination that allows for an appeal to the Tax Court of Canada;
- providing continuity rules for the calculation of an employer’s drop in revenues in certain circumstances where the employer purchased all or substantially all the assets used in carrying on business by the seller;
- allowing prescribed organizations that are registered charities or non-profit organizations to choose whether to include government-source revenue for the purpose of computing their reductions in qualifying revenue; and
- allowing entities that use the cash method of accounting to elect to use accrual based accounting to compute their revenues for the purpose of the CEWS.
The government is also proposing to move forward with previously released legislative changes, including relieving changes for calculating pre-crisis “baseline” remuneration, for corporations that have amalgamated and for eligible entities that use payroll service providers. The government is also proposing to move forward with the amendment that would align the treatment of trusts and corporations for the purposes of the CEWS. Some of these proposed measures can be found in the May 15, 2020 backgrounder entitled Extending eligibility for the Canada Emergency Wage Subsidy.
Full details of the draft legislative proposals can be found in the Backgrounder.
UPDATE July 17, 2020 – The Government of Canada announces support for persons with disabilities.
Last month, the government announced a series of measures to help Canadians with disabilities navigate the effects of the outbreak, including a one-time, tax-free, non-reportable payment of $600 to assist with additional expenses incurred during the pandemic. The government intends to propose legislation that would make the benefit available to more people and expand the one-time payment to include Canadians with disabilities, who are recipients of any of the following programs or benefits:
- A Disability Tax Credit certificate provided by the Canada Revenue Agency;
- Canada Pension Plan disability benefit or Quebec Pension Plan disability benefit; and
- Disability supports provided by Veterans Affairs Canada.
If the draft legislative proposals are enacted, eligible Canadians would receive the payment automatically. Additionally, Canadians with disabilities who are eligible for the Disability Tax Credit but have not yet applied, would have a 60-day window of opportunity to do so after Royal Assent.
Seniors who are eligible for the one-time payment to persons with disabilities would receive a total of $600 in special payments. The one-time payment to persons with disabilities would be adjusted to provide a top-up for eligible seniors, including:
- $300 for Canadians who are eligible for the Old Age Security pension and who received the
one-time seniors payment of $300; or
- $100 for Canadians who are eligible for the Old Age Security pension and the Guaranteed Income Supplement or Allowances and who received the one-time senior’s payment of $500.
UPDATE July 13, 2020 – The Government of Canada will extend the Canada Emergency Wage Subsidy program until December.
The government has announced it will extend the Canada Emergency Wage Subsidy (CEWS) program until December. This is the second extension of the CEWS program since it was launched. The first extension was for an additional 12 weeks, to August 29. Potential adjustments (including the 30% revenue decline threshold) to the extended program are expected to be made. Further details to come.
UPDATE July 2, 2020 – The Government of Canada introduces draft Regulations Providing Relief for Registered Pension Plans.
Finance Minister Bill Morneau announced the release of draft regulations that would help employers who sponsor a Registered Pension Plan (RPP) or salary deferral leave plan for their employees to manage and maintain their benefit obligations through the crisis. It will also assure employees who participate in salary deferral leave plans that suspending their leave of absence (e.g., via a recall to essential-service work), or deferring their scheduled leave for up to one year, will not put their plan at risk.
The proposed draft regulations would support the effective administration of such plans through the COVID-19 pandemic, providing temporary relief from various registration rules and other conditions that must be complied with under the Income Tax Regulations by:
- adding temporary stop-the-clock rules to the conditions applicable to salary deferral leave plans for the period of March 15, 2020 to April 30, 2021;
- removing restrictions that prohibit an RPP from borrowing money;
- extending the deadline for decisions to retroactively credit pensionable service under a defined benefit plan or to make catch-up contributions to money purchase accounts;
- permitting catch-up contributions to RPPs to be made in 2021 to the extent that 2020 required contributions had been reduced;
- setting aside the 36-month employment condition in the definition “eligible period of reduced pay” for the purpose of using prescribed compensation to determine benefit or contribution levels; and
- allowing wage rollback periods in 2020 to qualify as an eligible period of reduced pay for prescribed compensation purposes.
UPDATE June 28, 2020 – The Government of Canada has extended the Canada Emergency Commercial Rent Assistance program.
The Canada Emergency Commercial Rent Assistance (CECRA) program has been prolonged by one month, through to the end of July.
Those who qualified for CECRA for small businesses based on existing program parameters will be able to apply for the additional 1 month based on having a 70% revenue decline for April, May and June (for example, without reassessing whether they continue to have a 70% revenue decline in July). Participation in the one-month extension is voluntary. Both existing applicants to CECRA for small businesses and new applicants are able to apply for the July rent reduction.
UPDATE June 26, 2020 – Applications are now open for the expanded Canada Emergency Business Account.
Applications are now open for the expanded Canada Emergency Business Account (CEBA) program. This means that more small businesses can access it.
As of June 26, 2020, businesses eligible for CEBA now include owner-operated small businesses that do not have a payroll, sole proprietors receiving business income directly, as well as family-owned corporations remunerating in the form of dividends rather than payroll. Applicants will have to demonstrate having eligible non-deferrable expenses between $40,000 and $1,500,000 in 2020. The expanded CEBA program is being made available gradually by more than 230 financial institutions across the country, starting with the larger banks. Other participating financial institutions will start offering the program over the coming weeks.
UPDATE June 18, 2020 – The Government of Canada has delayed the launch of the Canada Emergency Business Account program.
Finance Minister Bill Morneau has announced that the expanded Canada Emergency Business Account (CEBA) program will no longer launch on June 19th, as previously planned. According to Mr. Morneau, work continues around the clock to ensure the program can securely launch across over 230 financial institutions, and the goal is to launch it as quickly as possible.
UPDATE June 16, 2020 – The Government of Canada has extended the Canada Emergency Response Benefit program for an additional 8 weeks.
The Canada Emergency Response Benefit (CERB) program has been extended by 8 weeks and is now available for a maximum of 24 weeks. You would continue to apply as you have for prior CERB periods, either through CRA if you are not EI eligible, or through Service Canada if you are EI eligible.
Note, the 24 weeks do not have to be taken consecutively. For example, you could receive the CERB benefit for a 4 week period, take a break from the program if you find employment, and then reapply a few months later based on your situation. The 24 week count does not restart each time you reapply for the Canada Emergency Response Benefit after taking a break from the program. If you received 4 weeks of CERB, took a break and then reapplied, you would only have 20 out of the 24 weeks of the CERB program available to you.
UPDATE June 15, 2020 – The Government of Canada has announced that applications for the expanded eligibility Canada Emergency Business Account program will open Friday, June 19, 2020.
The government has provided additional details regarding the expanded eligibility criteria for the Canada Emergency Business Account (CEBA) loan program, which allows an eligible entity with $20,000 or less in total employment income paid in the 2019 calendar year to qualify, if it also meets certain additional conditions.
A new CEBA application stream is available for those that meet the expanded criteria: termed the Non-Deferrable Expense Stream. This stream is for businesses with total employment income paid to employees in 2019 of $20,000 or less and 2020 Eligible Non-Deferrable Expenses (subject to adjustments for support or subsidies under other Government of Canada COVID response programs) greater than $40,000 and less than $1,500,000.
CEBA applications under the 2020 Eligible Non-Deferrable Expenses Stream will follow a two-step process:
Step 1: Businesses will initiate applications directly at their primary financial institution where they hold their primary business chequing / operating account. The financial institution will then direct applicants to Step 2 of the application process.
Step 2: Following the initial application through the financial institution, applicants will be directed to a CEBA website to provide supporting documentation of the 2020 Eligible Non-Deferrable Expenses and to complete the application. Supporting documentation includes electronic or paper copies of receipts / invoices / agreements to be uploaded as evidence of 2020 Eligible Non-Deferrable Expenses.
The Government of Canada will assess application information submitted via financial institutions in Step 1 together with the supporting documentation and information provided in Step 2. If successful, the Government of Canada will notify the financial institution and provide funding for the CEBA loan.
Applications for the expanded eligibility CEBA program open June 19, 2020. If approved, funds can be expected to be received within 10-15 business days after all supporting documentation is received by the Government of Canada.
Visit our COVID-19 Hub for full details.
UPDATE June 11, 2020 – The Government of Canada has provided new details about payments resulting from amended Canada Emergency Wage Subsidy claims and added a new question to the program’s application.
Receiving Funds and Paying Owed Balances Resulting from Amendments to Canada Emergency Wage Subsidy (CEWS) Claims
Based on the CRA’s instructions, when a claimant or advisor selects ‘adjustment to a prior claim’ through My Business Account or Represent a Client, the CEWS interface will show the data originally filed and ask them to enter the amended data, not the adjustment amounts. If the change increases the CEWS amount, the claimant will receive the cash the same way they did when they originally filed. If there is an over-payment, the CRA recommends that the claimant repay the overpaid amount immediately. My Business Account has been updated to allow claimants to ‘view and repay CEWS balance’. The CRA website will soon provide more information regarding other options for CEWS repayments.
Also, the CRA has updated their website with further information about how it plans to review claims that may involve calls or letters from the CRA. The CRA offers advice on how claimants can verify that such CRA calls are legitimate.
Finally, the CRA indicates that any suspected misuse or abuse of the CEWS program can now be reported through the CRA’s Leads program.
A New Question in the CEWS Application: Revenue Calculation Elections
A new question has been added to the application for the second period of the CEWS program (May 10th – June 6th): “Has the employer made one or more elections or choices regarding revenue calculation under subsection 127.5(4) of the CEWS program rules?”
To answer this question, you must first examine whether you have made any of the elections (or choices) listed in Part 2 of the Attestation for owner/managers and/or senior employees form: CEWS Program Rules Elections. If any of the elections apply to you, the answer to the above question should be “yes” and if they do not, the answer should be “no”.
The elections are as follows:
1. joint election, along with each other member of the group that prepares consolidated financial statements, under paragraph 125.7(4)(a) of the Income Tax Act – revenue determined on a non-consolidated basis for members of the employer’s group.
2. a joint election, along with each other member of the affiliated group, under paragraph 125.7(4)(b) of the Income Tax Act – revenue determined on a consolidated basis for the employer’s group.
3. an election under paragraph 125.7(4)(c) of the Income Tax Act – joint venture election.
4. a joint election, along with each person or partnership with which the employer does not deal at arm’s length and from whom the employer earns all or substantially all of its qualifying revenue under paragraph 125.7(4)(d) of the Income Tax Act – non-arm’s length revenue.
5. an election under paragraph 125.7(4)(e) of the Income Tax Act – cash method. If you have chosen to calculate your revenue decrease when compared to a prior period using the cash method, this applies to you.
6. an election under subparagraph (b)(ii) of the definition “prior reference period” in subsection 125.7(1) of the Income Tax Act (prior reference period election). If you have chosen to calculate your revenue decrease by comparing to your average revenue of January 2020 and February 2020, this applies to you.
7. an election under subparagraph (a)(ii) or (b)(ii) of the definition “qualifying revenue” in subsection 125.7(1) of the Income Tax Act – election by registered charity or not-for-profit to exclude government funding. If you are a registered charity or not-for-profit organization and you choose to exclude government funding from your decrease in revenue calculation, this applies to you.
UPDATE June 1, 2020 – The Government of Canada has announced a mechanism to make adjustments to previously filed Canada Emergency Wage Subsidy claims.
The mechanism to make adjustments to your previously filed Canada Emergency Wage Subsidy (CEWS) claim is now available (Note – you cannot correct a CEWS claim by adjusting a subsequent CEWS claim – you need to make an adjustment to the original claim). See below:
To Change a Claim You Submitted
You may request adjustments to applications you have already submitted. To change a previous wage subsidy claim, visit:
If you applied using the Web Forms application and need to change your claim, you may call CRA’s business enquiries phone number.
You will need to make sure you continue to meet eligibility requirements for any updated claims and keep records supporting your wage subsidy claim adjustment.
When completing the adjustment, you will need:
• your payroll program account number (123456789RP0001, for example)
• to know which claim period you are adjusting
• all of the information necessary to change the amount on each line(s) you would like to adjust
Representatives who are changing a claim on behalf of an employer must be authorized at level 2 or 3. You will need to have an updated Attestation for owner/managers and/or senior employees form to support the amended application.
UPDATE May 19, 2020 – The Government of Canada has announced an expansion to the eligibility criteria for the Canada Emergency Business Account.
The Canada Emergency Business Account (CEBA) loans program will be expanded to:
- sole proprietors receiving income directly from their businesses
- businesses that rely on contractors
- family-owned corporations that pay employees through dividends rather than payroll
As well, the government is working on potential solutions to modify CEBA so as to become available to new businesses (those which have never filed a tax return) and businesses which do not have “business accounts” at the bank, but operate through personal accounts.
To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:
- a business operating account at a participating financial institution;
- a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return; and
- eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities and insurance.
More details, including the launch date for applications under the new criteria, will follow in the days to come.
UPDATE May 15, 2020 – The Government of Canada has announced an extension to the Canada Emergency Wage Subsidy.
The Canada Emergency Wage Subsidy (CEWS) program will be extended an additional 12 weeks, to August 29. Further modifications are being considered to make the extended program more widely accessible, including a review of the 30% revenue decline test.
In addition, CEWS eligibility has been extended to the following groups:
- Partnerships that are up to 50% owned by non-eligible members
- Indigenous government-owned corporations that are carrying on a business
- Registered Canadian Amateur Athletic Associations
- Registered Journalism Organizations
- Non-public colleges and schools, including institutions that offer specialized services, such as arts schools, driving schools, language schools and flight schools
As well, the following amendments will be proposed:
- Provide flexibility for employers of existing employees who were not regularly employed in early 2020, such as seasonal employees. This includes a proposal that an option would be added to calculate baseline remuneration as the average weekly remuneration paid to the employee from March 1 to May 31 of 2019;
- Ensure that the CEWS applies appropriately to corporations formed on the amalgamation of two predecessor corporations; and
- Better align the treatment of trusts and corporations for the purpose of determining CEWS eligibility.
Visit our COVID-19 Hub for full details.
UPDATE May 15, 2020 – The government of Canada has opened applications for Canada Emergency Student Benefit.
Applications are open for the the Canada Emergency Student Benefit (CESB), which provides financial support to post-secondary students, and recent post-secondary and high school graduates who are unable to find work due to COVID-19.
Visit our COVID-19 Hub for full details.
UPDATE May 15, 2020 – The government of Canada has announced an extension to certain support benefits and support measures for seniors.
May 15 – GST/HST credit and Canada Child Benefit payments will continue to the end of September even if 2019 returns have not been filed. Payment amounts will be based on information from 2018 tax returns (if the 2019 tax return is not yet assessed). Individuals are encouraged to file returns by June 1, 2020.
May 12 – Additional support for seniors will be made available through a one-time tax-free payment of $300 for seniors eligible for the Old Age Security pension, with an additional $200 for seniors eligible for the Guaranteed Income Supplement (GIS).
GIS and Allowance payments will be temporarily extended if seniors’ 2019 income information has not been assessed. To avoid an interruption in benefits, seniors are encouraged to submit their 2019 income information as soon as possible and no later than by October 1, 2020.
UPDATE May 14, 2020 – The Government of Canada has made updates to the Canada Canada Emergency Rent Assistance Program.
Updated information on the Canada Emergency Commercial Rent Assistance (CECRA) program was released, including who is eligible, how the program will work, information requirements for application, and an FAQ section.
Applications are expected to open in the second half of May. If you intend to apply for the program, you are advised to begin compiling your documents. More program details will be provided soon.
Visit our COVID-19 Hub for full details.
UPDATE May 14, 2020 – The Government of Canada has released details about the Regional Relief and Recovery Fund.
Details were released on nearly $1 billion in funding for regional business relief through the Regional Relief and Recovery Fund (RRRF). Generally, this initiative will provide interest-free loans to businesses not eligible for the Canada Emergency Business Account or other related funding.
The Regional Relief and Recovery Fund helps businesses and organizations continue their operations, including paying their employees. It will also help support projects by businesses, organizations and communities to prepare now for a successful recovery. This initiative, implemented by the six regional development agencies in collaboration with the national network of Community Futures Development Corporations, is targeted to support businesses that are unable to access other government relief measures. The RRRF has two components:
- $675 million to support regional economies, businesses, organizations and communities in regions across Canada
- $287 million to support the national network of Community Futures Development Corporations to provide funding and support to small businesses and the rural communities in which they operate
For more information, follow the links below on the region applicable to you:
UPDATE April 26, 2020 – The Government of Canada has provided further information with respect to the Canada Emergency Wage Subsidy application and the Canada Emergency Commercial Rent Assistance Program.
Release of the Canada Emergency Wage Subsidy Application Guide
A newly released application guide for the Canada Emergency Wage Subsidy (CEWS) is now available. The application guide provides detailed line-by-line instructions on how to apply for the long-awaited subsidy.
As well, a CEWS Frequently Asked Questions update has also been released, answering 35 key questions related to the CEWS program.
Additional Details on the Canada Emergency Commercial Rent Assistance Program
On April 24, Prime Minister Justin Trudeau provided further information with respect to the Canada Emergency Commercial Rent Assistance (CECRA) program.
The federal government has reached an agreement in principle with all provinces and territories to implement the CECRA for small businesses. This program will lower rent by 75% for small businesses that have been affected by COVID-19. Further details on the program are as follows, with additional details expected in mid-May:
- The program will provide forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments that are payable by eligible small business tenants who are 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 term 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.
- Impacted small business tenants are businesses 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.
- This support will also be available to non-profit and charitable organizations.
UPDATE April 22, 2020 – The Government of Canada has provided further guidance with respect to the Canada Emergency Wage Subsidy application and information about new support programs for students.
Preparation for the Canada Emergency Wage Subsidy Application
Registration for the Canada Emergency Wage Subsidy (CEWS) will begin on April 27, 2020. Payments are targeted to begin on May 5.
If you intend to apply for the CEWS, you are advised to follow these important preparatory steps in advance:
- CALCULATE YOUR SUBSIDY AMOUNT: A revised CEWS website and new calculator is now available to help businesses determine the subsidy amount to expect from the CEWS program. If you intend to apply for the CEWS, you are advised to follow the guidance in this calculator.
- SET UP CRA MY BUSINESS ACCOUNT: Eligible employers will be able to apply for the CEWS through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. If you intend to apply for the CEWS, you are advised to ensure your My Business Account is properly set up and your direct deposit information is updated with CRA. For more information on how to do this, refer to our article, Preparation for the Canada Emergency Wage Subsidy Application.
For more information on the CEWS, refer to our updated article, COVID-19 Canada Emergency Wage Subsidy.
New Student Support Programs
On April 22, Prime Minister Justin Trudeau announced $9 billion in additional support programs for post-secondary students and recent graduates. These programs include:
Canada Emergency Student Benefit
The Canada Emergency Student Benefit will provide support to students and new graduates who are not eligible for the Canada Emergency Response Benefit. This benefit will provide $1,250 per month for eligible students or $1,750 per month for eligible students with dependents or disabilities. The benefit will be available from May to August 2020. Eligible students will include those who are post-secondary students right now, going to college in September or who graduated in December 2019. The benefit will be available even if the eligible student was earning up to $1,000 per month. Payments will be delivered through the Canada Revenue Agency.
Canada Student Service Grant
For students who choose to do national service and serve their communities, the new Canada Student Service Grant will provide up to $5,000 for their education in the fall.
Job Creation for Students
Existing federal employment, skills development, and youth programming will be expanded to create up to 116,000 jobs, placements, and other training opportunities to help students find employment and develop valuable skills this summer and over the coming months.
Student Grants and Other Support
- The Canada Student Grant will be doubled for all eligible full-time students, to a maximum of $6,000 and $3,600 for part-time students in 2020-21. The Canada Student Grant for Students with Permanent Disabilities and Students with Dependents would also be doubled.
- Eligibility for student financial assistance will be broadened by removing the expected student’s and spouse’s contributions in 2020-21.
- The Canada Student Loans Program will be enhanced by raising the maximum weekly amount that can be provided to a student in 2020-21 from $210 to $350.
- Additional support will be made available for First Nations, Inuit, and Métis Nation students pursuing post-secondary education.
- Extensions will be made to expiring federal graduate research scholarships and postdoctoral fellowships, as well as supplementation of existing federal research grants, to support students and post-doctoral fellows.
UPDATE April 16, 2020 – The Government of Canada has introduced a new rent relief measure for businesses, as well as new criteria for the Canada Emergency Business Account, Canada Emergency Response Benefit and Canada Emergency Wage Subsidy.
Canada Emergency Commercial Rent Assistance
On April 16, Prime Minister Justin Trudeau announced a new rent assistance program for businesses. The new Canada Emergency Commercial Rent Assistance (CECRA) program will help small businesses cover their rents for April, May, and June. The assistance is being rolled out in collaboration with the provinces and territories.
Canada Emergency Business Account
On April 16, Prime Minister Justin Trudeau announced the eligibility criteria for the Canada Emergency Business Account is being expanded. The Canada Emergency Business Account (CEBA) program provides interest-free loans of up to $40,000 to small businesses and not-for-profit organizations, to help cover their operating costs due to the economic impact of the COVID-19 virus. To qualify, previous criteria required these organizations to demonstrate they paid between $50,000 – $1 million in total payroll in 2019. New criteria requires these organizations to demonstrate they paid between $20,000 and $1,500,000 in total payroll last year. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25% (up to $10,000). Small businesses and not-for-profit organizations should contact their financial institutions to apply for these loans. Access to the CEBA application was made available on April 9..
Canada Emergency Response Benefit & Other Support
On April 15, Prime Minister Justin Trudeau announced further changes to expand the eligibility rules for the Canada Emergency Response Benefit (CERB) to:
- Allow individuals to earn up to $1,000 per month while collecting the CERB. The $1,000 threshold includes income from employment and/or self employment income, and includes tips earned while working, non-eligible dividends, honoraria, and royalties. Pension, student loans and bursaries are not employment income and should not be included in the $1,000.
- Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.
- Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
Trudeau also announced a wage boost for COVID-19 essential workers who make less than $2,500 per month. Additional support measures for students and those paying commercial rent are expected soon. The Prime Minister also announced the launch of a web portal and app, called Wellness Together Canada, offering mental health resources for Canadians who need support during the COVID-19 pandemic.
Canada Emergency Wage Subsidy
On April 11, the Canada Emergency Wage Subsidy (CEWS) legislation was passed. The final legislation included some changes to earlier announced provisions, including future eligibility criteria (once an employer is found eligible for a specific period, the employer automatically qualifies for the next period) and special rules for corporate groups.
This program will provide a 75% wage subsidy (75% of remuneration paid, up to a maximum benefit of $847 per week) to eligible employers, for up to 12 weeks, retroactive to March 15, 2020. Eligible employers include individuals, taxable corporations, partnerships consisting of eligible employers, not-for-profit organizations and registered charities. This subsidy will be available to eligible employers who see a drop of at least 15% of their revenue in March 2020 and a 30% drop for the following months.
UPDATE April 9, 2020 – The Government of Canada has introduced changes to the Canada Emergency Wage Subsidy, a new refund of certain payroll contributions and new student supports.
Canada Emergency Wage Subsidy Eligibility
The eligibility criteria for businesses to access the Canada Emergency Wage Subsidy (CEWS) were expanded to address the realities faced by the not-for-profit sector, high growth companies and new businesses. The government proposed the following additional flexibility:
To measure their revenue loss, all employers have the flexibility to compare their revenue of March, April and May 2020 to:
-that of the same month of 2019; or
-an average of their revenue earned in January and February 2020.
For March, a reduction to the 30% benchmark to 15%. Employers are allowed to measure revenues either on the basis of:
-accrual accounting (as they are earned); or
-cash accounting (as they are received).
Registered charities and non-profit organizations are allowed to choose to include or exclude government funding in their revenues for the purpose of applying the revenue reduction test. Where an option is provided for revenue loss calculation / measurement methods, the selected method would be required to be used for the entire duration of the program. Special rules would also be provided to address issues for corporate groups, non-arm’s length entities and joint ventures.
Refund of Certain Payroll Contributions
As well, the government proposed that employers eligible for the CEWS be entitled to receive a 100% refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. This refund would apply to the entire amount of employer-paid contributions in respect of remuneration paid to furloughed employees in a period where the employer is eligible for the CEWS.
Support for Students
‘The government also introduced enhancements to the Canada Summer Job Program, including:
- 100% subsidy for students;
- Extend job placements to winter to consider jobs starting later; and
- Extend program to allow for part-time workers.
This article has been written in general terms to provide broad guidance only. It should not be relied upon to cover specific situations and you should not act upon the information contained herein without obtaining specific professional advice. Please contact our office to discuss this information in the context of your specific circumstances. We accept no responsibility for any loss or damage resulting from your reliance on the information in this article.