CLIENT INSPIRED. COVID INFORMED.

Access our COVID-19 HUB for up-to-date information on economic support measures to help Canadians and businesses through the COVID-19 outbreak.

Understanding Canada’s COVID-19 Programs

Canada’s COVID-19 Economic Response Plan provides support to Canadians and businesses facing hardship as a result of the global COVID-19 outbreak through support programs for individuals, businesses, and specific sectors. Included in this plan is a series of financial measures to help combat the adverse financial effects of COVID-19 on businesses and individuals.

Our COVID-19 Information Hub is designed to help our clients and community understand the programs available by highlighting and summarizing select financial measures. The measures are rapidly changing and evolving to adapt to the current situation and needs of Canadians and businesses and to fill gaps that remain. The information in our COVID-19 HUB is kept up-to-date regularly.  

Canada Emergency Wage Subsidy

This economic support measure provides Canadian businesses who employ workers in Canada with a 75% wage subsidy to cover their employee wages, for a period of 12 weeks, from March 15 to June 6, 2020, with a proposed extended period of an additional 12 weeks, from June 7 to August 29, and for a further proposed extended period to December 19, 2020. In order to qualify, a business must meet a revenue reduction test of a drop in revenues of at least 15% in March or 30% in April, May, or June. This support measure is currently being redesigned for proposed extended periods from July onward.

The Canada Emergency Wage Subsidy (CEWS) is a subsidy available for a period of twelve weeks from March 15, 2020 to June 6, 2020, with a proposed extension for an additional twelve weeks from June 7 to August 29 and a further proposed extension to December 19, 2020 (see update below). The program will provide a subsidy of 75% of eligible remuneration, paid by an eligible entity that qualifies, to each eligible employee —up to a maximum of $847 per week. The program is being redesigned for the period beginning July 5 and subsequent periods.

Subsidy Amount

The subsidy amount for an arm’s length eligible employee on eligible remuneration paid in respect of a claim period (between March 15 and July 4, 2020) is the greater of:

  • 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
  • the amount of remuneration paid, up to a maximum benefit of $847 per week or 75 per cent of the employee’s baseline remuneration, whichever is less.
Eligible employee

An eligible employee is an individual employed in Canada by the eligible employer in the claim period, as long as the employee has not been without remuneration from the eligible employer for a period of 14 or more consecutive days in the claim period.

Eligible remuneration

Eligible remuneration is the amount paid to an employee as salary, wages, and other remuneration, certain taxable benefits (provided such amounts are actually paid), and fees, commissions or other amounts paid for services. These are amounts for which an eligible employer would generally be required to make payroll deductions to be remitted to the CRA. Eligible remuneration excludes retiring allowances, stock option benefits, and amounts that can be reasonably expected to be repaid as part of an arrangement to increase the CEWS subsidy.

Baseline remuneration

Baseline remuneration is the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration.

Qualifying period or claim period

This is the period for which an employer can claim the wage subsidy for remuneration paid to eligible employees. An employer may be able to claim the wage subsidy for one or more of the following claim periods:

  • the period that begins on March 15, 2020 and ends on April 11, 2020;
  • the period that begins on April 12, 2020 and ends on May 9, 2020; and
  • the period that begins on May 10, 2020 and ends on June 6, 2020;
  • the period that begins on June 7, 2020 and ends on July 4, 2020;
  • the proposed period that begins on July 5, 2020 and ends on August 1, 2020 (see update below); and
  • the proposed period that begins on August 2, 2020 and ends on August 29, 2020 (see update below).
New employees

An employer may be able to claim the wage subsidy for arm’s length eligible employees hired after March 15, 2020.

Employees Retroactively Hired Back

An employer may hire back eligible employees and pay them retroactively in respect of a claim period, to be able to qualify for the wage subsidy. The employee must be hired back and paid for the claim period before applying for the wage subsidy. If such an employee has received a Canada Emergency Response Benefit (CERB) payment from the CRA for a claim period, and it is later determined that they are no longer eligible for the CERB, the employee must return or repay the CERB amount.

Special Rule for Non-arm’s Length Employee

A special rule applies to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees is limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of the lesser of $847 per week and 75% of the employee’s baseline remuneration. The subsidy is only  available in respect of non-arm’s length employees employed prior to March 15, 2020.

Additional Subsidy Amount – Refund of Certain Payroll Contributions

In addition to the above wage subsidy amount, employers eligible for the CEWS are entitled to receive a 100-per-cent 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 (on leave with pay) employees in a period where the employer is eligible for the CEWS.

Interaction with Other Subsidies

The CEWS subsidy is reduced by:

  • amounts claimed under the 10% temporary wage subsidy (TWS)

If an employer is eligible for both CEWS and the TWS for a period, all amounts that the employer claims under the TWS for remuneration paid in a specific claim period, reduce the amount available to be claimed under the CEWS in that same period. If an employer completes their CEWS application and does not enter any amount for the TWS, the CEWS will be determined as if the employer is electing 0% as the prescribed percentage for calculating their TWS and requesting the maximum CEWS. However, the eligible employer should indicate the 0% election on the self-identification form under the TWS program.

  • amounts received under a work-sharing benefit program

Taxation

The CEWS subsidy is considered assistance received from a government. The amount is taxable and is to be included in the computing the income of the eligible employer.

Update

The CEWS program is proposed to be extended to December 19, 2020. This is the second extension of this program. The first extension was for an additional 12 weeks, to August 29. All the rules related to the wage subsidy for the fourth period (June 7 to July 4, 2020), are identical to the ones for the preceding third period (May 10 to June 6, 2020). The extended program is currently being redesigned and the proposed changes would apply for the fifth period (July 5 to August 1, 2020) and subsequent periods. The government recently announced details of these proposed changes – see our July 17, 2020 update to our article, Updates to COVID-19 Economic Support Measures, for more information on the proposed changes.

Eligible Entities

Eligible entities include:

  • corporation (that is not exempt from tax under Part I of the Income Tax Act);
  • individual (including a trust);
  • registered charity;
  • person that is exempt from tax under Part I of the Act, that is:
    • an agricultural organization;
    • a board of trade or a chamber of commerce;
    • a non-profit corporation for scientific research and experimental development;
    • a labour organization or society;
    • a benevolent or fraternal benefit society or order; and
    • a non-profit organization;
  • a partnership, each member of which is a person or partnership described in this list OR
  • the following prescribed organizations:
    • a person or partnership that operates a private school or private college;
    • in respect of a claim period, a partnership, if throughout the claim period, 50% or more of the fair market value of all interests in the partnership are held – directly or indirectly, through one or more partnerships – by eligible employers;
    • a registered Canadian amateur athletic association;
    • a registered journalism organization;
    • certain Indigenous businesses; specifically:
      • a tax-exempt corporation (under paragraph 149(1)(d.5) of the Act) carrying on a business that is at least 90% owned by one or more Indigenous governments;
      • a tax-exempt corporation (under paragraph 149(1)(d.6) of the Act) carrying on a business that is owned 100% by one or more Indigenous governments or by tax-exempt corporations described above;
      • a partnership, each member of which is an eligible employer or an Indigenous government;

Public institutions are ineligible. A public institution includes: a public school, school board, hospital, health authority, public university or college,  municipality and local government and tax-exempt Crown corporation.

Eligibility

In order to qualify for the wage subsidy, an eligible entity must meet the following conditions:

    • it had an open payroll program account with the CRA on March 15, 2020;
    • it experienced the required reduction in revenue for one or more claim period;
    • it makes a wage subsidy application for the claim period, in a prescribed form and manner, before October 2020; and
    • the individual who has principal responsibility for the eligible employer’s financial activities attests that the application mentioned above is complete and accurate in all material respects.

Revenue Reduction Test

Eligible employers must meet a prescribed revenue reduction test for a reference period in order to qualify for CEWS for the related claim period. Employers must demonstrate a drop of at least:

    • 15% of qualifying revenue in March 2020
    • 30% of qualifying revenue in April 2020
    • 30% of qualifying revenue in May 2020
    • 30% of qualifying revenue in June 2020

when compared to their qualifying revenue for the same period in 2019 (or the average of January and February 2020), in order to qualify for the wage subsidy. Employers are under no obligation to prove that the decline in revenue is related to the COVID-19 crisis.

Reference Periods

The reference periods of March, April, May, and June 2020 are the periods for which qualifying revenues are assessed to determine the revenue reduction. The reference periods as they relate to claim periods are as follows:

  • March 2020 – for the claim period that begins on March 15, 2020 and ends on April 11, 2020;
  • April 2020 – for the claim period that begins on April 12, 2020 and ends on May 9, 2020;
  • May 2020 – for the claim period that begins on May 10, 2020 and ends on June 6, 2020; and
  • June 2020 – for the claim period that begins on June 7, 2020 and ends on July 4, 2020.

If an employer meets the revenue reduction test for a reference period, it qualifies for the wage subsidy for that related claim period. If an employer has not experienced the required reduction in revenue to qualify to claim the wage subsidy for a particular claim period, it may still qualify to claim the wage subsidy for another claim period if it has experienced the required reduction in revenues in that other claim period.

Deeming Rule

Once an employer has experienced the required reduction in revenue for a particular claim period, it is automatically considered to have experienced the required reduction in revenue for the immediately following claim period.

Qualifying revenue

This means the inflow of cash, receivables, or other consideration arising in the course of its ordinary activities in Canada in a particular period. These inflows are generally from the sale of goods, the rendering of services, and the use—by others—of the eligible employer’s resources. Qualifying revenue excludes amounts from extraordinary items, amounts on account of capital and amounts from persons or partnerships that the eligible employer was not dealing with at arm’s length.

For registered charities, qualifying revenue generally includes gifts and other amounts received in the course of its ordinary activities. Where it operates a related business, the revenue from that related business is also included in the registered charity’s qualifying revenue.

Electable Options 

For the purposes of applying the revenue reduction test, a number of options are available:

  • Option to compare revenues to the same calendar month of 2019 or to an average of revenue earned in January and February 2020. An election is required in order to use the January/February average method (for employers that were carrying on business on March 1, 2019).*
  • Option to measure revenues on the accrual method or cash method (election required) of accounting.*
  • For registered charities and non-profit organizations, an option to include or exclude (election required) government funding in their revenues.*
  • Where all or substantially all of revenue is from non-arm’s length sources, a jointly-elected option to use a special weighted-average approach to determine qualifying revenue for the reference period, which would include non-arm’s length revenues.
  • For a group of eligible employers that prepares consolidated financial statements, jointly-determined option to use revenue of the group on a consolidated basis or to use revenue of each member of the group separately.
  • For an affiliated group of eligible employers, jointly-elected option to use revenue of the affiliated group on a consolidated basis or to use revenue of each member of the group separately.
  • For a joint venture, jointly-elected option to use revenue of the joint venture or each member of the joint venture separately.

For the first three options above (denoted with an *), the selected option is required to be used for the entire duration of the program (for all claim periods). All elections must be made and retained with the eligible employer’s other books and records in support of its wage subsidy claim and eligibility and the individual who has principal responsibility for the eligible employer’s financial activities must attest that this is the case.

Average of January and February 2020 revenue

Where the average of January/February revenue option is used for purposes of the revenue reduction test, the average qualifying revenue must be calculated as follows: 0.5 x [total qualifying revenues for January and February of 2020] x [60 days divided by the number of days in January and February of 2020 during which the employer was carrying on business].

Summary Reference Table

To summarize, the table below outlines each claiming period, the required reduction in revenue and the reference period for eligibility:

 

Application

Applications open starting on April 27, 2020 and must be made before October 2020. Applications can be made only after the end of the claim period, provided the employer has paid the eligible remuneration that it is claiming for that period. A separate application must be made for each eligible claim period.

The CEWS subsidy will be processed at the payroll program (RP) account level, so a separate application is required to be filed for each RP account. For an in-depth understanding of the online application requirements and input fields, refer to: CEWS application guide.

There are three ways to apply:

• Most businesses may apply using My Business Account
• Business representatives may apply using Represent a Client
• If neither are an option for you, use the Web Forms application with your web access code.

Note: Only representatives authorized at Level 2 or 3 will be able to apply

If you do not have a web access code, you will need to provide the date of registration or the total income tax reported in box 22 of the most recent original 2018 tax year submitted T4 summary.

Adjustments to Applications

The mechanism to make adjustments to your previously filed 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:

https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-after-apply.html#change

To Change a Claim You Submitted

You may request adjustments to applications you have already submitted. To change a previous wage subsidy claim, visit:

• My Business Account or
• Represent a Client

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 to support the amended application.

Temporary Wage Subsidy

This economic support measure provides Canadian businesses who employ workers in Canada with a 10% wage subsidy to cover their employee wages for a period of 3 months, from March 18 to June 20, 2020. In order to qualify, a business must have a business number and payroll program account with CRA on March 18, 2020.

The Temporary Wage Subsidy for employers is a three-month measure that allows eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA).

The subsidy is equal to 10% of the remuneration you pay between March 18, 2020, and June 20, 2020. The subsidy is subject to two caps:

  • maximum of $1,375 per employee and
  • maximum of $25,000 total per employer

The subsidy must be calculated manually.

Associated CCPCs are not required to share the maximum subsidy of $25,000 per employer.

If you did not pay salary, wages, bonuses, or other remuneration to an employee between March 18, 2020, and June 20, 2020, you cannot receive the subsidy, even if you are an eligible employer.

The subsidy is considered assistance received from a government. The amount is taxable and is to be included in the computing the income of the eligible employer.

Eligible Entities

Eligible entities include:

  • individual (excluding trusts),
  • partnership,  if their members consist exclusively of individuals (excluding trusts) registered charities, other partnerships eligible for the subsidy, or eligible Canadian-controlled private corporations
  • non-profit organization
  • registered charity
  • Canadian-controlled private corporation (including a cooperative corporation) if:
    • it has a business limit for its last taxation year that ended before March 18, 2020, greater than nil (determined without reference to the passive income business limit reduction) and
    • its taxable capital employed in Canada for the preceding tax  year, calculated on an individual or associated group basis, is less than $15 million

Eligibility

To qualify for this subsidy, an eligible entity must:

  • have an existing business number and payroll program account with the CRA on March 18, 2020; and
  • pay salary, wages, bonuses, or other remuneration to an eligible employee.

An eligible employee is an individual who is employed in Canada.

Application

You do not need to apply for this subsidy.

Once you have calculated your subsidy, you can reduce your current remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy. The subsidy is only calculated when you remit these amounts to the CRA. You can start reducing remittances of federal, provincial, or territorial income tax in the first remittance period that includes remuneration paid between March 18, 2020, and June 20, 2020. For example, if you are a regular remitter, you can reduce your remittance that is due to the CRA on April 15, 2020.

The subsidy will not affect deductions from your employees. You will continue deducting income tax, Canada Pension Plan contributions, and Employment Insurance premiums from salary, wages, bonuses, or other remuneration paid to your employees, as you currently do.

Important: You cannot reduce your remittance of Canada Pension Plan contributions or Employment Insurance premiums.
For example, if you calculated a subsidy of $2,050, you would reduce your current remittance of federal, provincial, or territorial income tax by $2,050. You could continue reducing future income tax remittances, up to the maximum of $25,000, for all remuneration paid before June 20, 2020.

 

Remittances Made to Revenu Québec

This Temporary Wage Subsidy for Employers allows eligible employers to reduce remittances made to the CRA only.

If Subsidies Exceed the Remittances

If the income taxes you deduct are not sufficient to offset the value of the subsidy in a specific period, you can reduce future remittances to benefit from the subsidy. This includes reducing remittances that may fall outside of the application period for the wage subsidy (after June 20, 2020).

For example, if you calculated a subsidy of $2,050 on remuneration paid between March 18, 2020, and June 20, 2020, but only deducted $1,050 of federal, provincial, or territorial income tax from your employees, you can reduce a future income tax remittance by $1,000, even if that remittance is in respect to remuneration paid after June 20, 2020.

If You Do Not Reduce Remittances During the Year

If you are an eligible employer, but choose not to reduce your payroll remittances during the year, calculate the temporary wage subsidy on remuneration paid between March 18, 2020, and June 20, 2020. You can then ask for the subsidy to be paid to you at the end of the year, or transferred to the next year’s remittance.

Recordkeeping

You will need to keep information to support your subsidy calculation. This includes:

  • the total remuneration paid between March 18, 2020, and June 20, 2020;
  • the federal, provincial, or territorial income tax that was deducted from that remuneration; and
  • the number of employees paid in that period.

The CRA is currently updating reporting requirements. More information on how to report this subsidy will be released in the near future.

Reporting

After the eligibility period ends 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. The CRA will use this information to reconcile the subsidy with your payroll program account.

Eligible employers who did not reduce their remittances must also complete this form to allow the CRA to credit your payroll program account by the amount of the subsidy that you 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.

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.

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”.

Canada Emergency Business Account

This economic support measure provides small and medium enterprises with access to credit through interest free loans of up to $40,000. In order to qualify, an enterprise must demonstrate it paid between $20,000 to $1.5 million in total payroll in 2019.

The Canada Emergency Business Account program provides interest-free loans of up to $40,000 to eligible small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).

The Canada Emergency Business Account is a government guaranteed loan of up to $40,000 that is interest-free until December 31, 2022. Key features:

  • 0% interest until December 31, 2022.
  • No principal payments until December 31, 2022.
  • Principal repayments can be voluntarily made at any time without fees or penalties.
  • $10,000 loan forgiveness is available, provided outstanding balance is $40,000 at December 31, 2020, and $30,000 is paid back between January 1, 2021 and December 31, 2022.
  • If any part of the balance is not paid by December 31, 2022, the remaining balance will be converted to a 3-year term loan at 5% annual interest, paid monthly, effective January 1, 2023.
  • The full balance must be repaid by no later than December 31, 2025.

The funds from this loan should be used to pay non-deferrable operating expenses of the Borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.

Eligible Entities

Eligible entities include:

  • small businesses
  • not-for-profit organizations
  • union, charitable, religious or fraternal organization that is a registered T2 or T3010 corporation that generates a portion of its revenue from the sales of goods or services

Ineligible entities include:

  • government organization or body, or an entity owned by a government organization or body;
  • union, charitable, religious or fraternal organization or entity owned by such an organization that is not a registered T2 or T3010 corporation that generates a portion of its revenue from the sales of goods or services;
  • an entity owned by individual(s) holding political office;
  • any entity that promotes violence, incite hatred or discriminate on the basis of sex, gender, sexual orientation, race, ethnicity, religion, culture, region, education, age or mental or physical disability.

Eligibility

To qualify for this program, an eligible entity must meet the following conditions:

  • is a Canadian operating business in operation as of March 1, 2020.
  • has a federal tax registration.
  • total employment income paid in the 2019 calendar year was between $20,000 and $1,500,000.
    • An eligible entity with $20,000 or less in total employment income paid in the 2019 calendar year may qualify if it also meets the following conditions:
        • has a Canada Revenue Agency business number and has filed a 2018 or 2019 tax return.
        • has Eligible Non-Deferrable Expenses (subject to adjustments for support or subsidies under other Government of Canada COVID response programs) between $40,000 and $1,500,000. Eligible Non-Deferrable Expenses could include costs such as rent, property taxes, utilities, and insurance. Expenses will be subject to verification and audit by the Government of Canada.
  • has an active business chequing/operating account with the Lender, which is its primary financial institution. This account was opened on or prior to March 1, 2020 and was not in arrears on existing borrowing facilities, if applicable, with the Lender by 90 days or more as at March 1, 2020.
  • has not previously used the Program and will not apply for support under the Program at any other financial institution.
  • acknowledges its intention to continue to operate its business or to resume operations.
  • agrees to participate in post-funding surveys conducted by the Government of Canada or any of its agents.
Eligible Non-Deferrable Expense categories

Eligible Non-Deferrable Expenses may have already been incurred after January 1, 2020 or are to be incurred prior to December 31, 2020. For example, if you have a monthly telecommunications bill for $200 and it is expected to continue throughout the year, then your full 2020 forecasted Eligible Non-Deferrable Expense would be 12 months at $200 = $2,400 total expenses for 2020.

Total incurred and projected Eligible Non-Deferrable Expenses 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.

Eligible Non-Deferrable Expense categories are the following:

    • Wages and other employment expenses to independent (arm’s length) third parties;
    • Rent or lease payments for real estate used for business purposes;
    • Rent or lease payments for capital equipment used for business purposes;
    • Payments incurred for insurance related costs;
    • Payments incurred for property taxes;
    • Payments incurred for business purposes for telephone and utilities in the form of gas, oil, electricity, water and internet;
    • Payments for regularly scheduled debt service;
    • Payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations or permissions necessary to conduct business by the Borrower.

Dividends are not an Eligible Non-Deferrable Expense.

Adjustments to the Amount of Eligible Non-Deferrable Expenses

Other Government of Canada COVID response programs that will cause adjustments to the amount of 2020 Eligible Non-Deferrable Expenses that can be reported include the following:

  • Canada Emergency Wage Subsidy,
  • 10% Temporary Wage Subsidy,
  • Canada Emergency Commercial Rent Assistance, Regional Relief and Recovery Fund,
  • Futurpreneur Canada,
  • Northern Business Relief Fund,
  • Fish Harvester Grant,
  • relief measures for Indigenous businesses, and
  • $250 million COVID-19 IRAP (Industrial Research Assistance Program) Subsidy Program
UPDATE

The government announced that it 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. More details are expected to follow soon.

Application

There are two CEBA application streams, depending on which eligibility criteria are met: the Payroll Stream and the Non-Deferrable Expenses Stream.

Applications must be completed by latest August 31st, 2020. After completing the application with the financial institution, supporting documentation must be uploaded by latest September 3rd, 2020.

Payroll Stream

This stream is for businesses with total employment income paid to employees in 2019 greater than $20,000 and less than $1,500,000.

Businesses in this stream should contact their primary financial institution (where primary active business chequing/operating account is held) to apply for these loans. Most financial institutions allow application through their mobile banking app or through OnLine banking. Applying through these digital channels is the easiest and fastest way to get access to funds.

Financial institutions provide application information to the Government of Canada to confirm eligibility. If successful, the Government of Canada will notify the financial institution and it will provide funding for the CEBA loan.

Applications are now open.

Non-Deferrable Expenses 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.

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.

Preparing for application – documents needed

The three main pieces of information needed to complete the application are:

  • The name of the financial institution where the CEBA application was submitted; and
  • 9-digit business number (same number used in the CEBA application with the financial institution); and
  • Electronic or paper copies of Receipts / Invoices / Agreements to be uploaded as evidence of 2020 Eligible Non-Deferrable Expenses.

Applications for the expanded non deferrable expenses stream CEBA open on June 26, 2020. The expanded CEBA 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. 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.

Multiple Businesses

Each qualifying business must have a unique 9-digit Canada Revenue Agency (CRA) Business Number. Each qualifying business is limited to one CEBA loan.

Helpful Links

CEBA 

Loan Guarantee for Small and Medium Enterprises

This economic support measure provides small and medium enterprises with access to credit through EDC guaranteed and BDC co-lending term loans. Qualification is assessed through each financial institution’s criteria.

EDC Loan Guarantee for Small and Medium-Sized Enterprises

This program provides credit and cash flow term loans to small and medium-sized enterprises. Canadian businesses in all sectors that were otherwise financially viable and revenue generating prior to the COVID-19 outbreak are eligible to apply.

It allows financial institutions to issue operating credit and cash flow term loans of up to $6.25 million to existing clients, with 80 per cent guaranteed by EDC.

This money is to be used for operational expenses, not for dividend payouts, shareholder loans, bonuses, stock buyback, option issuance, increases to executive compensation or repayment/refinancing of other debt.

BDC Co-Lending Program for Small and Medium Enterprises

This program provides term loans for operational and liquidity needs of businesses, which could include interest payments on existing debt. Similar to the EDC program, this program is available to businesses that were financially viable and revenue-generating prior to the COVID-19 outbreak.

Loans would be interest-only for the first 12 months, with a 10-year repayment period. Maximum finance amounts will differ based on business revenues. 80% of financed amount provided by BDC and the remaining 20% by applicant’s financial institution. Financing is to be used for operational cash flow requirements. The program is available until or before September 30, 2020.

The program is designed in three segments to target support to different business sizes.

  • Loans of up to $312,500 to businesses with revenues of less than $1 million.
  • Up to $3.125 million for businesses with revenues between $1 million and $50 million.
  • Up to $6.25 million for businesses with revenues in excess of $50 million.

Eligible Entities

Eligible entities include small and medium-sized enterprises.

Eligibility

Canadian businesses in all sectors that were otherwise financially viable and revenue generating prior to the COVID-19 outbreak are eligible to apply. The programs are available to both exporting and non-exporting companies. Eligibility is based criteria established by the financial institution in conjunction with EDC/BDC.

Application

To apply for these programs, contact your primary financial institution. Both programs are now available.

Canada Emergency Commercial Rent Assistance

This economic support measure provides small businesses that have been affected by COVID-19 with a 75 per cent reduction in rent for the months of April, May, and June through the provision of forgivable loans to qualifying commercial property owners. In order to qualify, a small business tenant must be paying less than $50,000 per month in rent and have experienced at least a 70% drop in pre-COVID revenues. On June 29, 2020, it was announced that CECRA will be prolonged by 1-month through to the end of July 2020. On July 31, 2020, it was announced that CECRA will be further prolonged by 1-month through to the end of August 2020.

The Canada Emergency Commercial Rent Assistance program will lower April, May, and June rent by 75 per cent for small businesses that have been affected by COVID-19. The program will provide forgivable loans to eligible commercial property owners to cover 50% of gross rent owed by impacted eligible small business tenants during the 3-month period of April, May and June 2020.

The loans will be forgiven if the property owner agrees to reduce the small business tenants’ rent by at least 75% under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The property owner will be responsible for no less than half of the remaining 50% of gross rent payments (paying no less than 25% of the total). The small business tenant will be responsible for no more than half of the remaining 50% of the gross rent payments (paying no more than 25% of the total).

Impacted small business tenants are businesses paying no more than $50,000 per month in rent, are generating no more than $20 million in gross annual revenues, and who have experienced at least a 70% drop in pre-COVID revenues.

Program assistance can be applied retroactively and may still be applied for once the 3-month period has ended, if eligibility can be proven during those months. Property owners must refund amounts paid by the small business tenant for the period. If rent has been collected at the time of approval, a credit to the tenant for a future month’s rent (i.e. July for April) is acceptable if agreed upon by both the property owner and the tenant. This can be a flexible 3-month period.

Canada Mortgage and Housing Corporation (CMHC) will administer this program on behalf of the Government of Canada and their provincial and territorial partners.

Loan forgiveness

The interest free loan will be forgiven on December 31, 2020. To ensure loan forgiveness, the property owner must follow the terms and conditions of the loan, including:

  • complying with the Rent Reduction Agreement
  • ensuring that the attestation and application (including supporting documentation) is accurate and truthful

If the property owner files for bankruptcy, restructure, reorganize or dissolve your business, they will need to pay back this loan. In the event of default, CMHC has full recourse to recover the CECRA funding from the property owner.

Use of Funds

There are rule on how the property owner can use the funds. In order of priority, they can use the funds for:

  • reimbursing impacted tenants for any rent paid above 25% during the eligible period unless the tenant choses to apply the previously paid rent against future rent
  • any costs and expenses relating directly to the property, including any financing held by the property owner operation and maintenance and repair obligations (such as costs of common area maintenance, property taxes, insurance and utilities)
Monthly Gross Rent

Included in Gross Rent:

  • Net rent / minimum rent / base rent (in a net lease)
  • Regular monthly installments of operating costs (in a net lease)
  • Regular monthly installments of property taxes payable to the landlord (in a net lease)
  • Regular monthly installments of other additional rent amounts payable to the landlord — for example: maintenance costs, repairs, utilities, management fees, etc. (in a net lease)
  • Gross rent (in a gross lease)
  • Percentage of sales rent paid (if included in the lease arrangement)

Excluded from Gross Rent:

  • Damages
  • Indemnity payments
  • Payments arising due to tenant default / landlord enforcement
  • Payments arising due to landlord exercise of self-help remedies
  • Interest and penalties on unpaid amounts
  • Fees payable for discrete items or special services (for example: fees to landlord for reviewing plans, supervising work, considering requests for consent, performing exceptional tasks at tenant’s request)
  • Reconciliation adjustment payments
  • Amounts required under the lease agreement to be paid separately by the tenant to 3rd parties (for example: property taxes, utilities, insurers)
  • Costs of non-monetary obligations (e.g., repairs and maintenance)
  • Insurance proceeds or proceeds from other rent subsidy programs
    Note: applying for insurance coverage does not remove you from being eligible for the program, but it may adjust the amounts received if you successfully receive payments from insurance claims or other programs to cover rent

Update: On June 29, 2020, it was announced that CECRA will be prolonged by 1-month through to the end of July 2020. On July 31, 2020, it was announced that CECRA will be further prolonged by 1-month through to the end of August 2020. 

  • Only those tenants approved in the April, May and June application are eligible for the July and August extensions.
  • If a business had an average revenue decline of 70% or more in April, May and June, they are deemed eligible for the additional months of rent relief. However, not all tenants in the original application need to be included for the July and August extensions.

Eligible Entities

Eligible entities include:

  • small businesses
  • non-profit organizations
  • charitable organizations

Eligibility

Property Owner

To qualify for this program, a commercial property owner must meet the following conditions:

  • own commercial real property which is occupied by one or more impacted small business tenants
  • enter (or have already entered) into a legally binding rent reduction agreement for the period of April, May and June 2020, reducing an impacted small business tenant’s rent by at least 75%
  • ensure the rent reduction agreement with each impacted tenant includes:
    • a moratorium on eviction for the period during which the property owner agrees to apply the loan proceeds, and
    • a declaration of rental revenue included in the attestation

CECRA does not apply to:

  • any federal, provincial, or municipal-owned properties where the government is the landlord of the small business tenant; or
  • where the commercial property owner is or is controlled by an individual holding federal or provincial political office.

Exceptions:

  • Where there is a long-term lease to a First Nation, or Indigenous organization or government, the First Nation or Indigenous organization or government is eligible for CECRA for small businesses as a property owner.
  • Where there are long-term commercial leases with third parties to operate the property (for example, airports), the third party is eligible as the property owner.
  • Also eligible are post-secondary institutions, hospitals, and pension funds, as well as crown corporations with limited appropriations designated as eligible under CECRA for small businesses.

Commercial real property is defined as commercial properties with small business tenants. Commercial properties with a residential component and multi-unit residential mixed-use properties would equally be eligible with respect to their small business tenants.

Small Business Tenant

To qualify for this program, an impacted small business tenant must meet the following eligibility criteria:

  • pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement),
  • generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level), and
  • have experienced at least a 70% decline in pre-COVID-19 revenues.

Eligible small business tenants who are in sub-tenancy arrangements are also eligible, if these lease structures meet program criteria.

Revenue reduction test

Small business tenants can calculate their revenue reduction using one of the following scenarios, as applicable:

  • If business was operating during April – June 2019, then compare gross revenues from April, May and June of 2020 to gross revenues of April, May and June of 2019.
  • If business was not operating during April – June 2019, then compare average gross revenues from April, May and June of 2020 to average gross revenues for January and February 2020.

Revenue must consist of revenue earned from ordinary activities in Canada, calculated using your normal accounting method and exclude revenues from extraordinary items.

For registered charities and non-profit organizations, the calculation would include most forms of revenue, excluding revenues from non-arm’s length persons. These organizations would then be allowed to choose to include revenue from government sources as part of the calculation.

New businesses

Small businesses that opened on or after March 1, 2020 are not eligible.

Non-arms length owners and tenants

Landlords and tenants who are not at arm’s length will be included in the CECRA for small businesses so long as there was a valid and enforceable lease agreement in place prior to April 1, on no greater than market terms.

Additional one month extension to July 2020

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.

Application

This program is now available. The CECRA application portal is open.

The program can be applied for retroactively. Property owners may still apply for assistance once the 3-month period has ended if they can prove eligibility during those months. The deadline to apply is August 31, 2020. Property owners can only apply for the program once per property. For a given property, property owners must apply for all 3 months at the same time and all impacted tenants must be included on a single application.

Information Requirements

The online application process includes both fillable fields and templates of the documents required. Property owners need to provide information in support of their application, sign an attestation and agree to the terms and conditions of the loan agreement in order to be eligible for the program. Information requirements include:

Attestations
  • Tenant or Sub-tenant’s Attestation (sample PDF):
    Property owners must have each of their eligible commercial small business tenants and/or subtenants sign an attestation. The Tenants are responsible for attesting to their eligibility with the program requirements.
  • Property Owner’s Attestation (sample PDF):
    Property owners must sign an attestation confirming the information relating to the property owner and the property provided in the application is correct and attest to their eligibility with the program requirements.
Agreements
  • Rent Reduction Agreement (sample PDF):
    Property owners must enter into a legally binding rent reduction agreement with each impacted tenant to confirm the rent reduction in accordance with the program terms and conditions.  This agreement is conditional upon final approval of the application for CECRA for small businesses.
  • Forgivable Loan Agreement (sample PDF):
    Property owners must agree to the terms and conditions in the application and outlined in the forgivable loan agreement.
Property owner information
  • Property information includes: property address, property type, property tax statement, latest rent roll for each property and the number of commercial units
  • Applicant information includes: banking information (including bank statement), property owner contact information, co-ownership information and contact details for co-owners
Tenant information
  • Tenant information includes: tenant contact information, registered business name, lease area and the monthly gross rent for the period of April, May and June 2020

Canada Emergency Response Benefit

This economic support measure provides individuals with a taxable benefit of $2,000 every 4 weeks for up to 16 weeks. In order to qualify, individuals must be eligible workers who have lost their income due to COVID-19 and must have had income of at least $5,000 in 2019 (or 12 months prior).

The Canada Emergency Response Benefit program provides temporary financial support to employed and self-employed Canadians who have stopped working because of COVID-19.

The program provides a payment of $2,000 for a 4-week period ($500 per week) for a maximum of 24 weeks within the eligibility period from March 15, 2020 to October 3, 2020. The calculation of the 24 weeks begins with the first week for which a Benefit is received. However, the 24 weeks do not have to be taken consecutively. Applications can be made for each 4-week period of eligibility, up to a maximum of 24 weeks (6 periods in total). Each payment of the CERB covers a 4-week period.

CERB benefits are taxable and will need to be reported on next year’s tax filing. An information slip will be made available for the 2020 tax year in My Account under Tax Information Slips (T4 and more).

Eligible Entities

Eligible entities are individuals.

Eligibility

To qualify for the CERB, individuals must meet all of the following conditions:

  • live in Canada and are at least 15 years old and have a valid Social Insurance Number
  • stopped working because of COVID-19 or are eligible for EI regular or sickness benefits or have exhausted their EI regular benefits or EI fishing benefits between December 29, 2019 and October 3, 2020
  • have not voluntarily quit their job
  • had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application.

The eligibility rules allow people to earn up to $1,000 per month while collecting the CERB. When submitting a first claim, one cannot have earned more than $1,000 in income for 14 or more consecutive days within the four-week benefit period of the claim. When submitting subsequent claims, one cannot have earned more than $1,000 in income for the entire four-week benefit period of the new claim.

Income Requirements

The $5,000 income includes:

  • all employment and self-employment income
  • tips declared as income
  • non-eligible dividends
  • honoraria (e.g., nominal amounts paid to emergency service volunteers)
  • royalties (e.g., paid to artists).
  • If not eligible for Employment Insurance, may also include maternity and parental benefits received from the Employment Insurance program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan.

Pensions, student loans and bursaries are not considered employment income and should not be included.

The $1,000 income includes:

  • employment and/or self-employment income
  • tips earned while working
  • non-eligible dividends
  • honoraria (e.g., nominal amounts paid to emergency service volunteers)
  • royalties (e.g., paid to artists)

However, royalty payments received from work that took place before the period for which a person applies for the Canada Emergency Response Benefit do not count as income during that specific benefit period. Pensions, student loans and bursaries are not employment income and therefore, should not be included in the $1000.

Application

Application can be done through the following:

  • CRA My Account
  • My Service Canada
  • automated phone service, by calling 1-800-959-2019 or 1-800-959-2041. Phone services will be available 21 hours per day, 7 days per week and will be closed from 3:00 a.m. – 6:00 a.m. EST.

You will be required to apply over the phone if you have only filed tax returns in the calendar years prior to 2018. However, if you have never filed a tax return with the CRA and you would like to apply, you will need to call 1-800-959-8281.

You can either apply for the Benefit through Service Canada or the Canada Revenue Agency, but not both. Separate applications must be made for each four week period for which eligibility requirements are met.

Before you apply, ensure your direct deposit and mailing information is up to date with the CRA through your My CRA Account. You can also securely update your direct deposit information with the CRA through your bank, credit unions or trust companies.

Payment

Payments will be made through direct deposit or by cheque; however direct deposit is faster. There is no waiting period so benefits are received within 10 days of applying. Payments will be retroactive to the date of eligibility.

Canada Emergency Student Benefit

This economic support measure provides individuals with a taxable benefit of $1,250 ($2,000 for those with dependents or disabilities) every 4 weeks for up to 16 weeks. In order to qualify, individuals must be eligible students or new graduates who are not eligible for the Canada Emergency Response Benefit or Employment Insurance and who are unable to work due to COVID-19.

The Canada Emergency Student Benefit (CESB) program provides temporary financial support to eligible post-secondary students, and recent post-secondary and high school graduates who are not eligible for the CERB or EI and are unable to work due to COVID-19.

The program provides a payment of $1,250 for each 4-week period for a maximum of 16 weeks within the eligibility period from May to August 2020. Additional support of $750 (for a total of $2,000) for each 4-week period is available for those with disabilities or dependents.

Eligibility Periods

The four eligibility periods are:

  • May 10 to June 6, 2020
  • June 7 to July 4, 2020
  • July 5 to August 1, 2020
  • August 2 to August 29, 2020

Each eligibility period must be applied for separately. The number of eligibility periods that can be applied for depend on whether you are a graduating or post-secondary student or a graduating high school student.

Post-secondary students

The CESB is available to eligible post-secondary students, post-secondary graduates, and students who have recently left their post-graduate studies. The four eligibility periods above are available for post-secondary students. Application can begin during the May 10 to June 6 eligibility period.

Graduating high school students

The CESB is only available to eligible students who:

  • completed or expect to complete high school, or received, or expect to receive their high school equivalency in 2020
  • applied for a post-secondary educational program that starts before February 1, 2021

The high school completion date determines the eligibility periods that can be applied for. The high school completion date must be before the start of the first eligibility period being applied for. For example, if the high school completion date is between May 10 and June 6, application can be made for the three eligibility periods beginning on June 7, July 5, and August 2.

Additional Support

Additional support of $750 for each 4-week period is available for individuals who have a disability or who have at least one child under the age of 12 or other dependants and who meet all of the conditions for the $1,250 subsidy. This additional support would bring the total payment to $2,000 for each 4-week period.

Taxable

The CESB is taxable. Any amounts received from the CESB must be reported on next year’s income tax return. You will receive a T4A tax slip for the amount of CESB you receive. The tax slip will also be available in your CRA My Account for the 2020 tax year. If you repay the CESB before December 31, 2020, the CRA won’t include the amount you’ve repaid on your T4A slip.

Eligible Entities

Eligible entities are individuals who are students or recent graduates.

Eligibility

To qualify for the CESB, an individual must meet all of the following conditions:

  • must be a Canadian citizen, permanent resident, registered Indian, or a protected person*
  • have not applied, received, nor qualify, for the CERB or EI benefits for the same eligibility period
  • must be studying in Canada or abroad
  • must meet one of the following conditions:
    • is enrolled in a recognized post-secondary educational program (at least 12 weeks in duration) that leads to a degree, diploma, or certificate;
    • have completed or ended post-secondary studies in December 2019 or later; or
    • have completed or expect to complete high school, or received, or expect to receive high school equivalency in 2020, and have applied for a post-secondary educational program that starts before February 1, 2021.

Eligibility for Benefit Top-up

To qualify for the CESB benefit top up of an extra $750 for each 4-week period, an individual must meet all of the above conditions and meet at least one of the following conditions:

  • have a disability;
  • have at least one child under the age of 12 or other dependants.

disability is any impairment, including a physical, mental, intellectual, cognitive, learning, communication or sensory impairment — or a functional limitation — whether permanent or episodic in nature, or evident or not, that, in interaction with a barrier, hinders a person’s full and equal participation in society.

dependant is any of the following:

  • a child (adopted child, stepchild, or foster child) who is under 12 years old and is completely dependent on the student, student’s spouse, or common-law partner for support, care, and upbringing
  • a person with a disability who is completely dependent on the student, student’s spouse, or common-law partner for support, care, and upbringing

Recognized post-secondary institutions

Recognized post-secondary institutions are:

 

*A protected person is an individual who is recognized by the Immigration and Refugee Board of Canada (IRB) and Immigration Refugees and Citizenship Canada (IRCC) as a person in need of protection.

Application

Application opens on May 15 and must be made before September 30, 2020. Application days are spread out (similar to CERB) based on birth month and whether the applicant is a recent graduate, or a post-secondary student.

You can only apply for one eligibility period at a time. If your situation continues, you must re-apply for another 4-week eligibility period.

Application can be done through the following:

  • CRA My Account
  • My Service Canada
  • automated phone service, by calling 1-800-959-2019 or 1-800-959-2041. Phone services will be available 21 hours per day, 7 days per week and will be closed from 3:00 a.m. – 6:00 a.m. EST.

If you have never filed a tax return with the CRA and you would like to apply for the CESB, you will need to call 1-800-959-8281 to register your social insurance number (SIN) in advance of applying or setting up direct deposit.

Before you apply, ensure your direct deposit and mailing information is up to date with the CRA through your My CRA Account.

Payment

Payments will be made through direct deposit or by cheque; however direct deposit is faster. There is no waiting period so benefits are received within 10 days (for cheques) and 3 business days (for direct deposit) of applying. Payments will be made in respect of 4-week periods.

Canada Work Sharing Program Enhancements

This is an existing program that has been temporarily enhanced for COVID-19 relief to help businesses who introduce work-sharing arrangements through reduced hours of work. The program provides EI benefits to workers who agree to reduce their normal working hours for hours not paid by employers.

Work-Sharing (WS) is a program that helps employers and employees avoid layoffs when there is a temporary decrease in business activity beyond the control of the employer. The program provides Employment Insurance (EI) benefits to eligible employees who agree to reduce their normal working hours and share the available work while their employer recovers. Work-Sharing is an agreement between employers, employees and the Government of Canada that allows Canadian businesses to keep employees under part-time hours when there is a temporary decrease in business activity beyond the control of the employer.

Temporary special measures – COVID-19

  • Extension of the maximum possible duration of an agreement from 38 week to 76 weeks
  • Mandatory cooling off period has been waived for employers who have already used the Work-Sharing program so that eligible employers may immediately enter into a new agreement
  • Reduce the previous requirements for a recovery plan to a single line of text within the application form
  • Reduce the requirement and expand eligibility to employers affected by accepting business who have been in business for only 1 year rather than 2, and eliminate the burden of having to provide sales/production figures at the same time
  • Expand eligibility for staff who are essential to recovery, Government Business Enterprises (GBEs) and non-for-profit organization employers

Eligible Entities

The Work Sharing program is available to the following entities:

  • private business
  • publicly held company
  • Government Business Enterprise (a public corporation)
  • not-for-profit organization

Eligibility

Eligible employers

To be an eligible employer, a business must meet the following:

  • business has been in operation for at least one year;
  • must be a year-round business in Canada;
  • must have at least two employees in a workshare unit
  • workshare unit reduces hours of work by 10 to 60 per cent

Your business is not eligible for WS if it is experiencing a reduction in business activity due to:

  • a labour dispute
  • a seasonal shortage of work, or
  • the decrease in business activity is due to a recent increase in the size of the workforce

And if you are a:

  • shareholder who is responsible for the direction of the company and who holds 40% and more of the voting shares
  • employer who operates solely for the purpose of carrying out the administration of a government program/activity that is purely government in nature (such as municipalities, Government Agencies, etc.), or
  • self-employed
Eligible employees

To be eligible for WS, employees must:

  • be year-round, permanent, full-time or part-time employees needed to carry out the day-to-day functions of the business (your “core staff”)
  • be eligible to receive EI benefits, and
  • agree to reduce their normal working hours by the same percentage and to share the available work

Eligibility is also extended to:

  • employees considered essential to the recovery and viability of the business can now be eligible to participate in Work-Sharing (such as technical employees engaged in product development, outside sales agents, marketing agents, etc.)

Employees that are not eligible for WS include:

  • seasonal employees and students hired for the summer or a co-op term
  • employees hired on a casual or on-call basis, or through a temporary help agency
  • employees responsible for the direction of the company and who hold more than 40% of the voting shares in the business, or
  • self-employed

Application

Employers are now requested to submit their applications 10 calendar days prior to the requested start date. The streamlined measures undertaken by Service Canada will aim to reduce the processing time to 10 calendar days. Prior to COVID-19, employers were requested to send their Work-Sharing application (and supporting documentation) 30 calendar days prior to their requested start date.

To apply for the Work-Sharing program, employers must submit:

Applications should be sent to one of the following email addresses, based on the area a business is located or where the maximum of participants are located:

Atlantic Provinces

Email: ESDC.TP-ATL-WS-TP.EDSC@servicecanada.gc.ca

Quebec

Email: QC-DPMTDS-LMSDPB-TP-WS-GD@servicecanada.gc.ca

Ontario

Email: ESDC.ON.WS-TP.ON.EDSC@servicecanada.gc.ca

Western Canada and Territories

Email: EDSC.WT.WS-TP.ESDC@servicecanada.gc.ca

Canada Summer Jobs Program Enhancements

This is an existing program that has been temporarily enhanced for COVID-19 relief to help employers who employ youth (aged 15 to 30 years) by providing a 100% wage subsidy for eligible youth placements.

Canada Summer Jobs Program (CJSP) is an existing program that provides a wage subsidy to eligible employers for hiring youth aged 15 to 30 years. The program has been enhanced in response to COVID-19 such that all CJSP-funded employers:

  • will be eligible to receive a wage subsidy reimbursement of up to 100% of the provincial or territorial minimum hourly wage for hiring youth. Previously, private and public sector employers were only eligible to receive up to 50% of the provincial or territorial minimum wage.
  • may offer job placements between May 11, 2020 and February 28, 2021. Employers can offer part-time employment to youth who want to work during the academic year. Previously, all CSJ-funded positions had to be completed no later than August 28, 2020.
  • may offer part-time placements (for example, fewer than 30 hours per week). Previously, all CSJ-funded employment had to be full time (a minimum of 30 hours per week for at least 6 weeks).
  • will be provided the flexibility to amend project and job activities to support the delivery of critical services.

Eligible Entities

Eligible employers include those from:

  • private sector
  • public sector
  • not-for-profit organizations

Eligibility

In order to be eligible, employers must meet certain requirements, including:

  • provide ‘quality job placements’ for young people aged 15 to 30 years;
  • salary must respect minimum wage requirements in the province / territory;
  • private sector employers must have 50 or fewer full-time employees.

Application

Applications for this year’s CJSP closed in February 2020. Employment and Social Development Canada will work with Members of Parliament to identify organizations that provide essential services in the community and could provide youth jobs but did not apply for the Canada Summer Jobs program in 2020. These employers will be contacted to submit an application.

Applications may be submitted in several ways:

  • Online fillable application
  • grants and contributions on line services
  • by mail

Filing Deadlines & Payment Deadlines

These economic support measures allow Canadian taxpayers to defer certain filing due dates as well as to defer payments of certain obligations.

Filing – A corporate tax return (T2) filing is normally due six months after a corporation’s fiscal year end. The filing date for corporations that would otherwise have a filing due date:

  • after March 18 and before May 31, 2020: has been extended to June 1, 2020
  • on May 31, or in June, July, or August 2020: has been extended to September 1, 2020

This extension also applies to form T106, T1135, and any elections, forms and schedules that must be filed with the return.

Payment – Corporate tax balances and instalments under Part 1 of the Income Tax Act due on or after March 18 and before September 30, 2020 has been extended to September 30, 2020. Penalties and interest will not be applied if returns are filed and payments are made by September 30, 2020.

Individuals

Filing – The filing date for 2019 personal tax returns (T1) has been extended to June 1, 2020.

Payment The payment date for the 2019 personal tax return (T1) year has been extended to September 30, 2020.  Penalties (including late-filing penalties) and interest will not be applied if returns are filed and payments are made by September 30, 2020. This also applies to the June 15, 2020 and September 15, 2020 instalment payment for those who have to pay by instalments.

Self-Employed and their spouse or common-law partner

Filing – The filing date for 2019 personal tax returns (T1) is unchanged and remains June 15, 2020.

Payment – The payment date for the 2019 personal tax return (T1) year has been extended to September 30, 2020. Penalties (including late-filing penalties) and interest will not be applied if returns are filed and payments are made by September 30, 2020. This also applies to the June 15, 2020 and September 15, 2020 instalment payment for those who have to pay by instalments.

Payment – Payment dates for any GST/HST amounts (payments and remittances) that becomes owing from March 27 until the end of May have been extended until June 30. For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May.

Filing – The deadline for businesses to file their GST/HST returns is unchanged. Those who are able to, should continue to file their GST/HST returns on time reporting their net tax for the reporting period to help facilitate tax compliance and administration. However, recognizing the difficult circumstances faced by businesses, the CRA won’t impose penalties where a return is filed late provided that it is filed by June 30th.

All filing and payment dates related to payroll remain unchanged.

Trusts

Filing – The filing date for current tax year (including associated T3 information returns) for trusts with a December 31, 2019 tax year end has been extended to May 1, 2020. The filing date for current tax year (including associated T3 information returns) for trusts that would otherwise have a filing due date in:

  • April or May: has been extended to June 1, 2020
  • June, July, or August: has been extended to September 1, 2020

Payment – The payment date for the current tax year has been extended to September 30, 2020. This applies to income tax balances and instalments due on or after March 18 and before September 30, 2020. Penalties and interest will not be applied if returns are filed and payments are made by September 30, 2020. This also applies to the Part XIII remittance requirement associated with income paid or payable to non-resident beneficiaries.

Charities

The filing date for charities with Form T3010 due between March 18, 2020 and December 31, 2019 tax year end has been extended to December 31, 2020.

Part XIII Non-resident Tax

Filing – The filing date for 2019 NR4 information returns has been extended to May 1, 2020.

Payment – The payment dates remain unchanged at the 15th of each month following an amount paid or credited by residents of Canada to non-residents.

Partnerships

The filing date for 2019 T5013 Partnership information returns has been extended to May 1, 2020.

Other information returns, elections, designations and information requests – extended to September 1, 2020

Unless otherwise noted, applies to other information returns, elections, designations and information requests that are due.

Penalties and interest will not be applied if information returns, elections, designations, and information requests are filed and payments are made by September 1, 2020.

The waiver of penalties and interest for 2019 T1 individual returns and trust returns described above also applies to form T1135 and any elections, forms and schedules that must be filed with the return, provided that they are filed by September 1, 2020.

For 2019 T2 corporate returns, the extension of the filing deadline applies for all purposes. In particular, the extension also applies to form T106, T1135, and any elections, forms and schedules that must be filed with the corporate return.

Filing an objection

The filing date for any objection request due March 18 or later is extended until June 30, 2020.

Specific Exclusions

The following are specifically excluded from relief measures:

  • Form T661, Scientific Research and Experimental Development (SR&ED)
  • Form T2038(IND), Investment Tax Credit (Individuals)
  • Form T2 Schedule 31, Investment Tax Credit – Corporations
  • any prescribed forms, receipts, documents or prescribed information related to these three forms.

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