Canada’s COVID-19 Emergency Response Benefit Plan
Support for Businesses
The Government of Canada is taking action to help Canadians and Businesses facing hardship as a result of the COVID-19 outbreak. The Canadian German Chamber of Industry and Commerce Inc. offers its support to your business, to access the program that is right for you and your employees.
Work Sharing-Program
The Work-Sharing Program is a program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity beyond the employer’s control. It is a tripartite agreement between the employer, the employee and Service Canada.
The employer must find himself in a situation of a temporary reduction in the normal level of business activity that is beyond his control in order to be eligible for the Work Sharing Program.
The employee must be eligible for Employment Insurance (EI) benefits. He or she has to agree to a reduced schedule of work and has to share the available work over a specified period of time while the employer recovers.
Depending on the normal income Service Canada will then pay up to 55 % of the lost income.
The maximum duration of the Work Sharing-Program was extended from 38 weeks to 76 weeks and the mandatory waiting period was waived. Employers are requested to submit their applications 10 calendar days prior to the requested start date.
Flexibility of Businesses Filing Taxes
All businesses may defer, until after 31 August 2020, the payment of any income tax amounts that become owing on or after 18 March 2020 and before September 2020.
No interest or penalties will accumulate on these amounts during this period.
The Canada Revenue Agency (CRA) will not contact any small or medium businesses (SME) to initiate any post assessment GST/HST or Income Tax audits for the next four weeks.
Business Credit Availability Program
Through this program, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will provide more than 10 Billion CAD in direct lending and other types of financial support at market rates to businesses with viable business models whose access to financing would otherwise be restricted.
Support for Canadian Workers
The Canada Emergency Response Benefit (CERB) covers Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.
The CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for EI.
The Canada Emergency Response Benefit will be accessible through a secure web portal starting in early April. Applicants will also be able to apply via an automated telephone line or via a toll-free number.
Grant of Temporary Wage Subsidy for Employees
The government provides employees of eligible employers, who recorded a drop in revenues of at least 30 % from its businesses carried on in Canada, with a wage subsidy for up to twelve weeks, retroactive to 15 March 2020, hence until 6 June 2020.
Revenue is calculated for three periods using the employer’s normal accounting method, and excludes revenues from extraordinary items and amounts on account of capital. Period one lasts from 15 March to 11 April 2020. Period two goes and from 12 April to 9 May 2020 and period three goes from 10 May to 6 June 2020. The reference period for the drop in revenues for each period is, year-over year, the calendar month in which the period begins.
Eligible employers include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non-profit organizations and registered charities.
The wage subsidy granted is the greater of 75 % of the remuneration paid up to a maximum of 847 CAD per week per employee and the amount of remuneration paid, up to a maximum benefit of 847 CAD per week or 75 per cent of the employee’s pre-crisis weekly remuneration, whichever is less.
Eligible remuneration may include salary, wages, and other remuneration but does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.
Application for the Canada Emergency Wage Subsidy is possible through the Canada Revenue Agency’s My Business Account portal as well as through a web-based application.
Organizations that do not qualify for the Canada Emergency Wage Subsidy may qualify for the previously announced wage subsidy of 10 per cent of remuneration paid from March 18 to before June 20, 2020.