COVID-19 Update - Government Measures

The COVID-19 pandemic is resulting in an overwhelming amount of anxiety for everyone, especially those that are self-employed, currently unable to work and have no access to Employment Insurance (EI).

This situation is evolving rapidly.  We will continue to provide you with updates as additional information become available.

This week so far has provided the following new and updated measures:

Canada Emergency Response Benefit (CERB):

The government has proposed to put in place a CERB to replace the Emergency Care and Support Benefit announced last week.

Who is eligible for the CERB?

  • Contract workers and self-employed individuals who would not be eligible for EI.
  • Workers that lose their income as a result of the COVID-19.  This includes those who have lost their job, are sick, quarantined or taking care of someone with COVID-19.
  • Parents who must stay home without pay to care for children that are sick or at home because of school and daycare closures.
  • Workers that are still employed (and not officially laid off) but are not receiving income because of disruptions to their work due to COVID-19. 

The CERB is a taxable benefit of $2,000 per month for up to four months.  The CERB would be paid every four weeks and is currently available for the period from March 15, 2020 to October 3, 2020.

In order to qualify for the CERB, you must have had $5,000 in employment income, self-employment income or maternity/parental benefits in the 12 month period preceding application. 

Individuals will be able to complete their applications online or via an automated telephone line beginning in early April (April 6 is the expected start date).  You can expect to begin receiving payments within 10 days of submitting your application (via direct deposit or later if by mail). 

For those who have already applied for EI and are currently waiting for their application to be processed, your claim will automatically be transferred to this benefit. 

Temporary Wage Subsidy for Employers: 

The taxable wage subsidy will allow employers to reduce the amount of payroll deductions required to be remitted to Canada Revenue Agency (CRA).  Eligible employers include non-profit organizations, registered charities and Canadian-controlled private corporations with taxable capital less than $15 million.  Legislation was passed yesterday to update eligible employers to now include individuals and partnerships whose members include individuals, Canadian-controlled private corporations (CCPC) or charities.   

To claim the subsidy, the taxpayer must have an existing business number and payroll program account with the CRA as of March 18, 2020 and pay salary, wages, bonuses or other remuneration to an employee.  If a business doesn’t pay employees during the applicable period, March 18, 2020 to June 20, 2020, it does not qualify for the subsidy.  

The subsidy is equal to 10% of remuneration paid between March 18, 2020 and June 20, 2020, up to $1,375 per employee to a maximum of $25,000 per employer.  An employer can claim the subsidy by reducing the current remittance of federal, provincial or territorial income tax that is sent to the CRA.  The subsidy can’t be used to reduce CPP contributions or EI premiums. You could continue reducing future income tax remittances, up to the maximum of $25,000, for all remuneration paid before June 20, 2020 even if the remittance is in respect to remuneration paid after June 20, 2020.  

Ontario Economic and Fiscal Update:

In addition to spending directed toward COVID-19, the Ontario government released the following proposed measures for businesses and individuals:

  • Temporary increase to the Employer Heath Tax (EHT) exemption to $1 million retroactive to January 1, 2020.  The exemption would return to its current level of $490,000 on January 1, 2021;
  • Allowing employers to defer Workplace Safety and Insurance Board (WSIB) premiums, penalty and interest free for up to six months;
  • Tax filing and remittance deadlines will remain the same.  However, beginning April 1, 2020, there will be a five-month penalty and interest relief period for select provincially administered taxes for a missed filing or remittance deadline;
  • Creation of a new 10% refundable corporate income tax credit, titled Regional Opportunities Investment Tax Credit (ROITC) for Canadian-controlled private corporations that construct, renovate or acquire commercial and industrial buildings in designated regions of the province after March 25, 2020.  The tax credit would be available for expenditures in excess of $50,000 and up to a limit of $500,000;
  • Setting electricity prices for time-of-use customers at the lowest rate 24 hours a day for 45 days;
  • Providing opportunity for municipalities to provide property tax deferrals by deferring the upcoming quarterly (June 30) remittance of Education Property Tax to school boards for 90 days;
  • Delaying the planned 2021 property tax reassessments, such that 2021 values would be based on the valuation effective for the 2020 tax year; 
  • Starting April 1, 2020, doubling the Guaranteed Annual Income System maximum payment to $166 per month for individuals and $332 per month for couples for six months for low income seniors;
  • Providing six months of OSAP loan and interest accrual relief; and
  • Providing families with a one-time $200 payment per child up to age 12, and $250 per child with special needs for public and private school and daycare closures during COVID-19.  

Do not hesitate to contact us if you have any questions.

NOTE:  Due to the rapidly evolving changes with respect to the Government’s Economic Response Plan to Covid-19, please understand that any posts written in the past may not be reflective of the current applicable obligations, rights and benefits of individuals and businesses.