COVID-19 Updates to CERB, CEWS, CEBA and CSJP

Additional details were released this week with respect to the Canada Emergency Response Benefit (CERB), the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Business Account (CEBA).  In addition, new measures were released for the Canada Summer Jobs Program (CSJP). 

CERB

The eligibility criteria for the $2,000 per month CERB has been revised. In determining whether you have the minimum income of $5,000 within the last 12 months or in the 2019 calendar year, the types of income has been expanded to include non-eligible dividends (i.e. dividends paid out of corporate income taxed at the small business rate).

The Canada Revenue Agency (CRA) also has a questions and answers page available here: https://www.canada.ca/en/services/benefits/ei/cerb-application/questions.html.

CEWS

As of yet, no legislation has been released and therefore some of the details are still unknown.  However, the Government has provided further flexibility for eligible employers to access the CEWS with the following updates:

• Rather than having to experience a decline of 30% or more in revenues for the month of March 2020, eligible employers now only need to experience a drop in revenue of at least 15%;
• Eligible employers can compare revenues for each eligible period to an average of January 2020 and February 2020 rather than the previous year over year comparison.  However, whatever method is chosen must be used for the entire duration of the CEWS program;
• Revenues can now be calculated on an accrual basis or cash basis, but not a combination, and whatever method is chosen must be used for the entire duration of the program;
• The amount of wage subsidy received by the employer in a given month would be ignored for the purpose of measuring changes in revenues;
• The table below outlines each claiming period, the required reduction in revenues and the reference period for eligibility:

• Employers that engage in artificial transactions to reduce revenues for the purpose of claiming the CEWS will be subject to a penalty equal to 25% of the value of the subsidy received in addition to a repayment of the amount claimed;
• To ensure that the CEWS applies as intended, the Government will consider implementing an approach to coordinate access to the various programs but also to limit duplication.  This could include a process to allow individuals rehired by their employer during the same eligibility period to cancel their CERB claim and repay that amount;
• Eligibility of an employee’s remuneration will be limited to employees that have not been without remuneration for more than 14 consecutive days in the eligible period.  This rule replaces the previous requirement that an employer would not be eligible to claim the CEWS for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the CERB;
• The Government acknowledges the difficulties that charities and not-for-profit organizations will have in measuring the decrease in revenues and will provide further guidance;
• The CEWS program has been expanded to include a 100% refund of employer paid portion of CPP, EI, QPP and QPIP for employees on leave with pay throughout the week but do not perform any work for their employer in that week.  There will not be a weekly maximum for this aspect and employers would be eligible for this at the same time as the CEWS;
• Employers are required to continue to withhold and remit the applicable employer and employee contributions by the due date.  Eligible employers who are also interested in the expanded CEWS program, would apply for a refund at the same time as they apply for the CEWS;
• EI benefits received by employees through a Work-Sharing program with their employers will reduce the benefit that the employer is entitled to receive under the CEWS;
• Please refer to our April 2, 2020 release for details on eligible employers and weekly maximums for the CEWS available here: http://www.srcllp.com/covid19update_4.html

CEBA

Certain financial institutions are up and running now for eligible businesses to apply for an interest free loan of $40,000 that was noted in our last release.  Please see the following link to Scotiabank’s website for additional details on how this program will work: https://www.scotiabank.com/ca/en/personal/scotia-support/latest-updates/business-banking/small-business/supporting-our-customers-is-our-top-priority.html?cid=S1eRELIEF0420-002    

CSJP

The CSJP provides wage subsidies to employers to create opportunities for people aged 15 to 30.  The Government has temporarily expanded this program to subsidize up to 100% of the provincial or territorial minimum hourly wage for each employee up from the previous limit of 50%.

Employment though the CSJP typically runs until the end of August, but will be extended until February 28, 2021, and employment can also be part-time to qualify.

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.