Summary of How to Apply for the Federal Government COVID-19 programs including information on various subsidies and benefits for businesses and individuals.
- CEWS: The Canada Emergency Wage subsidy. The 75% wage subsidy program. Available to businesses the 10% Temporary Wage Subsidy program, available to employers that do not qualify for the CEWS.
- CERB: The Canada Emergency Response Benefit. The $500 (initially $2000) weekly benefit for 16 weeks. Available to employees.
- CEBA: Canada Emergency Business Account. Through your bank it provides up to $40,000 for small businesses and not-for-profits, interest free with up to $10,000 forgivable.
- CECRA: Canada Emergency Commercial Rent Assistance. To be provided to Landlords in order to allow them to forgo rent for the period from April to June 2020.
1. CEWS: Canada Emergency Wage Subsidy, How to Apply
On April 11, 2020, the Federal Government enacted legislation to implement the Canada Emergency Wage Subsidy (CEWS) — a 75% wage subsidy program — to encourage employers to rehire workers previously laid off.
Most employers, except for certain tax-exempt entities and certain defined public institutions (and partnerships in which such an entity is a direct or indirect member), are eligible for the CEWS if their revenues have declined 15% in March, 30% in April and May 2020, as compared to a prior reference period.
The CEWS program also provides a 10% Temporary Wage Subsidy program, which may be available to employers that do not qualify for the CEWS. See CEWS details by clicking here.
How to Apply: by clicking on the CRA’s My Business Account Portal. Just follow that link and work through the steps to register. You are also going to be able to access the CEWS through “sign in partners” from the above web page. These sign in partners are most of the financial institutions in Canada.
You will apparently be able to apply for CEWS through the portal, even if you don’t already have a CRA My Business Account by using your online banking login credentials for your online banking provider.
2. Temporary 10% Wage Subsidy: How to Apply
This program allows almost all small business employers who have a business number to reduce their payroll deduction remittance to CRA by 10% of their wages from March 18 to June 19, 2020. There is a maximum of $25,000 available per employer. See FAQ’s here for more details.
How to get this subsidy is simple. Just take 10% of each employee’s gross wages to a maximum of $1375 for each employee during the total period and deduct it from your regular payroll withholding remittance to the CRA.
The example give is:
You pay 5 eligible employees monthly salaries of $4,100 for a total monthly payroll of $20,500. Your wage subsidy for the month will be 10% of $20,500, or $2,050.
For the three-month period, if all your payroll information remains the same in each month, you will pay $61,500 of remuneration. Therefore, 10% of the remuneration you pay in the three-month period is $6,150.
Since this amount is below the maximum allowable amount of $6,875 ($1,375 x 5 employees), your total wage subsidy for the three-month period will be $6,150.
3. CEBA: Canada Emergency Business Account, How to Apply
The Canada Emergency Business Account provides an interest-free loan of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs. To qualify a small business will need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019. If qualified, the small business will receive $40,000 directly from their own bank, the loan is interest free until December 31, 2022 and if $30,000 is repaid by then the remaining $10,000 will be forgiven. Details of the program can be found by clicking here.
How to Apply is through the small business owners own bank or credit union. Simply logon to your online banking and look for the CEBA application button. Click on it and answer the simple questions and provide the total employment income from line 14 of your 2019 T4 summary. Approval is almost immediate unless the system is overload, which is happening periodically.
4. CERB: Canada Emergency Response Benefit, How to Apply for Employees
This is a taxable benefit of $2000 ($500/ week) for 16 weeks payable to eligible employees who have lost their jobs due to COVID-19. In order to apply you are required to have a CRA My Account which you can register for by clicking here. If you already have a CRA My Account, the funds will be deposited in your bank account in 2 or 3 days.
See details and How To Apply for CERB by clicking here.
5. Canada Emergency Commercial Rent Assistance, How to Apply
For small businesses this program will seek to provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), May, and June. The Implementation of this program will require a partnership between the federal government and provincial and territorial governments, because they are responsible for property owner-tenant relationships.
As of April 16, 2020, No details as to how you access this program have yet been provided. We will hopefully have the details on applying for this program, soon…
Has your business been affected by the COVID-19 crisis? Our monthly and catchup accounting and bookkeeping services can help keep your books current, which is a requirement for many of these government assistance program. Schedule a free consultation with our team.