Canada Emergency Response Benefit and EI

The Canada Emergency Response Benefit (CERB) is a taxable benefit that provides $2,000 a month for up to four months for workers who lose income as a result of the pandemic due to job loss, illness, quarantine, caring for others (including children) and work disruption.

Canadian workers qualify whether or not they are eligible for EI.

Applications open online and by phone on April 6, with payments to arrive within five days for direct deposits and within 10 days for cheques by mail.

More information is available at www.canada.ca/coronavirus-CERB

Benefits for workers who applied for employment insurance (EI) on or after March 15 will mirror CERB payments for the first 16 weeks.

That means Canadians who would have received EI benefits below the $2,000-per-month threshold will now be bumped up to the maximum payment. Those who would normally qualify for more than $500 per week in employment insurance (the maximum benefit is $573 per week) will instead receive the CERB payment of $2,000.

EI-eligible workers will still qualify for their usual benefits, whether lower or higher than $2000-per-month, after the four-month CERB period.

Canadians who were already receiving EI will continue to do so and need not apply to the CERB, but can switch to the program if their EI benefits end before October if they remain jobless due to Covid-19.

Those applying for EI sickness benefits are no longer required to provide a medical certificate.

Measures for businesses

• Wage subsidies

The Canada Emergency Wage Subsidy is a federal benefit designed to help businesses cover up to 75% of wages and keep their employees on payroll.

The benefit will pay 75% of the first $58,700 normally earned by employees, up to $847 per week. The subsidy is expected to last for three months — retroactive from March 15 to June 6. The government said the funds will start to flow around early May.

Employers who can show their revenues have fallen by at least 30% in March, April or May compared to the same month last year will be eligible. Employees receiving the benefit cannot apply for other unemployment benefits.

Organizations that don’t qualify for the Canada Emergency Wage Subsidy may still qualify for the previously announced wage subsidy of 10%.

Employers can apply for the wage benefit through the Canada Revenue Agency’s My Business Account portal. More information about the subsidy is available here.

The work-sharing program — whereby employees whose hours get reduced by an average of 10% to 60% can claim employment insurance for lost wages — has been extended to 76 weeks from 38.

• Business loans

Loans for businesses are being offered through the Business Credit Availability Program (BCAP), which is providing $65 billion of support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Those agencies are providing credit through banks.

The Canada Emergency Business Account mandates government-guaranteed bank loans of up to $40,000 for small businesses. The loans will be interest-free for the first year and up to $10,000 can be waived for repayment. Businesses must demonstrate they paid between $50,000 and $1 million in total payroll in 2019.

These programs are available now through businesses’ current financial institutions. Read advice from tax experts on accessing loans and other measures businesses can take.

Other measures for individuals

• Canada Child Benefit

The maximum annual CCB payment amount will increase for the 2019-20 benefit year by $300 per child as part of the May payment. The average increase for families will be approximately $550.

• RRIFs

The minimum withdrawal rate for RRIFs has dropped by 25% for 2020. A similar decrease will apply to those receiving variable benefit payments under defined-contribution pension plans.

• Tax filing deadline

The filing deadline for individuals is now June 1. For trusts with a taxation year ending on Dec. 31, 2019, the filing deadline is now May 1. Individuals and businesses that owe taxes can defer payments until September. The Canada Revenue Agency has also halted debt collection.

Those who expect to receive the GST credit and/or Canada Child Benefit (CCB) should file their returns as soon as possible to ensure their entitlements for the 2020-21 benefit year are properly determined.

• GST credit

Those eligible for the GST credit will receive a one-time special payment of about $400 for singles and $600 for couples on April 9. More information about eligibility here.

• Student loans

Payments are paused from March 30 until Sept. 30, with no accrual of interest.