Blog Post
Canadian Benefits For Business Owners
27 Oct 2020
Updates on Canadian Benefits For Business
NEW BENEFIT: Canada Emergency Rent Subsidy (CERS)
UPDATE: Canada Emergency Business Account (CEBA)
UPDATE: Canada Emergency Commercial Rent Assistance (CECRA)
UPDATE: Canada Emergency Wage Subsidy (CEWS)
NEW BENEFIT: Canada Emergency Rent Subsidy (CERS)
Based on the news release on October 9, 2020 – Department of Finance Canada
OVERVIEW:
The new benefit, Canada Emergency Rent Subsidy (CERS), will provide support rent and mortgage support until June 2021 for qualifying organizations affected by COVID-19. Claims can be made retroactively for the period beginning September 27, 2020 and ends October 24, 2020.
DETAILS:
- CERS replaces the Canada Emergency Commercial Rent Assistance (CECRA)
- CERS will provide simple and easy-to-access rent and mortgage support until June 2021 for qualifying impacted organizations.
- The rent subsidy:
- would be provided directly to tenants, while also supporting property owners (details to be announced).
- would support businesses, charities, and non-profits that suffered a revenue drop, by subsidizing a percentage of their expenses, on a sliding scale, up to a maximum of 65% of eligible expenses until December 19, 2020.
- Claims can be made retroactively for the period beginning September 27, 2020 and ends October 24, 2020.
- A 25% top-up in addition to the 65% subsidy for organizations temporarily shut down by a mandatory public health order.
- **Further details about CERS beyond December 19, 2020, will be provided by the government over the upcoming months. **
UPDATE: Canada Emergency Business Account (CEBA)
OVERVIEW:
An additional interest free loan of $20,000 (partially forgivable if repaid by December 31, 2022) will be accessible for eligible businesses and not-for-profits.
DETAILS:
- The additional CEBA loan would effectively increase CEBA loans to $60,000 from $40,000 for eligible businesses, of which a total of $20,000 would be forgiven if the balance of the loan is repaid before December 31, 2022.
- The application deadline for CEBA is being extended to December 31, 2020.
UPDATE: Canada Emergency Commercial Rent Assistance (CECRA)
**ENDING SOON: October 30 is the last day to apply**
OVERVIEW:
The last day to apply for the Canada Emergency Commercial Rent Assistance (CECRA) is October 30, 2020, which covers rent up till September 2020. Note that the 50% government loan is forgivable ONLY if the landlords comply with the program’s terms and conditions.
DETAILS:
Canada Emergency Commercial Rent Assistance (CECRA) aids small businesses that experience financial hardship due to COVID-19.
- If the rent of impacted small businesses reduced by 75% by the landlord (25% is forgiven by the landlord), then:
- tenants pay 25% of their rent
- government of ON and Canada share remaining 50% through a forgivable loan
- This program is ending soon and only covers rent up till September 2020. You can currently opt in for the months of July, August, and September (Deadline to apply: October 30, 2020).
**NOTE** Loans are forgiven ONLY if the landlords comply with the program’s terms and conditions, i.e. not try to recover rent payments for the agreed upon period from the small business tenant AFTER the program ends.
If rent has been collected, landlord must either refund the amount paid excess of 25% of rent OR apply the excess of 25% or rent to future rents (if agreed by the tenants).
LINK: https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business
UPDATE: Canada Emergency Wage Subsidy (CEWS)
Based on the news release on October 14, 2020 – Department of Finance Canada
Federal Government has announced an extension until June 2021. No details are provided currently.
OVERVIEW:
CEWS will be extended until June 2021 (further details to be provided). Until December 19, 2020, the maximum base subsidy rate will be 40 per cent and maximum top-up subsidy rate will remain at 25 per cent. As of September 27, 2020, the base and top-up subsidy will be determined by the change in eligible employer’s monthly revenues, and as of October 25, 2020, wage subsidy for furloughed employees would be aligned with benefits provided through Employment Insurance (EI).
DETAILS:
The parameters of the wage subsidy that are proposed below apply until December 19, 2020.
- Wage subsidy consists of:
- Base subsidy for all employers, whose revenues have been impacted by the pandemic
- A top-up subsidy for the hardest hit employers hit
- Proposed: the base subsidy rate for September 27, 2020 to October 24, 2020 continue to apply from October 25, 2020 to December 19, 2020.
- Maximum base subsidy rate: 40 per cent
- Maximum top-up subsidy rate: remain at 25 per cent
- The revenue-decline test for the base subsidy and top-up subsidy would be harmonized from September 27, 2020 onward.
- Base AND top-up would be determined by change in eligible employer’s monthly revenues, year-over-year, for either the current or previous calendar month.
- Employers using alternative revenue-decline test:
- base subsidy and the top-up subsidy would be determined by the change in an eligible employer’s monthly revenues relative to the average of its January 2020 and February 2020 revenues.
- As of October 25, 2020:
- Wage subsidy for furloughed employees would be aligned with benefits provided through Employment Insurance (EI).
- The weekly subsidy of an arm’s length employee (or a non-arm’s length employee who received pre-crisis remuneration for the relevant period) would be:
- The amount of eligible remuneration paid in respect of the week, OR
- If the employee receives remuneration of $500 or more in respect of the week, the greater of $500 and 55% of their pre-crisis remuneration, up to a maximum subsidy of $573.A technical backgrounder on the extended wage subsidy (including eligibility) will be issued by the government.
- The weekly subsidy of an arm’s length employee (or a non-arm’s length employee who received pre-crisis remuneration for the relevant period) would be:
- Wage subsidy for furloughed employees would be aligned with benefits provided through Employment Insurance (EI).
