Canada Emergency Response Benefit (CERB)
From the CRA: If you have stopped working because of COVID-19, the Canada Emergency Response Benefit (CERB) may provide you with temporary income support. The CERB provides $500 a week for up to 16 weeks.
Eligibility: If you had earned at least $5,000 in 2019 or in the 12 months prior to the date of their application; and you did not quit voluntarily.
Full CERB details: https://www.canada.ca/en/services/benefits/ei/cerb-application.html
Canada Emergency Business Account (CEBA)
A program for small businesses is CEBA, which is a $40,000 loan you apply for through your bank. It’s a quick application process and if you pay back $30,000 by December 31, 2022, the government will waive the last $10,000 owed. If you can’t pay it back, the amount owed turns into a 3 year term-loan with a 5% interest rate.
You’ll need a copy of your T4 summary for 2019 or your last fiscal year. To qualify, a business has to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019. The keyword there is payroll: the employees have to be on salary.
Visit your bank’s website to apply. It’s fairly simple – it took us 20 minutes to file and the money was received fairly quickly.
Canada Emergency Commercial Rent Assistance (CECRA)
For businesses that have shut down completely, they can work with their landlord for a rent subsidy, but a landlord has to apply for it. Details on this program are not available as of this publication but are expected soon.
From the CBC:
To be eligible for CECRA, a small business must have had revenue decline at least 70 per cent from pre-COVID-19 levels or have been forced to close by pandemic restrictions.
Under these conditions, landlords can be approved for rent relief, if they agree not to evict the tenants and cut their rent by 75 per cent for April, May and June.
Then landlords will receive half of the tenant’s rent from the government, paid directly to their mortgage lender.
CECRA can be used for commercial rents up to $50,000 a month; non-profit and charitable organizations are also eligible for assistance.
Canada Emergency Wage Subsidy (CEWS)
From the CRA: As a Canadian employer whose business has been affected by COVID-19, you may be eligible for a subsidy of 75% of employee wages (up to $847 per worker, per week) for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020 (this program looks like it will be extended).
If you want to know if you qualify, click here https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html
One way to qualify for CEWS is being able to show a reduction in business by 15% from March (over March 2019) and a reduction in business in April and May of 30%, either compared to the same months in 2019 or the average of January and February 2020.
One nuance often overlooked is that service businesses can choose to calculate the loss on a cash basis, not an accrual basis. This allows businesses to give their clients a little wiggle room for paying because they can count cash instead of billings to determine revenue.
You can apply now and the government will begin to process applications on May 4 with payments being received starting May 5.
If you are applying for this program, you want to make sure you are eligible. The government is penalizing anybody who takes advantage during the pandemic:
If you apply for the subsidy fraudulently, the business has to pay back 100% of the money they received. The person who signed up has to pay 225% personally and possibly five years in jail.
As always, if you have any questions, please give us a call or send an email.