Update on COVID-19 financial measures

Further to our blog posting from yesterday, here is an update concerning financial relief measures enacted by the Government of Canada and announced by the Province of Ontario.

Government departments and agencies are scrambling to implement programs to aid those who find themselves out of work due to the impact of the COVID-19 pandemic, and for businesses particularly small and medium size enterprises in various industry sectors.

Understandably the initial program response announced late last week has been revamped considerably in an attempt to simplify eligibility, streamline delivery and increase access to financial assistance.

In brief, the previously announced Emergency Care Benefit and Emergency Support Benefit programs have been replaced with the CANADA EMERGENCY RESPONSE BENEFIT (CERB) program.  The House of Commons has passed the requisite legislation to implement CERB, introduce an additional one-time payment under the GST/HST program, provide eligible small employers with a temporary wage subsidy and other measures.   Royal Assent making these provisions the law was just announced.

The estimated cost of the new program has swelled from an estimated $ 27 Billion to $ 52 Billion.

If you have questions about these measures, we’re here to help!  Please contact any of the partners or managers of the firm (listed under the “Team” tab on our website and they will do their utmost to get you the answers you need.

CANADA EMERGENCY RESPONSE BENEFIT (CERB)

CERB will provide financial assistance to wage earners, contract workers and the self-employed whether they are Employment Insurance (EI) eligible or not, who find themselves in one of the following situations:

  • They have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19
  • Working parents who must stay home without pay to care for children who are sick at home or are home because school and daycare centres are closed.
  • Workers who are still employed, but are not receiving income because of work disruptions due to COVID-19

To be eligible you must be a worker who ceases working for 14 consecutive days within the four week period in respect of which you are applying for assistance, and that during this cessation period you may not receive employment or self employment income, EI benefits, certain provincial allowances related to care of new born children or for the purposes of an adoption or other income yet to be prescribed.

The portal to access the CERB program is expected to be available on April 6th with payments flowing within 10 days.  The benefits would be paid every four weeks from March 15, 2020 until October 3, 2020 and be paid at a monthly amount of $ 2,000.

If you are currently receiving EI regular or sickness benefits at this time, you should not apply to the CERB program.  If however your EI benefits end before October 3, 2020 and you are still unable to work due to COVID-19, you can apply for benefits under CERB.

TEMPORARY WAGE SUBSIDY FOR EMPLOYERS

As outlined in our previous messages this program will provide a subsidy equal to 10% of wages paid for a 3-month period to a maximum amount of $ 25,000 per business with a cap of $ 1,375 per employee.

Corporations eligible for the small business deduction, individual employers, certain partnerships, non-profit organizations and registered charities will be eligible for this subsidy. 

The subsidy can be accessed by reducing source deduction payments otherwise required of the employer.  Source deductions contributed by the employee will continue to be required to be remitted.

ONTARIO ANNOUNCEMENT

The Ontario Government made a number of fiscal announcements to help the Province deal with the effects of the COVID-19 virus.  The spending initiatives will increase the provincial deficit from $ 10 Billion to $ 20 Billion for the 2020-2021 fiscal year.

 Some of the key measures in this announcement included the following:

  • Parents will receive a one-time cash payment of $ 200 for every child under 12.  This amount is increased to $ 250 if the child is disabled
  • New OHIP fee codes will be introduced allowing physicians to help patients over the phone and online
  • Healthcare spending for equipment will be increased
  • Long-term care facilities will receive funding to increase screening and safety protocols
  • OSAP loan repayments will be suspended until September 30th
  • Collection of most Provincially administered taxes are being suspended for five months.  Readers should take note that Corporate and Personal income taxes are administered by the Federal government and hence are subject to the relaxed provisions announced by the Canada Revenue Agency last week
  • WSIB payments can be deferred for six months
  • Relief will be provided to certain consumers by reducing electricity costs for 45 days by extending the hours of Off-Peak pricing
  • The education portion of property taxes due June 30th can be deferred to September 30th if requested by municipalities
  • Approximately 57,000 employers will be exempted from the proposed increase in Employer Health Tax Premiums
  • A new corporate tax credit will be introduced, called the Regional Opportunities Investment Tax Credit, for regions where employment growth is lagging

Once again Hendry Warren LLP are committed to supporting our clients to guide them through these difficult times.  As we learn more about these initiatives or become aware of additional programs, we will provide you with an update through email blasts and postings on our website. Please contact us to discuss how these measures may help you and your business. We are here for you.

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