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November 24th update:
The Senate of Canada has passed Bill C-9, the most recent COVID-19 relief bill, which will extend the Canada Emergency Wage Subsidy (CEWS) until June 2021, keeping the current subsidy rate maximum at 65 per cent of eligible wages until December 19, 2020. All businesses with a revenue decline will be eligible to apply.
A new commercial rent subsidy program has also been introduced. The Canada Emergency Rent Subsidy (CERS) will provide new rent and mortgage interest support to qualifying tenants and property owners until June 2021. The new CERS covers up to 65 percent of eligible expenses for businesses, charities, and non-profits that have been impacted by the pandemic. This includes rent, property taxes, insurance, and interest on mortgages for businesses until December 19. A provision in Bill C-9 that would require business owners to pay their rent before receiving the funding. For more information about the CERS, click here.
October 9th update:
Prime Minister Justin Trudeau announced today the official extension of the Canada Emergency Wage Subsidy (CEWS) to June 2021 as well as additional loans through the Canada Emergency Business Account (CEBA). A new rent relief program allowing businesses, specifically those that have been affected by COVID-19, to apply directly has also been announced.
The federal government has also updated the CEWS program, freezing the wage eligibility at 65 percent until December 19th. As for the CEBA, small businesses who can prove they have faced income losses specifically caused by COVID-19 can apply for additional loans of $20,000. It will be possible for $10,000 of those additional loans to be turned into forgivable loans if paid back by a certain date.
September 25th update:
The Trudeau government announced it is extending the federal wage subsidy until summer 2021. The extension of the Canada Emergency Wage Subsidy (CEWS) was framed as a means of creating one million jobs and returning employment to pre-pandemic levels. Details have still to be announced.
“The CEWS helped people keep their jobs, or be rehired if they had been laid off,” said Gov. Gen. Julie Payette, who read the speech from the throne on behalf of Prime Minister Justin Trudeau.
August 12th update:
An updated calculator has been made available on the CEWS website to help employers estimate what help they may receive from the next phase. After entering information about the situation of their business, an estimate of the subsidy they can expect to receive will be made. This calculator will also will help companies make informed decisions about retaining or rehiring workers.
May 20th update:
The Canada Emergency Business Account program is now available to a greater number of businesses. The CEBA will now be available to businesses with payrolls under $20,000 that are sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll. In order to qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:
- a business operating account at a participating financial institution
- a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return.
- eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.
May 15 Update:
The government of Canada will extend the Canada Emergency Wage Subsidy (CEWS) by three months to the end of August. More details to come.
April 17 Update:
The government of Canada will provide $500 million to Canadian Heritage for the arts and sports. Here is the official statement from the Department of Finance:
Cultural, Heritage and Sport Organizations
Canadian cultural, heritage and sport organizations are facing significant financial losses due to COVID-19. They have lost potential revenues from closed facilities or cancelled events. Meanwhile, they are facing challenges accessing Canada’s broader support measures such as the Canada Emergency Wage Subsidy because of unique seasonal revenues and costs.
The new COVID-19 Emergency Support Fund for Cultural, Heritage and Sport Organizations will provide $500 million to help address the financial needs of affected organizations within these sectors. The fund will be administered by Canadian Heritage via contribution agreements.
Support will be provided in a manner consistent with other COVID-19 supports such as the Canada Emergency Wage Subsidy and the Canada Emergency Business Account (CEBA).
April 16 Update:
Here are changes Canada Emergency Business Account: the threshold for eligibility has been changed: an organization would need to have a 2019 payroll between $20,000 and $1.5 million. Organizations must apply through their online Bank account.
April 14 Update:
On Saturday, the parliament and senate of Canada passed legislation for the $73 billion Canada Emergency Wage Subsidy to encourage organizations to rehire previously lay off workers and to keep workers on payroll. There are some changes and the full details have been updated here. Here are highlights of the changes:
- Eligibility: In order to provide certainty to employers, once an employer is found eligible for a specific period, the employer automatically qualifies for the next period. The earlier condition was that organizations had to applied each month to be eligible.
Calculating Revenues: An employer’s revenue for this purpose is its revenue in Canada earned from arm’s-length sources. Revenue is calculated using the employer’s normal accounting method, and exclude revenues from extraordinary items and amounts on account of capital. Employers are allowed to calculate their revenues under the accrual method or the cash method, but not a combination of both. Employers select an accounting method when first applying for the CEWS and require to use that method for the entire duration of the program. For registered charities and non-profit organizations, the calculation includes most forms of revenue, excluding revenues from non-arm’s length persons. These organizations are allowed to choose whether or not to include revenue from government sources as part of the calculation. Once chosen, the same approach applies throughout the program period.
The New Canada Emergency Business Account with a $40,000 loan guarantee came online as of Thursday, April 9. An organization can apply online through their bank account.
April 1 Update:
RE Wage Subsidy: Non-profits and charities are eligible. The subsidy would be based upon 30% decrease vs the same month in 2019 for March, April and May, and will be evaluated on a month by month basis. Consequently, organizations will need to apply each month. Organizations must apply in a new portal which will be available next week. The subsidy will be available 6 weeks after application.
- The Canada Emergency Wage Subsidy would apply at a rate of 75 per cent of the first $58,700 normally earned by employees – representing a benefit of up to $847 per week. The program would be in place for a 12-week period, from March 15 to June 6, 2020.
- Eligible employers who suffer a drop in gross revenues of at least 30 per cent in March, April or May, when compared to the same month in 2019, would be able to access the subsidy.
- Eligible employers would include employers of all sizes and across all sectors of the economy, with the exception of public sector entities.
- For non-profit organizations and registered charities similarly affected by a loss of revenue, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their circumstances. The government is also considering additional support for non-profits and charities, particularly those involved in the front line response to COVID-19. Further details will be announced in the near term.
- An eligible employer’s entitlement to this wage subsidy will be based entirely on the salary or wages actually paid to employees. All employers would be expected to at least make best efforts to top up salaries to 100% of the maximum wages covered.
- Those organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 10 per cent of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
More details in the press release from the Department of Finance.
The cost to the tax payers is costed at $71 Billion.
March 31 Update:
RE $40,000 loan: The government requires organizations to contact their financial institution. According to an account manager at RBC, the bank is working on an online portal to handle all applications for this loan which will be ready either tomorrow (April 1) or Friday (April 3). The only criteria is that the business or organization have spent at least $50,000 in payroll in 2019. The government will then verify this fact. RBC hopes the funds will then be available sometime next week.
Bill Morneau was expecting to speak today with more details about the 75% wage subsidy, but he later postponed it to Wednesday, April 1.
March 30 Update:
In his Monday address, Prime Minister Trudeau provided details on the 75% wage subsidy:
- Non-profits are eligible, as well as businesses of any size
- Organizations must has shown that they have experienced reduced revenues by 30%
- The 75% wage subsidy will cover up to $847 per week
In his Friday address (March 27) to Canadians, Prime Minister Justin Trudeau announced a 75% wage subsidy for qualifying small and medium-sized businesses for 3 months to help them survive the COVID-19 crisis and keep their workers on the payroll. This is an increase from the 10% subsidy previous announced, which was also available for non-profit organizations, and hopefully this 75% subsidy will also be extended to non-profits.
“This means that people will continue to be paid even though their employer has had to slow down or stop operations because of COVID-19,” he said. “We’re helping companies keep people on the payroll so that workers are supported and the economy is positioned to recover from this. That is our priority.”
The prime minister said more details will come over the weekend and the measure would be retroactive to March 15.
Trudeau also unveiled a new measure to help cash flow — the Canada Emergency Business Account — that will see banks offer $40,000 loans, which will be guaranteed by the government, for qualifying businesses. The loan will be interest-free for the first year and if certain conditions are met, $10,000 of it will be forgivable. This measure is available for non-profits. Here is the text from the government website:
The New Canada Emergency Business Account
We are launching the new Canada Emergency Business Account – a new loan program, that will be implemented rapidly by eligible financial institutions in cooperation with Export Development Canada (EDC).
This $25 billion program will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.
To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 per cent (up to $10,000).
Additional details on accessing this program will be available soon.
Update: According to an email from the Regroupement Loisir et Sport du Québec, the above measures are available to non-profit organizations as it was already approved by Parliament on Tuesday.
This is a developing story, and the article will be updated.
Keywords: artists, musicians, non-profits, charities
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