In this update, we discuss the recently announced changes to the Federal relief programs:
- Introduction of Canada Emergency Wage Subsidy calculator
- Further support for students
- Assistance to cultural, heritage and sports organizations
- Further support for charitable and not-for-profit organizations
- Support for start-ups and young entrepreneurs
Canada Emergency Wage Subsidy (CEWS)
The CEWS portal is to open on April 27, 2020, and the first payments are to be made on May 4, 2020.
Applications will be made through the Payroll (RP) section of an employer’s My Business Account and, therefore, it is important that your business and direct deposit information is up to date.
Employers who have a registered representative can ask their representative to file the application on their behalf.
The CRA has developed an online tool, including a downloadable spreadsheet, at https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-calculate-subsidy-amount.html – to assist employers to calculate their subsidy.
To use the calculator, an employer must provide the following information:
• Total number of employees
• Gross payroll and eligible remuneration amounts, including the baseline remuneration, which is the average weekly remuneration paid between January 1 and March 15, 2020
• Refund of employer contributions for any employees on leave with pay
• Employees receiving a Work-Sharing benefit through Employment Insurance
• The amount the employer is eligible for under the 10% temporary wage subsidy program for the relevant claim period.
The CRA has noted that certain employers may be required to provide a full list of employees and their Social Insurance Numbers for verification after applying.
It is critically important that employers document their decrease in revenues and remuneration paid to employees.
Employers that determine the decline in revenue based on the accrual method must include the adjustments for accruals and deferrals that they normally record at their year-end, in the months covered by the subsidy claim.
Employers whose decline in revenues is close to prescribed eligibility percentages may want to ask their professional advisers to review or even opine on their calculations.
Support for students
Canada Emergency Student Benefit
The Canada Emergency Student Benefit (CESB) was introduced today:
- CESB is a benefit of $1,250 per month (or $1,750 per month for students with disabilities or taking care of others) from May to August 2020
- students who graduated in December 2019 or this year, as well as students who are enrolled now or will be enrolled for post-secondary education in the fall, and who are not eligible for CERB, will be eligible for the CESB
- the CESB benefit payments will start on May 1, 2020
Canada Student Service Grant
The Canada Student Service Grant (CSSG) will provide grants of between $1,000 to $5,000 to students who volunteer in programs related to COVID-19.
The amount of the grant will be based on the number of hours volunteered.
These grants can be earned in addition to the CESB.
The Federal government has provided further support for students:
- creation of 116,000 student jobs in addition to jobs covered by the Canada Summer Jobs program
- extension of scholarships and grants by one semester to enable graduates and fellows to continue their research that was scheduled to end between March and August 2020
- doubling of student grants for 2020/2021
- provide funding for Quebec, Northwest Territory, and Nunavut governments to fund their programs
These support measures are in addition to earlier measures to help students, including the following:
- automatic suspension of the federal and Ontario portion of student loan repayments and interest until September 30, 2020
- changes to the Canada Summer Jobs program, including increasing the subsidy from 75% to 100% of the provincial or territorial minimum hourly wages, and to extend the end date of employment under the program to February 28, 2021
Support for cultural, heritage and sports organizations
Canadian Heritage is to administer a new $500 million temporary emergency support fund established to meet the financial needs of cultural, heritage, and sports organizations facing significant losses due to COVID-19.
The fund will provide financial support consistent with other assistance measures in place such as the Canada Emergency Business Account.
Details on how the fund will be administered will be shared on the Canadian Heritage website.
Support for charitable and not-for-profit organizations
The federal government is to invest $350 million to national charitable and not-for-profit organizations that have the ability to get funds quickly to local organizations that serve vulnerable populations
It will support a variety of activities, such as:
- increasing volunteer-based home deliveries of groceries and medications
- providing transportation services, like accompanying or driving seniors or persons with disabilities to appointments
- scaling up helplines that provide information and support
- helping vulnerable Canadians access government benefits
- providing training, supplies, and other required supports to volunteers so they can continue to make their invaluable contributions to the COVID-19 response
- replacing in-person, one-on-one contact and social gatherings with virtual contact through phone calls, texts, teleconferences, or the internet
Support for start-ups and entrepreneurs
Innovative and early-stage businesses
Industrial Research Assistance Program (IRAP), which provides advice, connections, and funding to help Canadian small and medium-sized businesses increase their innovation capacity and take ideas to market, is to receive $250 million to assist such companies that are unable to access other COVID-19 business supports.
Futurpreneur Canada, which is a non-proﬁt organization that provides ﬁnancing, mentoring and support tools to aspiring business owners aged 18-39, is to receive $20.1 million to provide payment relief for up to 12 months for its clients who are facing challenges due to COVID-19.
Further details are coming on these programs.