COVID-19: Federal Aid Update

On March 25, 2020 the Canadian Federal Government announced a $107 billion emergency response package for Canadians and businesses. The Crowe MacKay tax team summarizes how this will positively impact you.

News Story
| 3/18/2020

The global community is working together to prevent the spread of COVID-19 within our own communities. With the increase in social distancing, our daily routines have been impacted significantly. On March 18, the Federal Government first announced new economic measures that would be forthcoming in response to the COVID-19 crisis in an effort to stabilize the Canadian economy. 

In total, the Canadian Government has committed a $107 billion aid package to help Canadians and businesses across the country. These measures are being delivered as part of the Government of Canada’s COVID-19 Economic Response Plan.

The Federal Government’s COVID-19 Economic Response Plan can be found here.

Crowe MacKay specialists provide a summary below on how this Federal aid will positively impact Canadians and businesses.

Income and Support for Individuals

The Canada Emergency Response Benefit

On March 25, the Federal Government announced the new Canada Emergency Response Benefit (CERB), replacing the previously announced Emergency Care Benefit and Emergency Support Benefit. As of April 1, the Federal Government estimates that this program is an investment of $24 billion in the Canadian economy.

The CERB provides $2,000 per a four-week period ($500 per week) to individuals impacted by COVID-19.

You may receive the CERB for a maximum of 24 weeks and you must re-apply for it every four weeks.

You will not qualify for the CERB if you quit your employment voluntarily.

In order to qualify for the CERB:

  • You must be a Canadian resident aged 15 and older.
  • You must have earned at least $5,000 of total income from employment and/or self-employment, and/or certain employment insurance benefits (generally parental benefits) in 2019 or in the 12-month period leading up to your application. CRA has mentioned that income from non-eligible dividends should also count towards this $5,000 income requirement.
  • You have stopped working because of reasons related to COVID-19, or are eligible for Employment Insurance regular or sickness benefits, or have exhausted your Employment Insurance regular benefits between December 29, 2019 and October 3, 2020. 
  • You may still be working but cannot earn more than $1,000  of employment or self-employment income for 14 or more consecutive days within the four-week period of your first claim.  For subsequent claims, you cannot earn more than $1,000 of employment or self-employment income for the entire four-week benefit period of your new claim.
  • You did not quit your job voluntarily

Application Process

  • The CERB will be available beginning April 6. 
  • Apply for the CERB through Service Canada or through your CRA My Account, but not both. You can also apply for the CERB via telephone.
  • If you have applied for Employment Insurance already, you do not need to apply for the CERB.
  • After you submit your application, you will need to confirm you unemployment status every four weeks to continue to receive the CERB. 

The Federal Government has asked that Canadians abide by the following application schedule, organized by the month you were born in.

If you have a birthday in:

 January, February, March                      Apply on Mondays
 April, May, June                      Apply on Tuesdays 
 July, August, September                      Apply on Wednesdays
 October, November, December                      Apply on Thursdays 
 Any month                      Fridays, Saturdays, and Sundays

Payment

The benefit will be paid by direct deposit or by cheque. If you select the direct deposit option you can expect your funds in three to five days (recommended). If you select the cheque option, you can expect your funds in approximately 10 days.

Learn how to prepare for your CERB application here

Seasonal Workers

If you are a seasonal worker who has exhausted your EI benefits and expecting an upcoming seasonal job that will not be offered due to COVID-19, you may now be eligible for the CERB.

Artists

If you are an artist you are allowed to collect royalty payments for copyrighted works produced before March 1, 2020 while collecting the CERB.

Find an FAQ on the CERB here

Employment Insurance

If you were recently laid off or have reduced hours and qualify for Employment Insurance benefits, you can apply here.

If you are sick, quarantined or have been directed to self-isolate, the Government is waiving the requirement to provide a medical certificate to access EI sickness benefits. In addition, the one-week waiting period to claim EI sickness benefits is temporarily waived for those individuals in imposed quarantine.

Apply as soon as possible after you stop working. Do not wait for your record of unemployment.

If you have a new regular or sickness EI claim starting March 15, 2020 or after, your benefits will be delivered as part of the CERB. If you have recently applied for EI regular or sickness benefits, do not re-apply for the CERB. Your application will automatically be assessed to determine if you are eligible for the CERB.

Apply for Employment Insurance sickness benefits here.

Income Support for Low and Modest-Income Families

Goods and Services Tax Credit

The Federal Government is providing a one-time special payment through the Goods and Services Tax credit (GSTC), doubling the maximum annual GSTC payment amounts for the 2019-20 benefit year.

The average payment for those applicable individuals will be close to $400 for single individuals and close to $600 for couples.

You do not need to apply for this benefit. If you are eligible you will automatically receive it.

Canada Child Benefit

The Federal Government is also proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts for the 2019-20 benefit year by $300 per child. The overall increase for families receiving CCB will be approximately $550 on average; these families will receive an extra $300 per child as part of their May payment. If you have previously applied for the CCB you do not need to re-apply.

Find more information on the CCB, how to apply, and eligibility here

The proposed enhancements of these two credits can give a single parent with two children and low to modest income nearly $1,500 in additional short-term support.

In addition, the Federal Government announced they will be increasing the CCB for the 2020-2021 year. This results in a raise to the maximum benefit to $6,765 per child under age 6, and $5,708 per child aged 6 through 17.

Income Support to Vulnerable Groups

Indigenous Peoples

$305 million in funding will be provided for a new distinctions-based Indigenous Community Support Fund to address immediate needs in First Nations, Inuit, and Métis Nation communities. Find more information and how to apply for the Indigenous Community Support Fund here.

$100 million of funding will be provided to support a range of federal health measures, including support for preparedness in First Nation and Inuit communities. 

Vulnerable Groups

The Federal Government is also providing assistance to those who need it most:

  • Providing $100 million to national, regional, and local organizations across Canada to transport and distribute food and other basic necessities safely across the country. Organizations receiving this funding include, but are not limited to: Food Banks Canada, Salvation Army, Second Harvest, Community Food Centres Canada, and Breakfast Club of Canada. 
  • Providing the Reaching Home initiative with $157.5 million to continue to support people experiencing homelessness.
  • Supporting women and children fleeing violence, by providing up to $50 million to women’s shelters and sexual assault centres. This includes funding for facilities in Indigenous communities.
  • Giving $7.5 million in funding to Kids Help Phone to provide young people with the mental health support they need during this difficult time.
  • Investing $350 million to support vulnerable Canadians through charities and non-profit organizations that deliver essential services to those in need. The funds will flow through national organizations that have the ability to get funds quickly to local organizations that serve vulnerable populations.
  • The Federal Government will be working with provinces and territories through a new transfer to cost-share a temporary top-up to the salaries of workers deemed essential in the fight against COVID-19, for those who make less than $2,500 a month. Details as to the application and delivery of this measure will be released shortly following further work with provinces and territories. 
Support for Students & Recent Graduates 

Canada Emergency Student Benefit

The Canada Emergency Student Benefit (CESB) provides financial support to post-secondary students and recent post-secondary and high school graduates who are unable to find work due to COVID-19.

This benefit is for students who are not eligible for the CERB or EI.

From May to August 2020, the CESB provides a payment to eligible students of:

  • $1,250 per month for eligible students; or
  • $2,000 per month for eligible students with dependents or disabilities

Applications for the CESB open on May 15.

Find more information on the CESB eligibility and the application process here.

Loan Deferrals

All student loan borrowers will automatically have their loan repayments and interest suspended until September 30, 2020.

Students do not need to apply for the repayment pause.

This moratorium applies to the federal portion of student loans. Borrowers should check with their provincial or territorial student loan provider to see if payment is required on the provincial or territorial portion.

Enhancing Student Financial Assistance for Fall 2020

To address additional financial needs of students caused by the COVID-19 pandemic, the Federal Government proposes to change the Canada Student Loan Program’s (CSLP) eligibility requirements in 2020-21 to allow more students to qualify for supports and be eligible for greater amounts, including doubling the non-repayable Canada Student Grants for full and part time students, as well as for students with disabilities and students with dependents, in the coming academic year. 

  • Eligible full-time students can receive up to $6,000
  • Eligible part-time students can receive up to $3,600 

The Canada Student Grants for Students with Permanent Disabilities and Students with Dependents would also be doubled.
The CSLP is delivered in collaboration with 10 participating jurisdictions. Students in Quebec, Northwest Territories and Nunavut do not receive CSLP support as these jurisdictions run their own student financial assistance programs. Additional compensation will be offered to provinces and territories that do not participate in the CSLP.

In addition, to ensure students can continue their studies in the upcoming fall semester, the Federal Government will:

  • Broaden eligibility for student financial assistance by removing the expected student’s and spouse’s contributions in 2020-21, recognizing that many students and families will struggle to save for school this year.
  • Enhance the CSLP by raising the maximum weekly amount that can be provided to a student in 2020-21 from $210 to $350.
  • Increase existing distinctions-based support for First Nations, Inuit, and Métis Nation students pursuing post-secondary education by providing an additional $75.2 million in 2020-21.
  • Extend expiring federal graduate research scholarships and postdoctoral fellowships, and supplement existing federal research grants, to support students and post-doctoral fellows, by providing $291.6 million to the federal granting councils. Funding would support a one-semester extension for eligible students whose research scholarships or fellowships end between March and August 2020 and who intend to continue their studies. It would also provide a three-month extension in funding for holders of federal research grants to support eligible trainees and staff paid out of these awards. These extensions cannot be combined with other income supports.
  • The Federal Government also intends to enhance work opportunities for graduate students and post-doctoral fellows through the National Research Council of Canada with an investment of $7.5 million.

Canada Student Service Grant: I Want to Help

The new Canada Student Service Grant, will help students gain valuable work experience and skills while they help their communities during the COVID 19 pandemic. For students who choose to do national service and serve their communities, the new Canada Student Service Grant will provide up to $5,000 for their education in the fall.

More details will be made available on the I Want to Help platform over the coming weeks, including more detailed information about eligibility, the levels of funding available under the grant, how to apply for a national service position, and how applications will be assessed.  

Canada Summer Jobs Program

To support students who are preparing to enter the work force this summer, the Federal Government has committed $263 million in funding for the Canada Summer Jobs program. This will support up to 70,000 job placements for youth 15 to 30 years of age.

The temporary changes to the program in response to COVID-19 for the 2020 year include:

  • an increase to the wage subsidy, so that private and public sector employers can also receive up to 100% of the provincial or territorial minimum hourly wage for each employee;
  • an extension to the end date for employment to February 28, 2021;
  • allowing employers to adapt their projects and job activities to support essential services; and
  • allowing employers to hire staff on a part-time basis.

The Canada Summer Jobs call for applications for the 2020 season closed on February 28, 2020. In response to the economic impacts created by the COVID-19 situation, Members of Parliament will work to identify organizations that provide essential services in the community and could provide youth jobs but did not apply for the Canada Summer Jobs program in 2020.

Job placements could begin as early as May 11, 2020, and end as late as February 28, 2021.

Youth will be able to search for jobs available in their communities through the Job Bank website and app.

Supporting Students Through Expanded Student & Youth Programming

 The government is creating and connecting students to meaningful employment and service opportunities, with:

  • $153.7 million for the Youth Employment and Skills Strategy to help youth develop the skills and gain the experience they need to successfully transition into the labour market. Funding will support a range of measures in high-demand sectors such as agriculture, technology, health and essential services, creating over 6,000 additional job placements.
  • $80 million for the Student Work Placement Program to support up to 20,000 post-secondary students across Canada to obtain paid work experience related to their field of study.
  • $15 million for the Supports for Student Learning Program to serve an additional 14,700 youth through support to complete high school and transition to post-secondary education in order to help ensure that vulnerable children and youth do not become further marginalized as a result of COVID-19.
  • Additional support for the Canada Service Corps to expand support for meaningful youth service projects that have positive impacts in communities across Canada, including increasing the number of microgrants from 1,800 to 15,000, and providing stipends to participants.
  • $40 million to Innovation, Science and Economic Development to support Mitacs in order to create 5,000 new job placements. The Business/Higher Education Roundtable (BHER) will also create a further 5,000 to 10,000 new student placements, by reorienting existing federal support and building online tools.

International Students

The Government of Canada will remove the restriction that allows international students to work only a maximum of 20 hours per week while classes are in session, provided they are working in an essential service or function, such as health care, critical infrastructure, or the supply of food or other critical goods.

International students and their employers should consult Public Safety and Emergency Preparedness Canada's Guidance on Essential Services and Functions in Canada during the COVID-19 Outbreak to determine if the work the student is doing would allow them to work more than 20 hours per week during the academic session. This temporary rule change will be in place until August 31, 2020.

 
Support for Seniors

Registered Retirement Income Funds

The required minimum withdrawals from Registered Retirement Income Funds (RRIFs) have been reduced by 25% for 2020. This will provide flexibility to seniors that are concerned that they may be required to liquidate their RRIF assets to meet minimum withdrawal requirements.

One-Time Tax-Free Payments

An additional financial support of $2.5 billion will be provided to seniors in the form of a one-time tax-free payment of $300 for seniors eligible for the Old Age Security (OAS) pension, with an additional $200 for seniors eligible for the Guaranteed Income Supplement (GIS). This measure would give a total of $500 to individuals who are eligible to receive both the OAS and the GIS, and will help them cover increased costs caused by COVID-19.

*Eligible seniors do not need to apply for this support, it will be distributed automatically by the Federal Government.

Temporarily Extending GIS and Allowance Payments

If seniors’ 2019 income information has not been assessed their GIS and Allowance payments will be temporarily extended. This will ensure that the most vulnerable seniors continue to receive their benefits when they need them the most. To avoid an interruption in benefits, seniors are encouraged to submit their 2019 income information as soon as possible and no later than by October 1, 2020.

Supporting the Delivery of Items and Personal Outreach

The Federal Government is contributing $9 million through United Way Canada for local organizations to support practical services to Canadian seniors. These services could include the delivery of groceries, medications, or other needed items, or personal outreach to assess individuals' needs and connect them to community supports.

Providing Essential Services

An additional investment of $20 million to the New Horizons for Seniors Program will support community-based organizations to provide immediate and essential services to seniors impacted by COVID-19. These activities can include:

  • supporting seniors in staying connected with their community and family by providing electronic devices, virtual activities and remote tutorials;
  • supporting the delivery of food and medication to self-isolated seniors at home;
  • assisting seniors to undertake essential activities, such as visits to the doctor;
  • assisting community organizations to provide the types of support above, including hiring staff to replace a loss of volunteerism due to the outbreak;
  • providing information to seniors regarding how to care for themselves during the pandemic.
Mortgage Support

Banks in Canada have affirmed their commitment to working with customers to provide flexible solutions, on a case-by-case basis, for managing through hardships caused by the COVID-19 pandemic. This includes permitting lenders to defer up to six monthly mortgage payments (interest and principal) for impacted borrowers. Contact your financial institution directly to inquire on flexibility for a mortgage deferral. 

Please see our Support for Business section below for some of the business financing and loan measures that have already been announced.

Mortgage Default Management Tools

The Canada Mortgage and Housing Corporation (CHMC) and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty. These include payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.

Canada's mortgage insurers are committed to providing homeowners with solutions to mitigate temporary financial hardship related to COVID-19. This includes permitting lenders to defer up to six monthly mortgage payments (interest and principal) for impacted borrowers. Deferred payments are added to the outstanding principal balance and subsequently repaid throughout the life of the mortgage.

The Federal Government, through the CMHC, is providing increased flexibility for homeowners facing financial difficulties to defer mortgage payments on homeowner CMHC-insured mortgage loans. CMHC will permit lenders to allow payment deferral beginning immediately. 

Tax Filing and Payment Extensions

The COVID-19 Economic Response Plan also contains several measures that should help Canadians better manage their affairs for the upcoming tax filing and payment deadlines.

Administrative income tax actions required of taxpayers by the CRA that are due after March 18, 2020, can be deferred to June 1, 2020, unless otherwise noted.  These administrative income tax actions include corporation and charity returns, information returns, elections, designations and information requests.  However, payroll deductions payments and all related activities are excluded.

The filing deadline for 2019 income tax returns for individuals has been deferred until June 1, 2020. Any new income tax balances due, or instalments, may also be deferred until after August 31, 2020 without incurring interests or penalties.

Objections

Any objections related to Canadians' entitlements to benefits and credits have been identified as a critical service and will continue to be processed during the COVID-19 crisis. As a result, there should not be any delays in processing these objections.

For objections related to other tax matters filed by individuals and businesses, the CRA is currently holding these accounts in abeyance and no collection action will be taken with respect to these accounts during this period of time.

For any objection request due March 18 or later, the deadline is effectively extended until June 30, 2020.

Flexibility for Taxpayers
  • For individual tax returns, the normal filing due date of April 30 will be deferred until June 1, 2020.

The CRA encourages individuals who expect to receive benefits under the GSTC or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined. 

  • The tax filing deadlines for partnerships and for NR4 information returns are all extended to May 1, 2020. 
  • The tax filing deadline for trusts with a tax year-end date of December 31, 2019 is extended to May 1, 2020 while the tax filing deadline for trusts that would otherwise have a filing due date in April or May is extended to June 1, 2020.
  • The payment of any income tax amounts owing on or after March 18, 2020 and before September 2020, are not due until after August 31, 2020
  • This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period. 
  • Effective immediately the CRA will recognize electronic signatures as having met the signature requirements of the Income Tax Act, as a temporary administrative measure. This provision applies to authorization forms T183 or T183CORP, which are forms that are typically signed in person by millions of Canadians every year to authorize tax preparers to file taxes. 
Flexibility in Filing Taxes for Businesses
  • The payment of any income tax amounts owing on or after March 18 and before September 2020 are not due until after August 31, 2020.
  • This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
  • The tax filing deadlines for corporations are all extended to June 1, 2020. This applies to corporations that would otherwise have a filing due date after March 18 and before June 1.

Canada Pension Plan/Employment Insurance (CPP/EI) appeals to the Minister

Taxpayers wanting to file an appeal in relation to CPP/EI rulings decisions are encouraged to do so through My Account to avoid potential delays.  The CPP/EI appeals program is currently only actioning appeals that are related to cases where EI benefits are pending and these cases will be treated on a priority basis. All other appeals will be actioned when normal services resume.

In addition, the CPP/EI Appeals to the Minister program will exercise discretion on a case by case basis when additional time is required to respond to a request.

Deferral of Sales Tax Remittance and Customs Duty Payments

The Federal Government is deferring Goods and Services Tax/Harmonized Sales Tax (GST/HST) remittances and customs duty payments to June 30, 2020.

GST/HST Remittance Deferral

To support Canadian businesses in the current extraordinary circumstances, the Minister of National Revenue will extend until June 30, 2020 the time that:

  • GST/HST Monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods;
  • GST/HST Quarterly filers have to remit amounts collected for the January 1 through March 31, 2020 reporting period; and
  • GST/HST Annual filers, whose GST/HST return or instalment are due in March, April, or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.
Deferral of Customs Duty and Sales Tax for Importers

Payment deadlines for statements of accounts for March, April, and May are being deferred to June 30, 2020.

Suspending Audit Activities and Collections on New Debt

The CRA will not initiate contact with taxpayers for audits, with certain exceptions, This includes:

  • no new audits being launched, and
  • no requests for information related to existing audits.

No audits should be finalized and no reassessments should be issued.

Collections activities on new debts will be suspended until further notice, and flexible payment arrangements will be available.  Payment arrangements are also available on a case-by-case basis if you can’t pay your taxes, child and family benefit overpayments, Canada Student Loans, or other government program overpayments in full.

Banks and employers do not need to comply or remit on existing requirements to pay during this time.

Taxpayer relief requests

Taxpayers who are unable to file a return or make a payment by the tax-filing and payment deadlines because of COVID-19 can request the cancellation of penalty and interest charged to their account. Penalties and interest will not be charged if the new deadlines that the government has announced to tax-filing and payments are met.

Support for Business

Canada Emergency Wage Subsidies

On April 1, 2020, the Federal Government announced additional details on the $73 billion Canada Emergency Wage Subsidy (CEWS)program for employers impacted by COVID-19. The details announced so far for this program are summarized below.

The Federal Government will cover up to 75% of each employee’s salary on the first $58,700 that they earn this year or up to $847 per week.

The program is effective for a 24-week period, from March 15 to August 29, 2020.

Applications will open for the CEWS on April 27.

Eligibility

Eligible employers will include employers of all sizes and across all sectors of the economy, with the exception of public sector entities.

Eligible employers will include Individuals, taxable corporations, and partnerships consisting of eligible employers as well as non profit organizations and registered charities.

The Federal Government recently made regulatory changes (see below) to prescribe certain types of organizations in order to extend eligibility for the CEWS to additional groups, provided they meet all other eligibility criteria:

  • Partnerships that are up to 50% owned by non-eligible members;
  • Indigenous government-owned corporations that are carrying on a business and are tax-exempt and their wholly-owned subsidiaries that are carrying on a business and are tax-exempt;
  • Partnerships where the partners are Indigenous governments and eligible employers; 
  • Registered Canadian Amateur Athletic Associations;
  • Registered Journalism Organizations; and
  • Non-public colleges and schools, including institutions that offer specialized services, such as arts schools, driving schools, language schools, or flight schools.

Public bodies will not be eligible for this subsidy. These include municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals, except where noted above.

A business’ revenue has to have decreased by at least 15% for the month of March and by at least 30% for the months of April, May, and June This reduction is determined by comparing revenue to one of two benchmarks:

1. Compare March, April, May, and June 2020 revenues to revenues from those same months in 2019.

OR

2. Compare March, April, May, and June 2020 revenues to the average revenues of January and February of 2020. 

Please see the calculating revenue section below for more details.

Regulatory Changes

The prescribed organizations described below may now begin applying for the CEWS, provided they meet all other eligibility criteria.

Partnerships with One or More Non-Eligible Members

Currently, in order for a partnership to be eligible for the CEWS, all of its members must be eligible entities (generally, individuals, taxable corporations, non-profit organizations, or registered charities). As a result, partnerships in which non-eligible entities hold even a minority interest are currently precluded from claiming the CEWS.

Partnerships will be eligible entities for purposes of the CEWS so long as non-eligible members, taken together, do not hold a majority of the interests in the partnership. Specifically, in order for a partnership to qualify for the CEWS, the fair market value of interests in the partnership held by non-eligible entities at all times in the qualifying period must not exceed 50% of the fair market value of all interests in the partnership.

This change is retroactive to April 11, 2020, which means that it applies to the first qualifying period starting March 15, 2020, and subsequent qualifying periods.

Indigenous Government-Owned Businesses

Currently, in order for Indigenous government-owned corporations to be eligible for the CEWS, they must be taxable. The Federal Government is extending eligibility for the CEWS to include Indigenous government-owned corporations that are carrying on a business and are tax-exempt under paragraph 149(1)(d.5) of the Income Tax Act, as well as their wholly-owned subsidiaries that are carrying on a business and are tax-exempt under paragraph 149(1)(d.6) of the Income Tax Act. As well, partnerships where each partner of the partnership is either an Indigenous government or an eligible employer will be eligible entities for purposes of the CEWS. This rule is in addition to the rule for partnerships outlined above. Indigenous governments would include First Nation bands, self-governing Indigenous governments and other comparable Indigenous governing bodies.

This change is retroactive to April 11, 2020, which means that it applies to the first qualifying period starting March 15, 2020 and subsequent qualifying periods.

Registered Canadian Amateur Athletic Associations  

Registered Canadian Amateur Athletic Associations (RCAAAs) are national associations responsible for the promotion of sport on a nation-wide basis, and are heavily involved in the preparation of Canada’s Olympic teams. There are approximately 125 RCAAAs in Canada, including Hockey Canada, Lacrosse Canada, and Biathlon Canada.

Because provincial, regional, and local members of an RCAAA are considered non-profit organizations, they are eligible for the CEWS. However, the national-level RCAAAs are currently excluded because they fall under a category of tax-exempt entity that is not explicitly included in the list of eligible entities for the CEWS.

The Federal Government is extending CEWS eligibility to national-level RCAAAs that are tax-exempt under paragraph 149(1)(g) of the Income Tax Act.

This change is retroactive to April 11, 2020, which means that it applies to the first qualifying period starting March 15, 2020 and subsequent qualifying periods.

Registered Journalism Organizations

Canadian journalism organizations generally qualify for support under the CEWS. However, non-profit Canadian journalism organizations that register as qualified donees under the new “registered journalism organization” category would be ineligible for the CEWS. This is because this new category of tax-exempt entities is not explicitly included in the list of eligible entities for the CEWS.

To address this discrepancy, the Federal Government is extending eligibility for the CEWS to registered journalism organizations that are tax-exempt under paragraph 149(1)(h) of the Income Tax Act.

This change is retroactive to April 11, 2020, which means that it applies to the first qualifying period starting March 15, 2020, and subsequent qualifying periods.

Non-public Educational and Training Institutions

The Federal Government will allow private colleges and private schools to be eligible entities for purposes of the CEWS. This will allow non-public educational and training institutions to qualify for the wage subsidy. This would include for-profit and not-for-profit institutions such as arts schools, language schools, driving schools, flight schools, and culinary schools.

This change is retroactive to April 11, 2020, which means that it applies to the first qualifying period starting March 15, 2020.

Proposed Legislative Changes

The Government also intends to propose legislative amendments to ensure that the CEWS continues to meet its objectives. These proposed changes are explained below. They would come into effect upon being enacted.

Support for Seasonal Employees and Employees Returning from Extended Leave

Under the CEWS, the subsidy amount for a given employee on eligible remuneration paid in respect of the period between March 15 and June 6, 2020 is the greater of:

  • 75% of the amount of remuneration paid in respect of a week, up to a maximum benefit of $847 per week; and
  • the amount of remuneration paid in respect of a week, up to a maximum benefit of $847 per week, or 75% of the employee's pre-crisis weekly remuneration, whichever is less. The pre-crisis remuneration for a given employee is based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration.

In effect, employers may be eligible for a subsidy of up to 100% of the first 75% of pre-crisis wages or salaries of existing employees. These employers would be expected where possible to maintain existing employees' pre-crisis employment earnings. 

In addition, a special rule applies to employees that do not deal at arm's length with the employer. The subsidy amount for such employees is limited to the eligible remuneration paid in respect of any week in a qualifying period, up to a maximum benefit of the lesser of $847 per week and 75% of the employee's pre-crisis weekly remuneration. In effect, the subsidy is available in respect of non-arm's length employees only for those employed prior to March 16, 2020.

These rules can lead to unintended outcomes in some situations, such as when employees were on parental, disability, or unpaid leave from January 1 to March 15 of 2020, or when individuals – whether dealing at arm’s length or non-arm’s length with their employer – are employed on a seasonal basis. To bridge these gaps, the Government proposes to amend the CEWS to allow employers to choose one of two periods when calculating the baseline remuneration of their employees. Specifically, employers would be allowed to calculate baseline remuneration for an employee as the average weekly remuneration paid to the employee from January 1 to March 15 of 2020 or, alternatively, as the average weekly remuneration paid to the employee from March 1 to May 31 of 2019, in both cases excluding any period of seven or more consecutive days without remuneration. Employers would be able to choose which period to use on an employee-by-employee basis.

This change is proposed to be retroactive to April 11, 2020, which means that it would apply to the first qualifying period starting March 15, 2020 and subsequent qualifying periods.

Amalgamations

Corporations formed on the amalgamation of two or more predecessor corporations (or where one corporation is wound up into another) may not qualify for the CEWS since they would not have benchmark revenues to prove a revenue decline or their benchmark revenues may not provide a full picture of their pre-crisis revenues.

The Government proposes to amend the CEWS to allow corporations formed on an amalgamation of two or more predecessor corporations (or where a corporation is wound up into another), to calculate benchmark revenue for the CEWS revenue-decline test using their combined revenues, unless it is reasonable to consider that one of the main purposes for the amalgamation (or the winding up) was to qualify for the CEWS.

This change is proposed to be retroactive to April 11, 2020, which means that it would apply to the first qualifying period starting March 15, 2020 and subsequent qualifying periods.

Tax-Exempt Trusts

Under the current rules, trusts are eligible for the CEWS, as they are generally considered to be individuals for tax purposes. The Government proposes to amend the CEWS to better align the tax treatment of trusts and corporations for CEWS purposes. As a result, trusts with employees would continue to be eligible for the CEWS, subject to the following added exceptions:

  • In cases where the trust is a tax-exempt entity (other than a public institution), it would qualify only if it is a registered charity or one of the other types of eligible tax-exempt entities.
  • In cases where the trust is a public institution, it would qualify only if it is a prescribed organization.

This change is proposed to apply in respect of the third qualifying period (May 10 to June 6) and any subsequent qualifying period.

Calculating Revenues

In determining eligibility for the CEWS, an employer’s revenues would be those from its ordinary activities carried on in Canada earned from the sale of goods, the rendering of services, and the use by others of its resources.  Revenues would be calculated using the employer’s normal accounting method (either the accrual or cash method – but not both) and would exclude amounts from extraordinary items and amounts on account of capital.

Initially, the Federal Government indicated that revenue amounts derived from non-arm’s length parties would not be included in revenues for the purposes of the CEWS.  However, the new legislation now provides some exceptions.

The legislation now allows a group of affiliated entities to calculate consolidated revenue, with each member of the group then using these consolidated amounts for the purposes of the revenue test. The new legislation also provides a special rule such that where all or substantially all of an employer’s qualifying revenue is earned from non-arm’s length entities, the employer may determine its decline in revenue based on the decline in arm’s length revenue experienced by non-arms entities from which it earned revenue.  And for a group of eligible entities that normally prepares consolidated financial statements, each member of the group may determine its qualifying revenue separately, provided that every member of the group determines its qualifying revenue on that basis.

These special rules and exceptions are introduced with the intent to provide the CEWS to businesses with employees employed by a separate entity or corporate group. 

For non-profits and registered charities, revenue calculations must exclude those received from non-arm’s length persons. These organizations can choose whether or not to include funding from government sources in their calculations. Once chosen, the same approach will apply throughout the duration of the CEWS program.

Amount of Subsidy

The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020, will be the greater of:

  • 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
  • the amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of the employee’s pre-crisis weekly remuneration, whichever is less.

As described above, employers may be eligible for a subsidy of up to 100% of the first 75% of pre-crisis wages or salaries of existing employees, and such employers will be expected where possible to maintain their existing employees’ pre-crisis employment earnings. The subsidy will also be available for salaries and wages paid to new employees.

The subsidy for a new hire is 75% of the amount of remuneration paid, up to a maximum of $847 per week per employee.

The pre-crisis remuneration for a given employee would be based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration.

Eligible remuneration may include salary, wages, and other remuneration such as fees, commissions, or other amounts for employment services. These are amounts for which employers would generally be required to withhold or deduct amounts to remit to the Receiver General as payroll taxes. However, eligible remuneration does not include severance pay, retiring allowances, or items such as stock option or certain other taxable benefits. In addition, accelerated remuneration paid in excess of an employee’s base salary, with the main purpose of increasing the amount of the CEWS paid, will not be eligible.

A special rule will apply to employees that do not deal at arm’s length with the employer, such as owner-managers, family corporations, and professional corporations. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75% of the employee’s pre-crisis weekly remuneration. The subsidy will only be available in respect of non-arm’s length employees employed prior to March 15, 2020.  That is, the CEWS is not available for renumeration paid to non-arm’s length employees hired after the COVID-19 crisis began.

There will be no overall limit on the subsidy amount that an eligible employer may claim and employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.

Refund for Certain Payroll Contributions

The Government expands the CEWS by introducing a new 100% refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. This refund would cover 100% of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim for the CEWS for those employees.  

In general, an employee will be considered to be on leave with pay throughout a week if that employee is remunerated by the employer for that week but does not perform any work for the employer in that week. This refund would not be available for eligible employees that are on leave with pay for only a portion of a week.

This refund would not be subject to the weekly maximum benefit per employee of $847 that an eligible employer may claim in respect of the CEWS and there would be no overall limit on the refund amount that an eligible employer may claim.

For greater certainty, employers would be required to continue to collect and remit employer and employee contributions to each program as usual. Eligible employers would apply for a refund, as described above, at the same time that they apply for the CEWS.

Eligible Periods

Eligibility will generally be determined by the change in an eligible employer’s monthly revenues, year-over-year, for the calendar month in which the period began. There are two benchmarks to use in determining eligibility:

1. Comparing 2020 revenues to 2019 revenues,

For example: if revenues in March 2020 were down 20% compared to March 2019, the employer would be allowed to claim the CEWS (as calculated above) on remuneration paid between March 15 and April 11, 2020.

OR

2. Comparing 2020 revenues to the average revenues of January and February of 2020.

For example: ABC Inc. is a start-up that started its operations last September. It reported revenues of $100,000 in January and $140,000 in February, for a monthly average of $120,000. In March, its revenues dropped to $90,000. Because revenues in March are 25% lower than $120,000, ABC inc. would be eligible for the CEWS for the first claiming period. To be eligible for the following claiming period, ABC Inc. revenues would have to be $84,000 or less for the month of April (that is, 30% lower than $120,000).

Employers would select one of the revenue benchmarks in their first CEWS application, and be required to continue to use the same method for the entire duration of the program.

There are three four-week periods, with period one beginning March 15. Once an employer has qualified for a particular period, they would automatically qualify for the next period. 

The amount of wage subsidy (provided under the COVID-19 Economic Response Plan) received by the employer in a given month would be ignored for the purpose of measuring year-over-year changes in monthly revenues.

The table below outlines each claiming period’s eligibility. 

   Claiming Period Required Reduction in Revenue  Reference Period for Eligibility 
Period 1   March 15 - April 1 15% 

March 2020 over:

  • March 2019 or
  • Average of January and February 2020
Period 2  April 12 - May 9 30% 

April 2020 over:

  • April 2019
  • Average of January and February 2020
Period 3  May 10 - June 6 30% 

May 2020 over:

  • May 2019 or
  • Average of January and February 2020
 Period 4 June 7 - July 4 30% 

June 2020 over:

  • June 2019 or
  • Average of January and February 2020
Period 5 July 5 - August 1  To be determined  To be determined 
Period 6  August 2 - August 29 To be determined  To be determined 

Eligible Employees

An eligible employee is an individual who is employed in Canada.

Eligibility for the CEWS of an employee’s remuneration will be limited to employees that have not been without remuneration from the eligible employer for more than 14 consecutive days in the eligibility period, i.e., from March 15 to April 11, from April 12 to May 9, and from May 10 to June 6.  

This rule replaces the previously announced restriction that an employer would not be eligible to claim the CEWS for remuneration paid to an employee in a week that falls within a four-week period for which the employee is eligible for the Canadian Emergency Response Benefit.

Application Process

Before You Apply

  • Make sure your business details and direct deposit information for your payroll accounts (RP) are up-to-date. This will ensure that any payments to you will be processed quickly and easily. Register your payroll accounts for direct deposit
  • If you are expecting a payment of $25 million or more, you will have to get your payment through the large value transfer system (LVTS). Learn more: LVTS registration process.

How You Apply

Businesses can apply online using one of the following methods:

  1. CRA My Business Account (preferred method)
  2. Business representatives may apply using "Represent a Client" method
  3. Web Form

For an in-depth understanding of the CEWS application process refer to the Federal Government’s CEWS Application Guide

After You Apply

When to Expect Your Payment

You can generally expect to receive your payment within 10 business days if you are registered for direct deposit on your payroll account. In some cases, the CRA may need to delay your payment if additional review is required or they need to contact you.

Include the Subsidy on Your Returns

The CEWS is taxable. You must include the amount of CEWS you receive on your Annual Return of Income (e.g. Corporation Income Tax Return, Partnership Return) when calculating your taxable income.

You will also be expected to report the amount of the CEWS that was used to pay each of your employees’ salaries by using a special code in the “other information” area at the bottom of the employees’ T4 slips. More information on the reporting requirements will be released before the end of the year.

Incorrect or Fraudulent Claims

If you do not meet the Canada Emergency Wage Subsidy eligibility requirements for a period, you will be required to repay any amounts you received for that period.

Penalties may apply in cases of fraudulent claims, including fines or even imprisonment.

If you artificially reduce your revenue for the purpose of claiming the wage subsidy, you will be required to repay any subsidy amounts you received, plus a penalty equal to 25% of the total value.

Read more on CEWS compliance

Keep Your Records

You must keep records demonstrating your reduction in revenues and remuneration paid to employees.

Read more on records you should keep

Businesses Responsibilities

The Federal Government is asking businesses to do their best in paying the remaining 25% of wages that are not supported by the subsidy program.

Businesses are encouraged to rehire employees as quickly as possible and to apply for the CEWS if they are eligible. To ensure that the CERB applies as intended, the Federal Government will consider implementing an approach to limit duplication. This could include a process to allow individuals rehired by their employer during the same eligibility period to cancel their CERB claim and repay that amount.

In order to maintain the integrity of the program and to ensure that it helps Canadians keep their jobs, the employer would be required to repay amounts paid under the CEWS if they do not meet the eligibility requirements and pay their employees accordingly.

Furthermore, employers who engage in artificial transactions to reduce their revenues in order to be eligible for the CEWS could be subject to a penalty equal to 25% of the value of the CEWS amount claimed, in addition to having to repay the full amount of the CEWS that was improperly claimed.

Interaction with the Work-Sharing Program

In response to COVID-19 the Federal Government has extended the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks for employers. This measure will provide income support to employees eligible for Employment Insurance who agree to reduce their normal working hours because of developments beyond the control of their employers.

For employers and employees that are participating in a Work-Sharing program, EI benefits received by employees through the Work-Sharing program will reduce the benefit that their employer is entitled to receive under the CEWS.

Government Assistance

The usual treatment of tax credits and other benefits provided by the government would apply. Accordingly, the wage subsidy received by an employer would be considered government assistance and be included in the employer’s taxable income.

Assistance received under either wage subsidy would reduce the amount of remuneration expenses eligible for other federal tax credits calculated on the same remuneration.

Original Wage Subsidy Program

Introduced on March 18, original subsidy program is still in effect, and those who do not qualify for the Canada Emergency Wage Subsidy, may be eligible for this previously announced program.

The Temporary 10% Wage Subsidy is a three-month measure that will allow eligible employers to reduce the amount of payroll deduction required to be remitted to the Canada Revenue Agency (CRA).

You are an eligible employer if you:

  • are a(n):
  • individual (excluding trusts),
  • partnership.
  • non-profit organization,
  • registered charity, or
  • Canadian-controlled private corporation (including a cooperative corporation) eligible for the small business deduction;
  • have an existing business number and payroll program account with the CRA on March 18, 2020; and
  • pay salary, wages, bonuses, or other remuneration to an eligible employee.

Note: Partnerships are only eligible for the subsidy if their members consist exclusively of individuals (excluding trusts), registered charities, or Canadian-controlled private corporations eligible for the small business deduction.

For employers that are eligible for both the Canada Emergency Wage Subsidy and the Temporary 10% Wage Subsidy for a period, any benefit from the Temporary 10% Wage Subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period.

Eligible small employers will receive a temporary wage subsidy for a period of three months and the subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.

Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. 

Canada Emergency Commercial Rent Assistance Program

The Federal Government announced on April 16 its intent to launch the Canada Emergency Commercial Rent Assistance (CECRA) program. This program’s focus is on providing financial assistance to small businesses in respect of their commercial rent.

On April 24, the Federal Government announced that it had reached an agreement in principle with all provinces and territories, to implement the CECRA to support small businesses and ensure they have the resources to make it through the COVID-19 pandemic. Under this program, rent for small businesses that have been affected by COVID-19 will be lowered by 75%. 

How does the CECRA for small businesses program work?

The program will be administered by the Canada Mortgage and Housing Corporation (CHMC) on behalf of the Federal Government and its provincial and territorial partners.

The program offers assistance for the months of April, May and June, 2020, with the option for businesses to extend their assistance through July if they are eligible.

  • It can be applied retroactively.
  • Property owners may still apply for assistance once the three or four-month period has ended if they can prove eligibility during those months.
  • Property owners must refund amounts paid by the small business tenant for the period.*

*If rent has been collected at the time of approval, a credit to the tenant for a future month’s rent (i.e. July for April) is acceptable if agreed upon by both the property owner and the tenant. This can be a flexible three or four-month period.  

CMHC will provide forgivable loans to eligible commercial property owners.

  • The loans will cover 50% of the gross rent owed by impacted small business tenants during the three-month period of April, May, and June 2020 (and July 2020 if eligible).
  • The property owner will be responsible for no less than half of the remaining 50% of the gross rent payments (paying no less than 25% of the total).
  • The small business tenant will be responsible for no more than half of the remaining 50% of the gross rent payments (paying no more than 25% of the total).

Note: If you are a tenant and struggle to pay your portion, alternate programs and financing are available to assist you (see loan programs above).

CECRA loans will be forgiven if the property owner complies with all applicable program terms and conditions including to not seek to recover rent abatement amounts after the program is over.

Property owners can begin applying for the CECRA on May 25, 2020. The deadline to apply is August 31, 2020.

Eligibility

To qualify for the CECRA program, the property owner must meet the following requirements:

  • They own property that generates rental revenue from commercial real property located in Canada.
  • They are the property owner of the commercial real property where the impacted small business tenants are located.
  • They have entered or will enter into a rent reduction agreement for the period of April, May, and June 2020, that will reduce impacted small business tenant’s rent by at least 75% and that agreement includes a moratorium on eviction for those three months.

Properties with or without a mortgage are eligible under CECRA for small businesses.

CECRA for small businesses is only applicable to commercial property owners with a valid and enforceable lease agreement with an impacted small business tenant.

Landlords and tenants who are not at arm’s length will be included in the CECRA for small businesses so long as there was a valid and enforceable lease agreement in place and the rent under the lease is at market rates.

What is an impacted small business tenant?

Impacted small business tenants are businesses, including non-profit and charitable organizations who:

  • pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement);
  • generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level); and
  • have experienced at least a 70% decline in pre-COVID-19 revenues.**

Eligible small business tenants who are in sub-tenancy arrangements are also eligible if these lease structures meet program criteria.

** To measure revenue loss, small businesses can compare revenues in April, May, and June of 2020 to that of the same month of 2019. They can also use an average of their revenues earned in January and February of 2020. 

The online application process will include both fillable fields and templates of the documents required. Property owners will need to provide information to prove eligibility including:

  • proof of an existing rent reduction agreement
  • moratorium on eviction, and
  • small business tenant financial hardship (i.e. attestation of 70% decline in revenue)

How to Apply

Property owners can begin to apply on May 25.

To manage the volume of applications the Federal Government asks property owners to follow the schedule when applying:

Property owners who are located in Atlantic Canada, B.C., Alberta, and Quebec, with up to 10 tenants who are eligible for the program     Apply Mondays 
Property owners who are located in Manitoba, Saskatchewan, Ontario, and the Territories, with up to 10 tenants who are eligible for the program Apply Tuesdays
All other property owners in Manitoba, Saskatchewan, Ontario, and the Territories Apply Wednesdays
All other property owners in Atlantic Canada, BC, Alberta, and Quebec Apply Thursdays
Any property owner  Apply Fridays

Apply for the CERCA directly on the CMHC website.

As of June 30, the Federal Government has simplified the application process for all applicants by removing the requirement to claw-back insurance proceeds and provincial rent supports from the CECRA forgivable loan amount. Existing applicants who are affected will be notified and will have any previously clawed-back amounts restored to their forgivable loan.

Loan Programs

    Canada Emergency Business Account

    This $25 billion program provides 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, due to the economic impacts of the COVID-19 virus. 

    Applications are now open and small businesses and not-for-profits can apply directly through their financial institution or credit union. 

    There are two qualifying streams for the CEBA:

    1. Businesses that paid between $20,000 to $1.5 million in total payroll in 2019. 

    2. Businesses that paid less than $20,000 in total payroll in 2019.  These businesses will need:

    a. A business operating account at a participating financial institution;

    b. A Canada Revenue Agency business number;

    c. A 2018 or 2019 tax return; and

    d. Eligible non-deferrable expenses of between $40,000 and $1.5 million.

    Businesses with payroll lower than $20,000 in 2019 (stream 2) can begin applying on June 19.

    Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25% ($10,000).

    For more information on the CEBA, visit the program’s website.

    Business Credit Availability Program (BCAP)

    The Business Credit Availability Program (BCAP) will provide additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).

    BDC and EDC are working with private sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation, exports, and tourism.

    This program includes:

    A New Loan Guarantee for Small and Medium Enterprises

    Small and medium-sized enterprises (SMEs) may be particularly vulnerable to the impacts of COVID-19. To support their operations, Export Development Canada will guarantee new operating credit and cash flow term loans that financial institutions extend to SMEs, up to $6.25 million.

    A New Co-Lending Program for Small and Medium Enterprises

    The Co-Lending Program will bring the Business Development Bank of Canada (BDC), together with financial institutions, to co-lend term loans to SMEs for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts up to $6.25 million and the BDC’s portion of this program is up to $5 million maximum per loan. Eligible financial institutions will conduct the underwriting and manage the interface with their customers

Support for Mid-Sized Companies

In expanding the BCAP to include mid-sized companies, loans of up to $60 million per company will be granted, with guarantees of up to $80 million. Through the BCAP, EDC, and the BDC will work with private sector lenders to support access to capital for Canadian businesses in all sectors and regions.

Large Employer Emergency Financing Facility

The Large Employer Emergency Financing Facility (LEEFF) program will be open to large for-profit businesses – with the exception of those in the financial sector – as well as certain not for profit businesses, such as airports, with annual revenues generally in the order of $300 million or higher. To qualify for LEEFF support, eligible businesses must be seeking financing of about $60 million or more, have significant operations or workforce in Canada, and not be involved in active insolvency proceedings. Broader sectoral dynamics for LEEFF applicants will be considered through processes led by Innovation, Science, and Economic Development Canada.

The LEEFF is not to be used to resolve insolvencies or restructure firms, nor can it provide financing to businesses that otherwise have the capacity to manage through the crisis.

Guiding Principles of LEEFF

  • Businesses seeking support must demonstrate how they intend to preserve employment and maintain investment activities.
  • LEEFF recipients will need to commit to respect collective bargaining agreements and protect workers’ pensions.
  • The LEEFF program will require strict limits to dividends, share buy-backs, and executive pay.
  • In considering a business’ eligibility, an assessment may be made of its employment, tax, and economic activity in Canada, as well as its international organizational structure and financing arrangements. 
  • The program will not be available to businesses that have been convicted of tax evasion. 

Recipients would be required to commit to publish annual climate-related disclosure reports consistent with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, including how their future operations will support environmental sustainability and national climate goals.

Applications are now open for LEEFF. Apply here

Community Futures Network

Rural businesses and communities can access $287 million in additional funding through the Community Futures Network.

Learn more on the Community Futures Network

Industrial Research Assistance Program (IRAP)

Assistance for innovative, early-stage companies who are not eligible for other COVID-19 business supports can access the IRAP. The Federal Government is investing $250 million in this program.

IRAP provides advice, connections, and funding to help Canadian small and medium-sized businesses increase their innovation capacity and take ideas to market.

Learn how to apply

Futurpreneur Canada

The Federal Government is providing $20.1 million in support to Futurpreneur Canada to support young entrepreneurs across the country facing challenges due to COVID-19. The funding will allow Futurpreneur Canada to provide payment relief for its clients for up to 12 months.

Learn more about Futurpreneur Canada

Businesses in the Territories

Financial aid in the amount of $15 million will be available to businesses in the Territories. These funds will assist businesses with operating costs not already covered by other Government of Canada measures.

Canada’s Regional Development Agencies

The Federal Government is providing $675 million in financing support to small and medium-sized businesses that are unable to access other COVID-19 business supports through Canada's Regional Development Agencies.

Connect with your Regional Development Agency

Supporting Financial Market Liquidity

The Insured Mortgage Purchase Program will be launched allowing the government to purchase up to $50 billion of insured mortgage pools through the Canada Mortgage and Housing Corporation, providing long-term stable funding to banks and mortgage lenders, helping to facilitate continued lending to Canadian consumers and businesses, and adding liquidity to Canada’s mortgage market.

The Bank of Canada also announced measures to help the financial markets, such as adjusting its market liquidity operations, broadening eligible collateral for its repo facility and readiness to provide support to the Canada Mortgage Bond market.

Support for Charities

      The Charities Directorate is extending the filing deadline to December 31, 2020, for all charities with a Form T3010, Registered Charity Information Return due between March 18 and December 31, 2020.

      The Charities Directorate has suspended all operations until further notice, which includes their call centre, as well as all registration and audit activities.

      Find more information on Federal support for Canadian charities here.

Emergency Community Support Fund

The Federal Government invested $350 million to support vulnerable Canadians through charities and non-profit organizations that deliver essential services to those in need.

 The investment will flow through national 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 help lines 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; and
  • replacing in-person, one-on-one contact, and social gatherings with virtual contact through phone calls, texts, teleconferences, or the Internet.

Applications for Funding

A small number of national-level intermediary organizations will be disbursing funds. Community organizations will be able to apply for funds through these national partners or their local entities.

Community organizations should check the websites of the United Way Centraide Canada, the Canadian Red Cross, and Community Foundations of Canada to learn more about how and when they will be able to apply.

Delivery of Funding

The Federal Government has partnered with national intermediaries to deliver funding because they already have strong connections with community-based organizations. They are also sensitive to local issues and can use this local knowledge to ensure support is provided to the vulnerable groups who need it most. Finally, these partners already fund community-based charities and non-profit organizations quickly and efficiently.

Distribution of Funding

The United Way Centraide Canada, the Canadian Red Cross, and the Community Foundations of Canada, together, reach all provinces and territories in Canada. They will allocate funding by taking into account the size of the population as well as regional and local needs.

Support for Cultural, Heritage, and Sport Organizations

In response to COVID-19, the Federal Government committed $500 million to establish the Support Fund for Cultural, Heritage, and Sport Organizations. The fund will provide additional temporary relief to support cultural, heritage, and sport organizations and help them plan for the future. The funding will help maintain jobs and support business continuity for organizations whose viability has been negatively impacted by the COVID-19 pandemic.
Fund Details

The Fund will be administered by Canadian Heritage and divided among select departmental programs and Portfolio agencies as well as key delivery organizations, specifically:

  • Up to $326.8 million to be distributed by Canadian Heritage, of which:
  • $198.3 million will be provided to the beneficiaries of arts and culture funding through existing programs as well as other organizations with demonstrated needs;
  • $72 million will be provided to the sport sector;

The use of the remaining funds will be assessed based on needs.

Find more information on the Canadian Heritage COVID-19 support funding here.

Relief to the Broadcasting Sector

The Canadian Radio-television and Telecommunications Commission (CRTC) will not issue letters requesting payment for Part I license fees by broadcasters for the 2020–21 fiscal year. The government will transfer the necessary funds to the CRTC to support its operations.

H3: Canada Council for the Arts

Canada Council for the Arts will receive $60 million in advance funding to enable core funded organizations to meet their immediate commitments, help ensure cash flow, and address outstanding payments to the artists and cultural workers they employ.

Find more information on the advanced funding here

Digital Originals- Micro Innovation Grants

The Canada Council will provide a total of $1 million in funding to successful applicants to develop, create, and share original or adapted works with Canadian audiences online.

CBC/Radio-Canada will showcase and amplify the discoverability of select projects on one or more of its platforms.

Find more information on the micro innovation grants here.

Funding Eligibility

Funding will be released in two phases.

Find more information on eligibility for Phase 1 and Phase 2 here.

U.S. Tax Payment Deadlines

As of March 20, 2020 the U.S. tax filing and payment deadline for individuals and corporations are deferred to July 15, 2020.

In light of COVID-19, U.S. Treasury Secretary, Steven Munchin, announced on March 20 that a three-month extension will apply for the filing and payment of the U.S. federal income taxes owed for 2019.

Individuals who owe a U.S. income tax payment of up to $1 million, based on their 2019 tax return, and corporation owing up to $10 million will have an additional 90 days to defer payment, with the new due date of July 15, 2020. During this three-month deferral period, taxpayers won’t be subject to interest and penalties.

The 90-day extension is applicable at the federal level only. Many states are also relaxing their tax filing and payment deadlines, but one needs to check with each state on their position. The American Institute of CPAs (AICPA) provides more information on state guidelines in relation to COVID-19.

It is recommended you submit your 2019 income tax return as soon as possible to the U.S. federal government, especially if you are due a refund. If additional time is needed to file tax returns, one should consider filing extensions.

Crowe MacKay's Commitment to Safety

This is a challenging time around the world and in Canada. Crowe MacKay LLP continues to navigate the challenges presented to businesses by COVID-19. Our highest priority is the safety of our people and the communities we serve. Our efforts to leverage our talent with technology is allowing us to continue servicing client needs effectively with minimal disruption. We are confident in our abilities to exceed our clients’ expectations. We are privileged to have long and trusted relationships with our clients and are working hard to continue to bring solutions to our customers.

We continue to enhance safety measures across all of our offices to keep our employees and communities safe. We’ve taken the necessary steps to ensure we are practicing daily preventative measures that meet the Public Health Agency of Canada’s standards. This includes increasing our social distancing by having employees work from home. Additionally, all non-essential business travel and events have been suspended.

Visiting Crowe MacKay Offices

Minimizing our in-person social interactions is a way to reduce the risk to our clients, our teammates, and our communities. As an innovative firm, our offices are equipped with the technologies to deliver effective alternative communications. We encourage you to communicate with your Crowe MacKay advisor through phone, email, or video conferencing.

If you have an appointment scheduled at one of our offices, please call ahead to reschedule your appointment, or choose to have the appointment through one of the other methods listed above.

For any questions or inquires you have regarding the impact COVID-19 may have on the filing of your taxes, or any personal or business matters, please contact your local Crowe MacKay office toll-free at 1 (844) 522 7693.