COVID-19: Canada’s New Emergency Response Benefit

Originally published March 27, 2020. Updated February 9, 2021.

On March 25, 2020, the Government of Canada proposed legislation to establish the Canada Emergency Response Benefit (CERB) in order support workers and help businesses keep their employees. CERB is described as a simpler combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

How much assistance can I expect?

CERB is a taxable benefit that will provide Canadians impacted by COVID-19 $2,000 per month for the next four months.

When and where can I apply?

The Canada Emergency Response Benefit portal is now open. To deal with high demand, application dates are staggered and determined by your month of birth as follows:

Qualifying individuals would begin receiving CERB payments within 10 days of application. The CERB would be paid every four weeks and will be available until October 3, 2020.

Am I eligible for this benefit?

The benefit applies to any Canadian out of work due to reasons related to COVID-19, including for sickness, quarantine, caregiving, staying home to take care of children or loss of jobs. Furloughed workers, those who are still technically employed but not receiving income, would also qualify for the benefit. The benefit would cover wage-earners, contract workers and self-employed and gig industry individuals. 

All Canadians who have ceased working, whether they are eligible for employment insurance or not, would be able to receive the benefit. Canadians who have yet to apply for federal income support will be able to decide whether to apply for CERB or Employment Insurance (EI) based on which may offer more financial support.

It would be prudent for applicants to determine if EI or CERB would be more beneficial to apply for based on your full-time hourly wage. Individuals currently receiving EI and sickness benefits would continue to receive their benefits and should not apply for the CERB. If their EI benefits end before October 3, they could apply for the CERB once their EI benefits cease, if they are unable to return to work.

Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply for the CERB.

On April 15, 2020, at his daily COVID-19 press briefing, Prime Minister Trudeau announced the following changes to the CERB, widening the scope of eligibility:

• Individuals still employed but earning less than $1,000 per month, can now apply for the CERB. Volunteer firefighters, contractors who can pick up some shifts, or people working part-time in grocery stores were provided as examples.
• Seasonal workers who were expecting to work during the spring and summer but can’t because of COVID-19, are now eligible for CERB.
• Individuals who were receiving EI benefits which have run out, can now apply for CERB.
• More information is expected in the days to come regarding the eligibility of post-secondary students and landlords.
• A wage boost for essential workers who make less than $2,500 a month, including those working in long-term care facilities for the elderly, was also announced.

On June 16, 2020, the government announced that CERB will be extended from 16 weeks to 24 weeks for workers who:

• stopped working due to COVID-19 or
• are eligible for Employment Insurance regular or sickness benefits or
• have exhausted their Employment Insurance regular benefits or Employment Insurance fishing benefits between December 29, 2019 and October 3, 2020.

Effective February 9, 2021, self-employed Canadians who applied for CERB assessing the $5,000 income threshold on on their 2019 gross income, rather than net income, will no longer be required to repay the benefit as long as they are otherwise eligible. This policy applies regardless of whether applicants accessed CERB through the Canada Revenue Agency or through Service Canada. Those who meet the qualifications and have already repaid their CERB will see the money returned to them.

Is this benefit taxable?

Yes. No deductions will be taken off at the source but the total received should be included as income in your 2021 tax return.

What can I do right now?

Revenue Minister Diane Lebouthillier urged applicants to update their direct-deposit information with the Canada Revenue Agency (CRA). While the CRA will be administering the new benefit program, Service Canada will continue to handle EI claims.

How Can Crowe Soberman Support You?

In these uncertain times, it is essential to remain agile and proactive as the COVID-19 situation unfolds. Having timely access to financial experts, insights and news as quickly as possible is critical—and that’s where we can help.

We have established a dedicated COVID-19 Resource Hub, highlighting areas of business operations that will likely be impacted by coronavirus. Whether you need to discuss your current financial situation and learn what options are available to you, or you want to be guided through the appropriate cash flow management strategies for your business, our team of experts are ready to help you at every step of the way. Please do not hesitate to reach out to your Crowe Soberman professionals for support during these challenging times.

We are in this together.

This article has been prepared for the general information of our clients. Specific professional advice should be obtained prior to the implementation of any suggestion contained in this article. Please note that this publication should not be considered a substitute for personalized tax advice related to your particular situation.