Earlier this morning Prime Minister Justin Trudeau announced an expanded eligibility to this $40,000 interest-free loan program. Previously, one of the eligibility requirements was that 2019 payroll had to be between $50,000 and $1,000,000. These 2019 payroll limits have now been expanded to $20,000 and $1,500,000. Applications continue to be done through your financial institution.
The Canada Emergency Commercial Rent Assistance (the “CECRA”)
Paired with the announcement was a commitment to the Canada Emergency Commercial Rental Assistance (CECRA) for small businesses. Details on this are still in development.
The Canada Emergency Wage Subsidy (the “CEWS”)
On April 11, 2020, the Government of Canada enacted the COVID-19 Emergency Response Act, No. 2. This legislation implements The Canada Emergency Wage Subsidy (CEWS). There have been several favorable changes to the program since it was originally announced on March 27, 2020.
The main features and most recent updates to the CEWS are outlined in the following link: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html
The application platform for the program is expected to be available in the next 2 to 4 weeks with funding, for qualified applicants, to follow thereafter.
If you intend on applying for the subsidy, there are a few steps that can be completed in advance of applying.
There are several complicated qualifying provisions in the legislation. For businesses with complex organizational structures and significant non-arm’s length revenues, the qualifying provisions are even more complicated.
One of the first steps in the qualification process is determining if the revenue drop test has been satisfied such that it meets the initial minimum 15% threshold for the initial period as defined in the program.
When it becomes operative, applications for the CEWS will be administered through the Canada Revenue Agency – MY BUSINESS ACCOUNT. This account is not the same platform used by advisors (such as Craig & Ross) to access CRA account information on behalf of our clients. Setting up a MY BUSINESS ACCOUNT cannot be completed by a third party.
Here is how to establish your MY BUSINESS ACCOUNT:
- The website to apply for your “My Business Account” is https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html
- Click on “CRA Register” under Option 2
- You will need the following information to complete the application:
- Social Insurance Number
- Postal Code
- Date of Birth
- An amount for identity confirmation purposes as reported on your 2018 return.
There is an approximate 1 week time frame required to set up and activate the account.
The Canada Emergency Response Benefit (the “CERB”) – Newly Expanded Eligibility
On April 15th the CERB program was expanded to:
- Allow people to earn up to $1,000 per month while collecting the CERB (up from the previous amount of zero).
- Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their usual seasonal work as a result of the COVID-19 outbreak.
- Extend the CERB to workers who recently exhausted their EI regular benefits and are unable to find a job or return to work because of COVID-19.