Recent Changes to COVID-19 Recovery Benefits for Businesses
With the Canada Emergency Response Benefit (CERB) ending September 27, 2020, and a proposed sick leave benefit in the works, many are wondering what the upcoming changes to COVID-19 recovery benefits mean for business owners and employees.
As we settle into fall and with the looming possibility of a second wave, the ongoing COVID-19 response continues to evolve. Information in this article is accurate at the time of posting. For the most up-to-date information on Canada’s COVID-19 support programs and resources, visit canada.ca
New support programs to replace CERB for self-employed
It is estimated that nearly half of the four million Canadians who were receiving CERB as of September 26, 2020 (and who are still eligible) will automatically transition to a modified EI program. For those who do not qualify for EI, the government has proposed three new recovery benefits (subject to passage of legislation):
Canada Recovery Benefit (CRB) will provide $500 per week for up to 26 weeks to workers who are self-employed or are not eligible for EI and who still require income support. Eligibility criteria apply and this benefit helps support individuals who have stopped working due to the COVID-19 pandemic and are available and looking for work; or are working and have had a reduction in their employment/self-employment income for reasons related to COVID-19.
Canada Recovery Sickness Benefit (CRSB) will provide $500 per week for up to two weeks, for workers who cannot work because they are sick or must self-isolate for reasons related to COVID-19. Eligibility criteria apply and applicants cannot also receive CRSB if they are already receiving the Canada Recovery Benefit, the Canada Recovery Caregiving Benefit, short-term disability benefits, workers’ compensation benefits, or any EI benefits or Quebec Parental Insurance Plan (QPIP) benefits in respect of the same week.
Canada Recovery Caregiving Benefit (CRCB) will provide $500 per week for up to 26 weeks per household to eligible workers who cannot work because they must provide care to children or family members due to the closure of schools, day cares or care facilities. Eligibility criteria apply and only one individual per household may receive the benefit in the same week.
In addition to the three new recovery benefits, measures to help Canadians access EI benefits more easily are effective September 27, 2020, for one year. These changes will also establish a minimum weekly benefit payment of $500 for all EI recipients, at the same level as the CRB.
Recent changes to COVID-19 recovery support for businesses
Small business owners need to stay in the loop regarding program changes and ensure they don’t miss out on applicable support opportunities. Here are a few recent or upcoming changes to keep in mind.
Sept 30: Deadline to apply for Canada Emergency Commercial Rent Assistance (CECRA)
CECRA provided a forgivable loan to voluntary eligible landlords with eligible tenants to lower rent by 75% for eligible small businesses impacted by COVID-19. While September was announced as the last extension of the CECRA, the government is said to be exploring alternative options to support businesses with their rent expenses.
October 31: Deadline to apply for Canada Emergency Business Account (CEBA / 40k Loans)
CEBA provides interest-free loans of up to $40,000 for small business and non-profit organizations to help cover short-term operating expenses, payroll and other critical non-deferrable expenses. Repayment of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).
Recent eligibility changes mean that more small businesses can access the funds. Effective June 26, 2020, eligible borrowers include owner-operated small businesses that do not have a payroll, sole proprietors receiving business income directly, as well as family-owned corporations remunerating in the form of dividends rather than payroll. Review full eligibility requirements and application details or apply for a CEBA loan directly with your financial institution.
Extension of temporary lay-off period to up to six months
In an effort to protect jobs and allow employers more time to recall laid-off employees, the government has temporarily extended time periods given to employers to recall employees laid off due to COVID-19.
The allowable time before a lay-off is considered a termination is temporarily extended as follows:
● employees laid off for a period of 3 months or less
○ by 6 months for employees laid off prior to March 31, 2020
○ to December 30, 2020 for employees laid off between March 31, 2020 and September 30, 2020
● employees laid off for more than 3 months with a fixed recall date or a fixed period within 6 months
○ by 6 months or until December 30, 2020, whichever occurs first, for employees laid off prior to March 31, 2020
○ to December 30, 2020 for employees laid off between the period of March 31, 2020 and September 30, 2020, where the fixed date or fixed period specified in the written notice occurs before December 30, 2020
○ until the recall date where the fixed date or fixed period specified in the written notice occurs on or after December 30, 2020
Employers can call their employees back to work at any time, regardless of this extension. Review the full details in the official news release.
Any drop in revenue now qualifies for Canada Emergency Wage Subsidy (CEWS)
Eligible employers who had any drop in revenue can now qualify for the wage subsidy, starting with the claim periods that began July 5. The subsidy rate varies depending on how much your revenue dropped. Additional resources including full eligibility criteria and a subsidy calculator are available on the CEWS website.
These are certainly challenging times to keep your business afloat. It helps to know that there are a variety of support programs available aimed at helping businesses navigate the ongoing pandemic. From financial aid to mental health resources, it’s important to stay current with all the latest news and support updates.