The federal government provides payroll subsidies to businesses in the amount of 75% of a person’s wages up to $847.00 per week. If you do not have sufficient funds coming in, the Canadian Government has arranged for the banks to provide interest-free loans up to $40,000 and, if paid back within three years, to forgive $10,000 of the amount owing. As well, the government has expanded the Canada Emergency Business Account (CEBA) program and will now include funding for owners and operators who receive their income through a dividend program.
Employees can claim $2,000 per month if they lose their job or have reduced earnings because of Covid-19. If an employee is eligible to claim Canada Emergency Response Benefit (CERB), the employer cannot claim the 75% subsidy in the 4-week period in which the employee is eligible for CERB. To claim CERB, the employee is not supposed to have earned any income in the four-week period and they must have been out of work or unable to work for 14 consecutive days. Eligible individuals collecting CERB may earn up to $1,000 in employment and/or self-employment income in each of their benefit periods while continuing to receive CERB. Amounts received by individuals from any employer more than the $1,000 threshold would create an obligation for the individuals to repay CERB amounts they received for the same benefit period.
Eligible remuneration may include salary, wages and other remuneration. These are amounts for which employers would generally be required to withhold or deduct amounts to remit to the Receiver General on account of the employee’s income tax obligation. However, it does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle. In addition, if an arrangement is made to temporarily scale up remuneration during the qualifying period, followed by a reduction after the qualifying period, then any amount paid will be excluded from eligible remuneration.
There would be no overall limit on the subsidy amount that an eligible employer may claim. That is, the actual dollar amount of subsidy is only limited per employee. The number of employees is not limited. Employers must make their best effort to top up employees’ salaries to bring them to pre-crisis levels.
For employers that are eligible for both the Canada Emergency Wage Subsidy (CEWS) and the 10% wage subsidy for a period, any benefit from the 10% wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under CEWS in that same period. In other words, eligible employers can choose to reduce remittances up to 10% of the employee’s salary and then receive CEWS. However, they cannot be added on top of each other. The benefit is limited to 75%, not 85%.
Who is eligible?
Eligible employers include: Individuals, taxable corporations, partnerships consisting of eligible employers, non profit organizations and registered charities. This subsidy would be available to eligible employers that see a drop of at least 15% in March 2020 and 30% of their revenue for April and May 2020.
Eligibility would 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. As well, an eligible employer can now compare March 2020 to the average of January and February 2020. In determining monthly revenues, the wage subsidy would NOT be considered in revenues.
In trying to ensure that all owners and operators in our industry across Canada are up-to-date with new health and safety guidelines, please click on your particular province to know what is expected of you.
You can anticipate Ministry of Labour occupational health and safety officers will be relying on these guidelines in connection with work refusals and the issuance of work orders. If you are unable to find the information that you are asking about, contact your regional health department and they will be able to provide you with additional support and access to PPE information.
The Canada Emergency Commercial Rent Assistance (CECRA) program has been expanded to include gross rent and cover landlords who do not have a mortgage on the property. Hopefully, this will encourage landlords to comply with the program. As well, the government is providing forgivable loans to landlords who participate. This is a federal/provincial program. The argument put forward is that it is better to accept 75% of the rental income than have the premises empty for probably until the pandemic period is over and receive no rent at all.
Covid-19 has created havoc in our industry. From the beginning of the shutdown of many industries, the Canadian Fabricare Association (CFA), on behalf of its members and the dry cleaning and laundry industry, lobbied both federal and provincial governments to declare our industry as an essential service. Thanks to our government leaders for recognizing our contribution to the health care industry and the health and safety of the public.