Canada Emergency Response Benefit (CERB)
On March 25, the Prime Minister announced a new taxable benefit that provides $2,000/month for up to four months for workers who lose their income as a result of the COVID-19 pandemic.
The CERB is intended to be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit. Some key points below:
• There will be a separate application portal to handle these applications – separate from EI
• All Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not, are eligible to receive the CERB.
• Canadians should begin to receive CERB payments within 10 days of application. It will be paid every four weeks and be available from March 15, 2020 until October 3, 2020.
• Those already receiving EI regular and sickness benefits would continue to receive their benefits - they should not apply to the CERB. If their EI benefits end before October 3, 2020, they could apply for the CERB once their EI benefits cease, if they are unable to return to work due to COVID-19.
• Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply.
• Canadians eligible for EI regular and sickness benefits would still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.
Temporary Income Support
For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the government is:
• Waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure is already in effect.
• Waiving the requirement to provide a medical certificate to access EI sickness benefits.
• Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to:
- Workers who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
- Workers who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not quality for EI sickness benefits.
- Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.
Application for the Benefit will be available in April 2020 and will require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility.
Canadians will select one of three channels to apply for the Benefit:
1. by accessing it on their CRA MyAccount secure portal;
2. by accessing it from their secure My Service Canada Account; or
3. by calling a toll-free number equipped with an automated application process.
Longer-Term Income Support
For Canadians who lose their jobs or face reduced hours as a result of COVID’s impact, the government is:
• Introducing an Emergency Support Benefit delivered through the CRA to provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment.
• Implementing the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process.
Providing Business with Wage Subsidies
The government has announced a temporary wage subsidy program for eligible employers – both for profit and non-profit. This is a three-month program that allows eligible employers to reduce the amount of payroll deductions they are required to remit to Revenue Canada. Eligible employers include:
• non-profit organizations, registered charities, or Canadian-controlled private corporations (CCPC)*;
• have an existing business number and payroll program account with the CRA on March 18, 2020;
• pay salary, wages, bonuses, or other remuneration to an employee.
*Note: CCPCs are only eligible for the subsidy if their taxable capital employed in Canada for the preceding
taxation year, calculated on an associated group basis, is less than $15 million.
Additional Measures for Families, Low Income Canadians, and Student Loan Holders
• The federal government is proposing to provide a one-time special payment by early May 2020 through the Goods and Services Tax Credit (GSTC) for low income Canadians. This will double the maximum annual GSTC payment amounts for the 2019-20 benefit year. The average boost to income for those benefiting from this measure will be close to $400 for single individuals and close to $600 for couples.
• For families with children who may also require additional support the Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only 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. Click here for documentation regarding increasing the Canada Child Benefit this year.
• The Government is placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans. A moratorium on the repayment of Canada Student Loans.
Flexibility for Taxpayers
The Canada Revenue Agency is deferring the filing due date for the 2019 tax returns of individuals until June 1, 2020.
The Canada Revenue Agency will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. This relief would apply to tax balances due, as well as installments. No interest or penalties will accumulate on these amounts during this period.
The Canada Revenue Agency’s Outreach Program, which offers help to individuals to better understand their tax obligations and to obtain the benefits and credits to which they are entitled, will now be available over the phone, and through webinar, where possible.
Banking and Mortgage Flexibility
The Minister of Finance has pressured the major banks in Canada to work with customers to provide flexible solutions for managing through hardships caused by recent developments. This may include situations such as pay disruption, childcare disruption, or illness. Canada’s large banks have committed to offering up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products.
The Government is providing increased flexibility for homeowners facing financial difficulties by allowing lenders to defer mortgage payments on homeowners that have Canada Mortgage and Housing Corporation-insured mortgage loans. CMHC will permit lenders to allow payment deferral beginning immediately.
You are also encouraged to contact Service Canada at 1-800-OCanada (1-800-622-6232) for more information on additional government support available to you.