As COVID-19 cases continue to rise and Canada appears to be in the midst of a second wave of the pandemic, the Federal Government has proposed to extend and expand several of its COVID-19 support programs including the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Business Account (CEBA). A new program, the Canada Emergency Rent Subsidy (CERS) has also been proposed to follow the conclusion of the Canada Emergency Commercial Rent Assistance (CECRA) program. No other details, including draft legislation, have been released, but this federal government has proven that they are willing to continue to spend money and make changes to their programs as the pandemic progresses.
Canada Emergency Wage Subsidy (CEWS)
The proposal includes extending the wage subsidy until June of 2021 and allowing for the subsidy rate of up to a maximum of 65% of wages to continue until December 19, 2020. This is a significant change from the current program, which is designed to reduce the subsidy on a sliding scale to a maximum of 20% for Period 9 (Oct 25 - Nov 21).
Canada Emergency Business Account (CEBA)
Businesses and not-for-profits who are eligible for CEBA loans, and “continue to be seriously impacted by the pandemic”, have access to an additional interest-free loan of up to $20,000. Half of this additional financing would be forgivable if repaid by December 31, 2022. The deadline for CEBA applications has also been extended to December 31, 2020.
Example: If a company receives the original $40,000 CEBA, plus the additional $20,000 loan and $40,000 is repaid by Dec 31, 2022, the remaining $20,000 is forgiven.
Canada Emergency Rent Subsidy (CERS) – New
This new program provides rent and mortgage support for qualifying organizations that are affected by COVID-19. Businesses, charities and non-profits that “have suffered a revenue drop” can receive a maximum of 65% of eligible expenses until December 19, 2020. Unlike the Canada Emergency Commercial Rent Assistance (CECRA) program, these funds go directly to tenants. Organizations can make claims retroactively beginning for Period 8 (Sept 27 - Oct 24). Additionally, a top-up Canada Emergency Rent Subsidy of 25% is available for organizations that were temporarily shut down by a mandatory public health order issues by a qualifying public health authority. This program picks up after the CECRA program concludes, following its third month-long extension.
If you have questions about these, or any other Federal COVID-19 Support Programs, especially the complex CEWS 2.0, please reach out to your Bateman MacKay Business Advisor for assistance.
Sign up for our newsletter and receive tax, accounting, and COVID-19 resources for your business!