May 5, 2020
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Federal Program Updates
Last week, Members of Parliament across Canada took part in the first virtual sitting in Canadian Parliamentary history! I am honoured to represent Coquitlam-Port Coquitlam in the House of Commons and it is my commitment to work hard and advocate for the priorities of our community.
My team and I continue to work hard every day to respond to the needs and concerns of our community. We are still dealing with a high volume of urgent requests, but are committed to responding to every constituent.
We are also focused on ensuring that everyone has the most up-to-date information and that it is accessible. For daily updates, follow me on Facebook, Instagram and Twitter, or visit my website.
This week, the application portal for the Canada Emergency Wage Subsidy opened for applications from eligible employers
The Canada Emergency Wage Subsidy
The Canada Emergency Wage Subsidy can provide eligible employers whose businesses have been affected by COVID-19, a subsidy of up to 75% of employee wages for up to 12 weeks, retroactive from March 15, 2020 to June 6, 2020.
The wage subsidy will allow employers to re-hire workers who were previously laid off for reasons related to COVID-19, help prevent further job losses, and better position businesses to resume normal operations following this crisis.
Who is an Eligible Employer?
- Individuals (including trusts)
- Taxable corporations
- Persons that are exempt from corporate tax, other than public institutions
- Non-profit organizations
- Agricultural organizations
- Boards of Trade
- Chambers of Commerce
- Non-profit corporations for scientific research and experimental development
- Labour organizations or societies
- Benevolent or fraternal benefit societies or orders
- Registered charities
- Partnerships consisting of eligible employers
Public institutions, which includes: municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals are not eligible to receive the Canada Emergency Wage Subsidy
Determine your Eligible Employees
- Eligible employees are workers who are employed in Canada by the employer who is making the claim, except if there was a period of 14 or more consecutive days in that period in respect of which they were not paid eligible renumeration by their employers
- Eligibility is based on whether an employee is employed in Canada, not where they live
Retroactively Hiring and Paying Employees
- Employees who have been laid off or furloughed can become eligible retroactively. As long as they are rehired and paid, they are included in an employer’s calculation for the subsidy
What is Eligible Renumeration?
Eligible Renumeration refers to the amount employers pay an employee as salary, wages, and other taxable benefits, fees, and commissions. These are amounts employers would be required to make payroll deductions on to be remitted to the CRA.
Applicants will need to determine each employee’s baseline renumeration which refers to the average weekly eligible renumeration paid to an employee during the period of January 1, 2020, to March 15, 2020. Employers are able to exclude from their calculation any period of seven or more consecutive days in which the employee was not paid
Calculate your Subsidy Amount
When applying for the wage subsidy, employers will be asked to input amounts such as gross payroll and the number of eligible employees.
- The calculator tool on the application portal is a tool to help employers estimate the amount of their wage subsidy
- After applying for the wage subsidy, all claims will then be subject to verification
How is the Subsidy Calculated?
The wage subsidy is based on:
- The number and type of eligible employees an employer has, and
- The amount and type of pay in respect of a period they received both before and during the crisis
There is no limit on the total subsidy amount that an eligible employer may claim
Input Your Information- How to Use the Calculator
- Calculate the basic Canada Emergency Wage Subsidy using the spreadsheet provided as part of the calculator
- Input the amounts from the spreadsheet as indicated
- Enter the refund of employer contributions for any employees on leave with pay
- Enter any amounts for employees receiving a Work-Sharing benefit through Employment Insurance
- Enter the amount you are eligible for under the under the 10% Temporary Wage Subsidy for Employers program for this claim period
- Print and save the information to enter for your future applications
How to Apply
Before you apply
- Make sure your business details and direct deposit information for your payroll (RP) accounts are up to date to ensure any payments you receive will be processed quickly and easily
- Calculate the estimated subsidy for your business
- If you are expecting a payment of $25 million or more, you will have to get your payment via the Large Value Transfer System (LVTS)
Applying for the Canada Emergency Wage Subsidy
The wage subsidy will be processed at the payroll program (RP) account level which requires employers to file a separate application for each RP account
For a detailed guide to the application process, read the Canada Emergency Wage Subsidy application guide
Three Way to Apply for the Canada Emergency Wage Subsidy
- Apply using My Business Account
- Representatives for businesses can apply using Represent a Client
- Use the Web Forms application with your web access code if neither of the above options work for you.
- If you do not have a web access code, you must provide the date of registration or the total income tax reported in box 22 of the most recent original 2018 tax year submitted T4 summary
After You Apply
- Employers can expect to receive their payment within 10 business days if they are registered for direct deposit on their payroll account
- The wage subsidy will be paid by direct deposit or by cheque
Include the Subsidy on Your Returns
- The Canada Emergency Wage Subsidy is taxable
- The amount of subsidy that an employer receives must be included on their Annual Return of Income when calculating their taxable income
- Employers will also be asked to report the amount of the wage subsidy that was used to pay each of their employees’ salaries
Got questions?: Frequently Asked Questions about the Canada Emergency Wage Subsidy (CEWS)
Canada Emergency Commercial Rent Assistance (CECRA)
Last week, our Prime Minister announced partnerships with provinces and territories in order to implement the Canada Emergency Commercial Rent Assistance for small businesses.
The Canada Emergency Commercial Rent Assistance program will:
- Lower rent by 75% for small businesses that have been affected by COVID-19
- Provide forgivable loans to eligible commercial property owners to cover 50% of 3 monthly rent payments that are payable by eligible small business tenants who are experiencing financial challenges for reasons related to COVID-19 during April, May, and June
- Loans will be forgivable if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75% for the 3 corresponding months under a rent forgiveness agreement.
- The small business tenant would cover the remaining amount, up to 25% of the rent, while the federal government and provinces would share the remaining 50%. The forgivable loans would be disbursed directly to the mortgage lender.
- Eligible small business tenants refer to businesses paying less than $50,000 per month in rent and have temporarily ceased operations or have seen at least a 70% drop in pre-COVID-19 revenues
- This support will also be available to non-profit and charitable organizations
The CECRA is expected to be available starting in mid-May, with commercial property owners lowering the rents of their small business tenants payable for the months of April and May, retroactively, and for June
Who is Eligible to Apply for the Canada Emergency Commercial Rent Assistance?
To qualify, the property owner must meet the following eligibility requirements
- You own property that generates rental revenue from commercial real property located in Canada
- You are the property owner of the commercial real property where the impacted small businesses are located
- You have a mortgage loan secured by the commercial real property, occupied by one or more small business tenants
- You have entered or will enter into a rent reduction agreement for the period of April, May, and June 2020, that will reduce impacted small business tenant’s rent by at least 75%
- Your rent reduction agreement with your impacted tenants includes an eviction moratorium for the period of April, May and June 2020
- You have declared rental income on your tax return (personal or corporate) to tax years 2018 and/or 2019
What is an Impacted Small Business Tenant?
Impacted small business tenants are businesses that:
- Pay no more than $50,000 in monthly gross rent per location
- Generate no more than $200 million in gross annual revenues, calculated on a consolidated basis
- Have temporarily ceased operations, or have experienced at least a 70% decline in pre-COVID-19 revenues
How Does the CECRA for Small Businesses Program Work?
The Canadian Mortgage and Housing Corporation (CMHC) administers the program on behalf of the federal government and its provincial and territorial partners
The program provides assistance for the months of April, May and June 2020
- It can be applied retroactively
- Property owners may still apply for assistance once the 3-month period has ended if they are able to prove their eligibility during those months
- Property owners must refund amounts paid by the small business tenant for the period
The deadline to apply is August 31, 2020
More information will be provided as it becomes available regarding how to apply and how funds will be disbursed.
Member of Parliament for Coquitlam - Port Coquitlam