Bill C-13 – Updated March 25, 2020
On March 25, 2020, Bill C-13 “An Act respecting certain measures in response to COVID-19“ was introduced, and received Royal Assent.
Here are five key items found in that bill which may be of interest to you and/or your employees:
- Emergency Response Benefit;
Canada’s Emergency Response Benefit (CERB) – Updated April 15, 2020
CANADA’S EMERGENCY RESPONSE BENEFIT (CERB)
The ERP is now also available for: workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work; and wage earners and self-employed individuals, including contract workers, who are not eligible for conventional EI benefits.
The legislation requires the applicant to be an “eligible worker”, which means that they must be:
- At least 15 years of age;
- Resident in Canada;
- Stopped working because of COVID-19 or are eligible for EI regular or sickness benefits
- Have not voluntarily quit their job
- Had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application.
On April 15, changes announced to the eligibility rules to:
- Allow people to earn up to $1,000 per month while collecting the CERB.
- Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.
- Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
An online questionnaire will help them direct you to the service option that best fits your situation (i.e. eligibility for Employment Insurance benefits or not).
- A taxable benefit of $2,000 every 4 weeks for up to 16 weeks to eligible workers who have lost their income due to COVID-19
- Do not apply for the CERB if you have already applied for EI.
- Online Application
- You can also apply over the phone: 1‑800‑959‑2019 or 1‑800‑959‑2041
- Legislation does not exclude shareholders or their family members as long as they meet the income requirements.
- Temporary wage subsidy for employers
Temporary Wage Subsidy – Updated March 25, 2020
TEMPORARY WAGE SUBSIDY
- This measure provides eligible employers with a temporary wage subsidy for a period of three months;
- The subsidy is to be 10% of remuneration paid during that period, up to certain per employee and per employer maximums;
- Businesses can benefit immediately from this support by reducing their remittances of income tax withheld from their employees’ remuneration;
- Remittances for CPP and EI cannot be offset by the subsidy.
- The employer must meet three criteria:
- employ one or more individuals in Canada (“eligible employees”);
- be registered with a business number and a payroll remittance account on March 18, 2020; and,
- be any of the following:
- a non-profit organization (exempt from income tax);
- a registered charity;
- most Canadian-controlled private corporations (CCPCs);
- Eligibility requires that the CCPC had a business limit, for purposes of the small business deduction, greater than nil for its most recent tax year ended prior to March 18, 2020;
- Reduction to the business limit caused by passive income is not considered;
- A CCPC which had no business limit for other reasons (please check with us for this exception) would not qualify.
- an individual (this means a proprietorship);
- the proprietor themselves are NOT eligible; or
- a partnership;
- the partners themselves (if individuals) are NOT eligible
- The subsidy will be equal to the least of three amounts, as follows:
- a fixed maximum for each employer of $25,000;
- CRA has indicated that this amount is per employer, and is not required to be shared between related or associated employers;
- a fixed percentage, being 10%, of remuneration paid to eligible employees during the period from March 18, 2020 to June 19, 2020; or,
- the number of eligible employees employed during the period from March 18, 2020 to June 19, 2020, multiplied by a fixed amount, $1,375.
- a fixed maximum for each employer of $25,000;
- To get the maximum benefit of $25,000, the employer must have more than 18 employees with total wages no less than $250,000 during the period.
- No formal application process has been released;
- Source deduction remittances for income tax, but not for CPP or EI, can be reduced for the available subsidy, providing an immediate cash flow benefit to the employer;
- Presumably, there will be an eventual requirement to account for the subsidy claimed, possibly when T4 slips are prepared and filed in early 2021 – no additional filings have been implemented to date.
- The legislation does not provide any exclusion for owners of the employer or persons related to the employer, so their remuneration should be eligible.
- GST tax credit special payment; and,
Goods and Services Tax Credit (GSTC) – Updated March 25, 2020
GOODS AND SERVICES TAX CREDIT (GSTC)
- Any individual eligible for the quarterly GSTC based on their 2018 personal income tax filings will be eligible for an additional payment in May 2020.
- Some others may be entitled to a one-time payment, even if their income is too high to receive quarterly payments.
- The one-time payment will depend on family composition;
- The benefit is income-tested, and is reduced when “adjusted income” exceeds $37,789;
- Some individuals or families whose “adjusted income” was too high to qualify for any quarterly GSTC payments will be eligible for the GSTC.
- This benefit is managed under the income tax system;
- No special application is required as the payment will be calculated by CRA based on income tax returns filed for 2018.
- Payment is to be made in May, 2020, or earlier, so it is possible that these payments will be released in April, 2020;
- Families not presently receiving the GSTC may wish to confirm that CRA has a record of all minor children in their custody to ensure the calculations reflect these individuals;
- Taxpayers registered with CRA’s MyAccount service can view the children CRA shows under their custody online through that service.
- Canada child benefit special payment.
Canada Child Benefit (CCB) – Updated March 25, 2020
CANADA CHILD BENEFIT (CCB)
- All families eligible for monthly CCB benefits based on their 2018 personal income tax returns will receive an extra benefit as part of their May 2020 benefit payment;
- Some other families with children under age 18 who do not receive monthly benefits will be eligible for a one-time benefit in May.
- For families receiving monthly benefits, the May benefit will be enhanced by $300 per child under age 18;
- Families receiving no monthly benefits may receive a portion of this enhancement, depending on their income levels.
- Like the monthly CCB, this benefit is managed under the income tax system;
- No special application is required as it will be based on income tax returns filed for 2018.
- Individuals or families with children under age 18 who are not presently receiving the CCB may want to confirm that all the children in their custody are reflected on CRA’s records, to ensure the appropriate payment is computed.
- Again, taxpayers registered with CRA’s MyAccount service can view the children CRA shows under their custody online through that service.