Expanded eligibility for Canada Emergency Response Benefit (CERB) & Boosted wages for Essential Workers

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From his speech this morning (April 15th), Prime Minister Justin Trudeau announced:

“Today, we’re announcing more help for more Canadians. This includes topping up the pay of essential workers. At the same time, we’ll also be expanding the Canada Emergency Response Benefit to reach people who are earning some income as well as seasonal workers who are facing no jobs and for those who have run out of EI recently. Expanding the CERB to include people who earn up to $1,000 per month. Maybe you’re a volunteer firefighter, or a contractor who can pickup some shifts, or you have a part-time job in a grocery store.”

Eligibility for CERB

On eligibility for CERB, the Prime Minister stated:

“If you earn $1,000 or less a month, you’ll now be able to apply for CERB.

If you were expecting a seasonal job that isn’t coming because of COVID-19, you’ll now be able to apply.

If you’ve run out of EI since January 1st, you can now apply for CERB as well

And for others who still need help, including post secondary students and businesses worried about commercial rent, we’ll have more to say to you very soon.”

Wage Boost for Essential Workers

On topping up wages for Essential Workers, PM Justin Trudeau said:

“Our government will work with the provinces and territories to boost wages for essential workers who are making under $2,500 a month, like those in our long-term care facilities”

The government website is being updated with the new qualifications, for full details and to apply click below:

Apply for CERB

Applications for the Canada Emergency Business Account starts TODAY!

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The new Canada Emergency Business Account (CEBA) is available starting TODAY and is available through major banking institutions: TD, Scotiabank, BMO, CIBC, RBC, National Bank, HSBC and Canadian Western Bank.

The CEBA will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced until December 31, 2022. Up to $10,000 of that amount will be eligible for loan forgiveness if $30,000 is fully repaid on or before December 31, 2022.

Eligibility

Organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019

How do I apply?

Prior to applying, please make sure you have this information readily available:

  • Canada Revenue Agency Business Number (BN 15 digits)

  • 2019 T4 Summary of Remuneration Paid (T4SUM)

Apply online at the financial institution your business banks with:

Rules changed to allow more struggling business owners access to CERB, Wage Subsidy. Summer jobs program increased to 100%

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Ontario Support for Families portal is LIVE!

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Today, Ontario launched the portal for parents to apply for a one-time COVID-19 payment to help offset the costs of keeping children entertained and engaged during this time away from school.

Under this new program, parents are eligible for a one-time per child payment of:

  • $200 for children aged 0 to 12

  • $250 for children or youth aged 0 to 21 with special needs

Eligibility

There is no income cap on this program. All parents are eligible if you have a child who is:

  • $200 for children aged 0 to 12

  • $250 for children or youth aged 0 to 21 with special needs

If you have more than one child, you must submit one application per child.

 Before you apply, please note:

  • only one parent can apply for each child

  • the parent who applies should have custody of the child

You are still eligible if you are a health care or front-line worker who is using emergency, 24-hour child care centres.

For Details and to apply

Accepting Applications starting April 6th – Canada Emergency Response Benefit (CERB)

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The sheer volume of applications for the Canada Emergency Response Benefit (CERB) will likely overwhelm the system. If you or someone you know need to apply for this benefit, we suggest you prepare TODAY before the applications begin:

  • Double check your myCRA account username and password

  • Direct Deposit is setup

    • 3 – 5 days via Direct Deposit vs 10 days via cheque in the mail

You should double check your myCRA username and password by signing in at:

CRA website

If you do not have direct deposit setup with CRA, you can set it up TODAY at:

setup direct deposit with cra

To help manage the volume, the CRA has setup specific days for you to apply based on month of birth.

If you were born in the month of:

  • January | February | March: Mondays – Best day to apply is April 6th

  • April | May | June: Tuesdays – Best day to apply is April 7th

  • July | August | September: Wednesdays – Best day to apply is April 8th

  • October | November | December: Thursdays – Best day to apply is April 9th

  • Fridays, Saturdays and Sundays are open for any birth month

Eligibility

The benefit will be available to workers:

  • Residing in Canada, who are at least 15 years old;

  • Who have stopped working because of COVID-19 and have not voluntarily quit their job or are eligible for EI regular or sickness benefits;

  • Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and

  • Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment or self-employment income.

Tax Loss Selling

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Over the last few weeks, the financial market has taken a downturn amidst fears over Coronavirus.

Understandably, you are concerned with your portfolio, it’s important to stay level-headed to avoid making financial missteps. However, staying level-headed doesn’t necessarily mean you sit there and do nothing. In fact, one consideration you can look is taking an active tax management approach.

Tax loss selling is a strategy to crystallize or realize any capital losses in your non-registered accounts so it can be used to offset any capital gains. There is no benefit to selling in your tax free savings account (TFSA) or registered retirement savings plan (RRSP).

You can apply capital losses back 3 years or carry them forward indefinitely, therefore we’ve outlined several situations that make sense for tax loss selling.

To better understand how tax-loss selling works, imagine a scenario in which someone invests $100,000, putting $50,000 in “Investment A” and $50,000 in “Investment B.”

At the end of one year, Investment A has risen by $10,000 and is now worth $60,000. Investment B has declined by $10,000 and is now worth $40,000.

Without tax-loss selling, the investor has a realized gain of $10,000 from Investment A, and has a potential tax bill of $1,500 (assuming he or she sells the shares and pays the 15% capital gains tax on the profit).

On the other hand, with tax-loss selling, selling Investment B to offset gains from Investment A. At the end of the year, instead of paying a $1,500 tax, the investor only has a potential tax bill of $0, for a potential tax savings of $1,500.

With the investor’s tax liability reduced by $1,500, that savings becomes money that can be invested back in the portfolio, used to maximize RRSP contributions, pay off debt, or spend as one pleases. 

What Situations make sense for tax loss selling?

  • If you have an investment with a considerable capital gain, review through your current investments to see if there are any investments to sell at a loss.

  • Receiving a tax refund for a previous year. Keep in mind, you can apply capital losses back 3 years, therefore if you sold a property within the last 3 years for a considerable gain and paid the tax. This year, you could sell other investments at a loss and apply them back and get some tax paid back.

  • For tax deferral, with tax losses you can apply these losses back 3 years or carry them forward indefinitely, therefore you may want to trigger a loss today because if you are planning to sell that property in the next year or so, it may rebound and therefore you will lose the chance to offset the gains.

  • Lastly, you may have an investment in your portfolio that’s a dud. It might be time to move on and put your money into a different investment so that you can apply the loss in the future.

Tax Loss Selling is Complicated

There are specific conditions required by CRA that must be met in order for this strategy to work such as making sure your loss is not declared a “superficial loss” (these rules are very restrictive). A superficial loss is when you sell and trigger a capital loss, you cannot deduct the loss if you or an affiliate purchase an identical security within 30 days before or after your settlement date.

Another condition is that the sale of assets is prior to the year-end deadline (this varies by calendar year). You also need to make sure you have accurate information on the adjusted cost base (ACB) of your investment. When you file your taxes, any losses must be first used to offset capital gains in the current tax year, then any remaining losses can be carried back.

Before engaging in tax loss selling, you should contact us directly so we can make the strategy works for you.

Do I Qualify for the Canada Emergency Response Benefit & EI?

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To help Canadians through this difficult time, the Federal Government created the Canada Emergency Response Benefit (CERB) and made changes to the Employment Insurance Program (EI). For those whose employment has affected by the Coronavirus, we have created a chart to help you figure out which program you qualify for and provide links to apply for each program.

The Federal Government has already made numerous changes to these programs so we will be updating this document whenever a change to the program is made.

Stay home and stay safe.

Help for Small/Medium Businesses & Entrepreneurs – 75% wage subsidy, $40,000 interest-free loan & more

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March 27, 2019 – Prime Minister Justin Trudeau announced programs and measures focused on helping Small & Medium Sized Businesses and Entrepreneurs cope with the economic consequences caused by the COVID-19 pandemic.

“With these new measures, our hope is that employers being pushed to laying off people due to COVID-19 will think again,” Trudeau said. “And for those of you who have already had to lay off workers, we hope you will re-hire them.”

Wage Subsidy increased to 75%

The Prime Minister has been under pressure from the small business community to boost the wage subsidy beyond the 10% initially announced to help keep people employed. Today, Mr. Trudeau announced the government will increase the wage subsidy from 10% to 75% to help keep employees on the payroll. This increase will be backdated to Sunday, March 15th.

“It is clear we have to do more, much more so we are bringing that percentage up to 75 per cent for qualifying businesses”

– Prime Minister Justin Trudeau

Canada Emergency Business Account (CEBA)

The CEBA will allow banks to offer $40,000 loans that will be interest-free for the 1st year which will be guaranteed by the government. If you meet certain conditions, $10,000 of the loan can be forgivable.

“To help you bridge to better times, we are launching the Canada Emergency Business Account. With this new measure banks will soon offer $40,000 which will be guaranteed by the government”

Defer GST, HST, Duty

The government will defer GST & HST payments, as well as duty and taxes owed on imports until June 2020.

“This is the equivalent of giving $30-billion of interest free loans to businesses”

Bank of Canada Rate Cut

Bank of Canada slashed its key overnight interest rate to 0.25%.

Full details and qualification requirements will be available on Monday.

Canada Emergency Response Benefit to help workers and businesses

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$2,000/month for 4 months – Canada Emergency Response Benefit to help workers and businesses

To support workers and help businesses keep their employees, the government has proposed legislation to establish the Canada Emergency Response Benefit (CERB). This taxable benefit would provide $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic. The CERB would be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

The CERB would cover Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. The CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).

Additionally, workers who are still employed, but are not receiving income because of disruptions to their work situation due to COVID-19, would also qualify for the CERB. This would help businesses keep their employees as they navigate these difficult times, while ensuring they preserve the ability to quickly resume operations as soon as it becomes possible.

The EI system was not designed to process the unprecedented high volume of applications received in the past week. Given this situation, all Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not, would be able to receive the CERB to ensure they have timely access to the income support they need.

Canadians who are already receiving EI regular and sickness benefits as of today would continue to receive their benefits and 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 who are 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.

The portal for accessing the CERB would be available in early April.

Canadians would begin to receive their CERB payments within 10 days of application. The CERB would be paid every four weeks and be available from March 15, 2020 until October 3, 2020.

Canada Emergency Response Benefit

How to apply for EI benefits for COVID-19 quarantines and other support programs

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What are EI benefits for those quarantined with COVID-19?

Employment Insurance (EI) sickness benefits provide up to 15 weeks of income replacement and is available to eligible claimants who are unable to work because of illness, injury or quarantine, to allow them time to restore their health and return to work. Canadians quarantined can apply for Employment Insurance (EI) sickness benefits.

Is there a waiting period?

For quarantine because of COVID-19, the one week waiting period is waived. Contact the new dedicated toll-free phone number if you are in quarantine and seeking to waive the one-week EI sickness benefits waiting period so you can be paid for the first week of your claim:

  • Telephone: 1-833-381-2725 (toll-free)

  • Teletypewriter (TTY): 1-800-529-3742

What benefits does EI offer?

Employment Insurance (EI) sickness benefits can provide you with up to 15 weeks of financial assistance if you cannot work for medical reasons. You could receive 55% of your earnings up to a maximum of $573 a week.

Who qualifies for EI sick-leave benefits?

Employed Canadians who pay EI premiums and self-employed people registered for access to EI may be eligible for sickness benefits.

There are a number of factors that determine eligibility. You need to demonstrate that:

  • you’re unable to work for medical reasons

  • your regular weekly earnings from work have decreased by more than 40% for at least one week

  • you accumulated 600 insured hours* of work in the 52 weeks before the start of your claim or since the start of your last claim, whichever is shorter

*As an example, 600 hours are equivalent to 20 weeks of work at 30 hours a week.

While you’re receiving sickness benefits, you must remain available for work if it weren’t for your medical condition.

If you are self-employed and pay into EI, you have to wait at least 12 months from the date of your confirmed registration before you are eligible for sickness benefits. You must also meet all of the following conditions:

  • The amount of time you spend on your business has decreased by more than 40% for at least one week because of your medical condition

  • You earned a minimum amount of self-employed earnings during the calendar year before the year you apply for benefits. To receive benefits for 2020, you need to have earned at least $7,279 in 2019

What if I don’t qualify for EI?

In April, the government will be 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, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.

  • Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not qualify for EI sickness benefits.

  • Parents with children who require care or supervision due to school or daycare 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 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.

Do you need a Doctor’s note?

According to the Government of Canada’s website, people claiming EI sickness benefits due to quarantine will not have to provide a medical certificate.

How do I get started with the application for EI to see if I qualify?

The application for Employment Insurance can be found here:

Apply for EI Benefits