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Federal relief overview

The following article provides an update to COVID-19 financial compensation measures that were put in place by the Federal and Provincial Government as of April 10, 2020. These measures continue to change as the COVID-19 crisis continues. To fully benefit from the compensation it is recommended that you review this information with your Accountant or Book keeper.

On Thursday, April 16^th the Federal Government made the following announcements with regards to COVID-19 Financial Assistance:

1. Canada Emergency Commercial Rent Assistance (CECRA) – CECRA will provide support to help small and larger businesses with their rent for the months of April, May and June. This program will seek to provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), May, and June. Implementation of the program will require a partnership between the Federal Government and Provincial and Territorial Governments, which are responsible for property owner-tenant relationships. The Government is working with the Provinces and Territories to increase rent support for businesses that are most impacted by the pandemic and we will have more details sometime next week.
2. Canada Emergency Business Account (CEBA) – CEBA provides a $40,000 interest free loan to businesses. When CEBA was first introduced it was meant to assist businesses with between $50,000 and $1-million of T4 Payroll in 2019. The assistance has now been expanded to businesses with T4 Payroll of between $20,000 and $1.5 million in 2019. The qualifying T4 payroll information required can be found on your T4 Summary that is filed at the end of February. For companies that repay the balance of the loan by the end of 2022, up to $10,000 of the loan will be forgiven.

Over 195,000 CEBA loans have been approved to date. If you have not applied for the CEBA you can still apply any time. The CEBA application link can be found on your business bank’s website or on-line account. Keep your T4 Summary handy as you will require information contained in the summary to apply. Banks are stating approvals will take 5 -1 0 business days. Given the number of application being submitted it may take longer.

3. Canadian Emergency Relief Benefit (CERB) – CERB initially targeted individuals who do not have any source of income through this pandemic. This included the self-employed and sub-contractors that are not receiving EI or any other income. The Government has increased the scope to now include people who earn less than $1,000 per month. This includes people of CPP and/or OAS that are earning less than $1,000 per month.

Additionally the $2,000 per month benefit for 4 months applies to individuals that received Dividend Income and/or RRSP income in 2019 of at least $5,000.

4. 75% Wage Subsidy Program  – The 75% Wage Subsidy program when introduced required a 30% drop year over year. This has since been changed for the month of March 2020 only. To qualify for funding for March businesses now only require a decrease in sales from March 2019 to March 2020 of 15%.

Businesses and individuals should also look into the following:

1. Car Insurance – contact your Agent or Broker about a rate reduction as everyone’s driving usage has decreased. Average rate reduction is 25%.
2. Group Benefit Insurance – Insurance companies are now waiving dental and extended healthcare premiums. Businesses should confirm they are receiving these discounts.

Lastly, beware of fraudulent CRA text messages asking you to click on the link to receive a deposit. This may hack your phone. Remember CRA only sends funds through direct deposit or cheques in the mail.

Bonny Koabel CPA, CGA, is President of AKR Consulting Canada – a Mississauga, Ontario firm specializing in Government Grants, Subsidies, Tax Credits, Refunds and Rebates since 2003.