Wage subsidy program
Canadian Prime Minister Justin Trudeau is recalling Parliament to amend legislation for a wage subsidy program passed last week that has swelled into a $71-billion package for virtually all sectors of the economy, including restaurants, non-profits, charities and large corporations.
The economic aid aims help the unemployed, protect jobs of workers in shuttered businesses, and loans and liquidity measures for struggling businesses
At a news conference in Toronto on Wednesday, Finance Minister Bill Morneau said the expanded wage subsidy will cost the federal government $71-billion, but will reduce the demand and fiscal cost of a similar program (CERB) for unemployed workers.
Last week, the federal government introduced a wage program offering a 75% wage subsidy for qualifying businesses, for up to three months, taking effect on March 15. This is meant to help businesses keep and return workers to the payroll.
As of next week, the wage subsidy will be available to small or big businesses that aren’t publicly funded and can include bars and restaurants as well as charities and nonprofits.
The wage subsidy is available to companies that can demonstrate a 30-per-cent decline in revenue from last year, such as by comparing March 2019 to March 2020. Companies will need to reapply each month.
“To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022, will result in loan forgiveness of 25% (up to $10,000).”
Small businesses and not-for-profits should contact their financial institution to apply for these loans.
Note: CERB can’t be combined with the wage subsidy from businesses.
Canada Emergency Response Benefit (CERB)
The CERB pays applicants a monthly $2,000 payment to workers who wouldn’t otherwise be eligible for employment insurance for the best for months
This also applies to wage earners, contract workers, or self-employed individuals; those who’ve had to stay home without pay to self-isolate or care for loved ones; and anyone else who hasn’t been permanently laid off, but has stopped receiving paychecks.
Any Canadian who has stopped working for a 14-day period due to COVID-19 can qualify for the new benefit, which covers a period of up to 16 weeks.
The CERB applications will be open through the CRA, and Trudeau said that there will be “stiff and severe penalties” for those trying to take advantage of the system.
If applying online, with direct deposit requested, applicants can expect the payment within three to five days.
And for those who apply, you’ll need to check-in online monthly and confirm you are still out of work to continue receiving the payment.
Anyone who can’t apply online can call Canada Revenue Agency and can have their cheques mailed.