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COVID-19 Government Support for Canadian IT Contractors

Last Update: June 16, 2020

The Coronavirus disease (COVID-19) outbreak is causing drastic amounts of stress and uncertainty for everyone. We recently shared a post with ideas and resources to help deal with the anxiety, but there are many other concerns Canadian IT contractors are dealing with every day.

The Federal Government and various Provincial Governments are all taking measures and implementing programs to help Canadians through difficult times. We’re collecting these updates as they’re announced and posting them to this page.

Feel free to bookmark this page and check back often. If you have any questions, require more information, or have a lead on some support that we missed, please leave them in the comments below.

Canada Emergency Response Benefit

The Canada Emergency Response Benefit (CERB) was announced in March to provide you with $500 a week for up to 16 weeks. That 16 weeks was set to come to an end for many people in July, so on June 16th, the government announced that it would extend CERB by another 8 weeks.

Recipients for the new phase will be required to sign an attestation acknowledging the government is encouraging them to look for work and to consult with the government’s job bank. In addition, employees who make more than $1,000 a month are no longer eligible for CERB, an exception that the government had made back in April..

The Benefit is taxable although tax will not be deducted at source. You will be expected to report the Benefit as income when you file your income tax for the 2020 tax year. Those who have been receiving it in error are expected to return all money received, or else the government says there will be legal consequences.

Are you Eligible for the CERB?

To be eligible, you must:

  • Be residing in Canada
  • Be at least 15 years old
  • Stopped working as a result of reasons related to COVID-19 (if you are looking for a job but haven’t stopped working because of COVID-19, you are not eligible for the Benefit) or are eligible for Employment Insurance regular or sickness benefits
  • Have had income of at least $5,000 in 2019 or in the 12 months prior to the date of application. That income may be from any or a combination of the following sources: employment; self-employment; maternity and parental benefits and/or similar benefits paid in Quebec.
  • Be, or expect to be, without employment or self-employment income for at least 14 consecutive days in the initial four-week period.

How to Apply for the CERB

You can apply for the CERB here.

Applications for the CERB will be accepted starting April 6th and you will require a CRA My Account. The link above includes resources for setting up your account, including retriving your password, setting up an account through your My Service Canada account or setting one up from scratch. To help manage the demand, applications are being accepted based on your month of birth:

Canada Emergency Response Benefit

The Canada Emergency Business Account (CEBA)

CEBA provides much needed credit for small businesses to pay for immediate operating costs such as payroll, rent, utilities, insurance, property tax, or debt service. It is 100 per cent funded by the Government of Canada. Under CEBA, financial institutions will be able to provide interest-free credit facilities of up to $40,000 to eligible businesses. If the loan is repaid by December 31, 2022, 25 per cent (up to $10,000) will be forgiven. If the loan is not repaid by December 31, 2022, the remaining balance will be converted to a three-year term loan at 5 per cent interest. This program is now available at various financial institutions and credit unions.

On May 19th, the government announced an expansion to the eligibility criteria for CEBA to include many owner-operated small businesses. To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:

  • a business operating account at a participating financial institution
  • a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return.
  • eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.

The government says it will work on potential solutions to help business owners and entrepreneurs who operate through their personal bank account, as opposed to a business account, or have yet to file a tax return, such as newly created businesses.

The 10% Temporary Wage Subsidy for Employers

This is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the CRA. The subsidy is equal to 10% of the remuneration you pay from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee to a maximum of $25,000 total per employer. If you receive the subsidy, you have to report the total amount as income in the year in which the subsidy is received.

You do not need to apply for the subsidy. The subsidy must be calculated manually, either by you or whoever is responsible for making your payroll remittances. The CRA will not automatically calculate the allowable subsidy. Once you have calculated your subsidy, you can reduce your current payroll remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy. You will need to keep information to support your subsidy calculation.

If you are an eligible employer, but choose not to reduce your payroll remittances during the year, you can still calculate the 10% Temporary Wage Subsidy for Employers on remuneration paid from March 18, 2020 to June 19, 2020. At the end of the year, the CRA will pay the amount to you or transfer it to your next year’s remittance.

Canada Emergency Wage Subsidy (CEWS) 

Incorporated independent contractors who pay themselves a salary may be eligible for a subsidy of 75% of employee wages for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020. This benefit will apply on the first $58,700 earned or up to $847 a week. There is no ceiling to the amount that an eligible employer can claim.

To be eligible, you must have experienced an eligible reduction in revenue and have had a CRA payroll account on March 15, 2020. You can learn if you qualify and how to calculate teh CEWS here.

Contacting Service Canada

Service Canada is temporarily closing in-person Service Canada Centres to allow them to better prioritize capacity and to ensure critical service delivery to vulnerable clients. You can apply for critical services online and Citizen Service Officers will be providing personalized service support for EI and pensions applications through an e-service available online and on mobile phone. To support access to critical programs and services for clients without access to technology, Service Canada Community Outreach and Liaison Service staff are contacting communities to offer alternate service delivery methods that will continue to support accessing critical programs, services and benefits. Service Canada is also warning that call volumes are expected to be high for the foreseeable future. Please visit Canada.ca for information. If you have difficultly getting through, please try again later

Emergency Isolation Support (Alberta)

Eligible working Albertans can receive a one-time emergency isolation support payment of $1,146 if they are required to self-isolate or are the sole caregiver of someone in self-isolation and they have no other source of pay or compensation. This is a temporary program to bridge the gap until the Federal Emergency Care Benefit is available in April. If you are eligible for federal Employment Insurance benefits, you are strongly encouraged to apply immediately.

Temporary Aid for Workers Program (Quebec)

This program, offered by the Gouvernement du Québec in partnership with the Red Cross, offers financial assistance to meet the needs of workers who, because they are in isolation to counter the propagation of the COVID-19 virus, cannot earn all of their work income and are not eligible for another financial assistance program, including EI. The lump-sum amount granted to an eligible person is $573 per week, for a period of 14 days of isolation. If justified by your state of health, the coverage period for an eligible person could be extended to a maximum of 28 days. Workers can start by filling out the application form here.

British Columbia Emergency Benefit for Workers

The B.C. Emergency Benefit for Workers will provide a one-time $1,000 payment to people who lost income because of COVID-19. Applications for the one-time payment will open soon.

Deferred Due Date for Taxes

Canada Revenue Agency is deferring the filing due date for individuals until June 1st. Furthermore, the CRA will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing right now and before September 2020.

Mortgage and Credit Relief at Banks

Banks in Canada have affirmed their commitment to working with customers to provide flexible solutions, on a case-by-case basis. This includes up to a 6-month payment deferral for mortgages and opportunity for relief on other credit products. Contact your local bank branch if you require any assistance.

Job Protected Leave

Most provinces have implemented protected leave for workers who need to take time off to due to quarantines or COVID-19 illnesses. In Alberta, this does not require a doctor’s note nor is there a requirement to have worked for an employer for 90 days. The leave covers the 14-day self-isolation period recommended by Alberta’s chief medical officer and may be extended if the advice of the chief medical officer changes. Similarly, in Ontario, employees are not be required to provide a medical note if they take the leave and the measures would be retroactive to January 25, 2020. In BC, the COVID-19 leave is retroactive to January 27, 2020, the date that the first presumptive COVID-19 case was confirmed in British Columbia. During this public health emergency, employees can take this job-protected leave for the reasons above as long as they need it, without putting their job at risk.

Childcare

The Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child. The overall increase for families receiving CCB will be approximately $550 on average; these families will receive an extra $300 per child as part of their May payment.

In the Province of Ontario, the government is providing a one-time payment of $200 per child up to 12 years of age, and $250 for those with special needs, including children enrolled in private schools.

Ontario Renewal Extensions

The province of Ontario is providing extensions for driver licences, licence plate validation, Ontario Photo Cards, and Commercial Vehicle Operator Registration certificates, among others. In addition, expiring and expired health cards will continue to provide access to health services.

This extension will be in place until such time that, based on the advice of Ontario’s Chief Medical Officer of Health and public health officials, the current situation improves.

Alberta Utility Payment Holidays

In Alberta, residential customers can defer electricity and natural gas bill payments for the next 90 days to ensure no one will be cut off, regardless of the service provider.

Relief from the Ontario Energy Board

The OEB extended the winter ban on electricity disconnections for non-payment for all residential customers to July 31, 2020. Low-volume, small business customers will now also be protected by the ban. In addition, the OEB is calling on distributors to be more flexible on arrears payment arrangements. The Ontario Ministry of Energy, Northern Development and Mines is looking at programs and policies to support electricity customers during the COVID-19 pandemic and information should be coming shortly.

Additional Resources

4 thoughts on “COVID-19 Government Support for Canadian IT Contractors

  1. As questioned by the Globe and Mail rep today in the daily PM scrum, what is the need for online applications and browsers issues when CRA has a database of tax filers with names and addresses. Why add another layer of admin in order to get any of the promised help in a timely manner if any help is received at all. These concerns need to be fed back to the powers that be.

    1. Hi Randy, it looks like it will be April before we get the toll free number to apply for the Emergency Care Benefit. The easiest route will probably be online, either through the CRA MyAccount Portal (if you file your taxes online, you should have access to this already) or through your My Service Canada Account (there’s a spot for new users to sign-up in the middle of the page at https://www.canada.ca/en/employment-social-development/services/my-account.html

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