Tag: canada emergency wage subsidy

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TO DEBT DO US PART BUT I CAN’T PART WITH MY LIFE-CHANGING COVID-19 ECONOMIC RESPONSE PLAN

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

To debt do us part introduction

To debt do us part many times is confused with Til Debt Do Us Part. That of course was the Canadian television series created by Frantic Films for Slice in Canada, Zone Reality in the UK as well as CNBC in the United States. It was hosted by Gail Vaz-Oxlade, who weekly advised a couple that is in debt and also having troubles in their marriage or relationship.

Over the last couple of days, I read two crazy articles involving what people have done with federal coronavirus relief money. One from the United States and the other from Canada:

The title catchphrase to debt do us part seems particularly apt to me in the context of the Canadian federal government COVID-19 Economic Response Plan to assist Canadians and their companies. Especially if people are going to do crazy things with money they desperately need to live on.

With that as the backdrop, I thought it would be a good time in this Brandon’s Blog to review where we are at this stage of the pandemic and why no matter how much good information about money management there may be available to people, some will insist on to debt do us part.

This 2020 to debt do us part is something brand new

The economic pain and worry Canadians and businesses are experiencing this time around is something brand-new. It is hitting people and companies that have always made their repayments on time. To debt do us part was never part of their vocabulary or lifestyle. They’ve never needed to get a deferral. It is very unpleasant and unsettling. To debt do us part is a very real worry for every Canadian today.

Now that the majority of us have remained in quarantine, we’ve had a lot of time to look at our money behaviours. Have they transformed since we’ve been able to take a look at our cash? Are we most likely to be taking a look at it differently now moving forward? I say yes. I don’t assume any person is going to exit this COVID-19 pandemic unscathed financially.

I have been blogging for years about the need for every Canadian to have in their monthly budget a line item for putting savings into an emergency fund in case of an unforeseen crunch. Before the lockdown, many Canadians were in trouble already. In the 3rd quarter of 2019, we saw household debt to income numbers at around 176%. So that statistic means that for every single dollar we brought in, we owed $1.76. Typically, for an emergency reserve, you should have 3 to 6 months of liquid funds readily available to you. Most Canadians did not.

An emergency fund doesn’t have to be in a very low interest-bearing savings account that you can go to an ATM for. Certainly, it also didn’t need to be cash stuffed in your mattress in the house. It could have been in the form of financial investments that could be liquidated fairly quickly without suffering a loss, should an emergency arise and you needed to get your hands on some money quickly.

By an emergency situation I mean something like a major medical expense, being laid off of work or something like this coronavirus pandemic causing you a loss of earnings such as now being experienced by lots of people as our economy shut down.

The government had no choice for to debt do us part

As a result of so many people being so scared and facing to debt do us part in the face, the federal government had no choice but to come up with a support package for Canadians and Canadian companies. The combination of support programs is wrapped up in the omnibus title of the COVID-19 economic response plan. I have written before on many of the support programs. The federal assistance programs for Canadian business include:

When government support ends to debt do us part

The Canadian federal government had no choice but to provide an aid bundle for Canadians. This point highlights the truth that maybe most Canadians were not prepared with an emergency fund. To debt do us part was part of their everyday life. Unlike the two people in the articles I mentioned in the introduction to this Brandon’s Blog, I think this has been a big wake up call for a lot of people about their to debt do us part.

This is not the moment to be talking to your lender for new credit when you have too much debt. However, it is a perfect time to start thinking about your monthly after-tax income and your monthly spending. You want to get that under control so that you are not spending more than you earn and that your monthly budget has a line for your emergency fund savings. You need to first get on the solid monetary ground while the government’s support programs are still in force.

But what happens to debt do us part when the support programs and the various deferral programs offered by the banks end? In several previous blogs, I hypothesized that the Canadian government cannot end the programs on the original end dates of September 1, 2020. My feeling was that Canadian people and companies would not be ready to go from support to no support so drastically and would have to extend the programs potentially until the end of the 2020 calendar year. Some of these blogs were:

Since then, the federal government has announced several extensions to certain programs:

  • Canada Revenue Agency (CRA) is expanding the payment due day for existing year personal, company, and trust tax returns, including instalment payments, from September 1, 2020, to September 30, 2020.
  • The federal government will give eight added weeks of benefits for people whose jobs or income have actually disappeared as a result of the COVID-19 pandemic, however, only if they look for a job and take one when it’s reasonable to do so.
  • A CEWS extension that will prolong the program up until November 21, 2020, with the intent to supply additional support up until December 19, 2020.

So with these extensions providing extra support, now is the time for everyone to try to get their financial house in order.

How do people avoid to debt do us part in the first place?

I was asked recently in a Facebook business group I belong to:

How do people better put themselves in better financial health in the first place?

My answer was:

That is a great question. It all has to start with understanding clearly your monthly after-tax income, monthly expenses and having a budget that you follow. Each month the budget must include putting something away to an emergency fund and making sure that your income tax is being paid regularly. So that what you are spending is truly after-tax money. All of that can be summed up as living within your means. That goes for your business too.

So while there are still government support programs, now is the time to take a hard critical look at your financial situation and make concrete plans to try to avoid the realities of to debt do us part.

People were already teetering on solid ground. It’s most likely to underscore the value of actually meeting with an expert if you do not know how you get out of this debt on your own. Sitting down with someone like a qualified financial advisor, a community-based credit counsellor or a licensed insolvency trustee is what you need to do.

If the debt is howling at you, you need to really have a strategy to get out of it. When you intend to drop weight, you seek a weight reduction program to educate you. You may additionally choose a personal trainer to help you with an exercise program. So, why not locate somebody to assist you and educate you to shed your debt as well as keep it in control?

You do not need to do that all on your own. It’s going to take some imagination, maybe some cost-cutting, maybe some increased revenue or a combination of all of these. We’re not out of this yet, and eventually, the deferrals and support programs will end. Take action now so that you can have a clear path going forward. Nobody says it will be easy, but to debt do us part does not have to be part of your life forever.

Payday loans and credit card advances are not the answer to debt do us part

Something individuals in the red can refrain from doing is trying to go deeper into debt by raising money on a brand-new debt to repay an old one. When you already have too much debt, the only likely source for this kind of cash that I see is either cash advance on an existing charge card or a payday loan. Regardless, you will be paying a lot more interest than on the original financial obligation you are attempting to refinance.

Payday loans are extremely easy to get. You can go shopping online. You can have cash in your account within a couple of hours. The issue is, depending on the province that you’re in, these are astronomical interest rates as high as 600 percent. It might fix that short-term issue, but what you’re mosting likely to have to handle in the future normally winds up being more payday advances rolling right into a really negative situation. Very same with the cash advance from your credit card. Not as bad as payday loans, however still 20% to 29% rate of interest doing that.

The courts are shut now. Financial institutions are not chasing anybody. People are still obtaining those deferrals. You are not having to pay tax obligations. You can defer paying your tax obligations until the end of September.

So as quickly as we get back to a “new normal”, creditors will certainly begin to call. You will certainly have to pay your mortgage, your taxes and your various other costs. Will that be something people will have the ability to afford? While we still have this “break”, it is actually the very best time to look at your overall picture, your revenue and also expenditures, your month-to-month spending plan. It is additionally the best time to get the expert help you need if you can not do it on your own. This is the ideal time to map out a strong strategy.

To debt do us part summary

I hope you have found this to debt do us part Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

to debt do us part
to debt do us part

 

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THE BEST CEWS EXTENSION NEWS REVIEWED

cews extension
cews extension

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this Brandon’s Blog, please scroll to the bottom of the page and click on the podcast.

CEWS extension introduction

On Friday, July 17, 2020, the federal government made an announcement regarding the Canada Emergency Wage Subsidy (CEWS). The CEWS extension deals with both extending the date the program continues to and also amends some of its provisions.

This Brandon’s Blog discusses the proposed changes announced by Finance Minister Bill Morneau. I caution that this is merely an announcement about the Liberal government’s intention to make a legislation change. Right now there is no new legislation on the books so the final CEWS extension may look different than what was announced.

CEWS status prior to the July 17 announcement

The CEWS was put in place for an initial 12-week duration from March 15 to June 6, 2020, giving a 75-per-cent wage aid to eligible companies. In my May 20, 2020 blog, CANADA EMERGENCY WAGE SUBSIDY: HELPING YOUR COVID-19 BUSINESS RECOVERY, I wrote about Prime Minister Justin Trudeau introducing on May 15, 2020, amendments to the program to aid businesses to prepare for reopening. These companies needed to be able to rehire workers laid off when the state of an emergency closure was proclaimed.

Justin Trudeau’s May announcement was of a CEWS extension for 3 extra months to August 29. The CEWS covers 75% of a staff member’s wage or salary – as much as $847 per week – for qualified employers. For those able to in addition gain from the Temporary 10% Wage Subsidy for a period, any kind of credit taken under that program will decrease the total to be declared under the CEWS for that precise same period.

Another CEWS extension was inevitable

CEWS is just one of many support programs under the federal government’s COVID-19 Economic Response Plan. In my July 8, 2020 blog, CANADIAN BUSINESS: WHAT WILL BE THE ULTIMATE BUSINESS IN ONTARIO RECOVERY PROGRAM?, I talked about not only the inevitability of a CEWS extension but of extensions for the other government support programs. It is not that I am some insightful visionary, it is just as simple as the coronavirus is not going away. Similarly, the financial pain being experienced by entrepreneurs and their companies and by ordinary people is also not going away.

Everyone will certainly need to stand on their own 2 feet just like they needed to prior to the COVID-19 pandemic. Until the CEWS extension news last Friday, the Canadian company assistance programs were all set up to end August 31. I asked the question “What will take place then?”.

My personal idea was that the government will certainly not be able to finish the financial assistance programs that soon. Instead, I wrote they will certainly have to prolong all the programs once more. They may modify them to start the process of weaning Canadians off of COVID-19 Economic Response Plan assistance. However, they would certainly need to be extended.

I wrote that the government would not intend to extend for more than 90 days, however, Xmas would come shortly after the expiry of a 90-day extension, pandemic or no pandemic. The only part that I got wrong was that the government would not want to shut down the faucet prior to Christmas. So, I wrote that it suggested an extension until January 1, 2021. I also don’t see one thing in the CEWS extension that I predicted. That the government will accompany the new extension with an alert to every Canadian to get their affairs in order since there will certainly be no more assistance programs after December 31.

As I will explain below, I did not see such a warning in last Friday’s announcement.

The CEWS extension

The CEWS safeguards jobs by helping organizations maintain workers on the payroll and also motivating companies to re-hire employees formerly laid off. The Canadian government says that since the CEWS was launched, 3 million Canadian workers have actually had their work sustained, and that number continues to expand.

Finance Minister Bill Morneau revealed last Friday that the CEWS extension would include program changes that would widen the reach of the program. It would also offer much better-targeted assistance to ensure that more workers can return to their jobs promptly as the economy reboots.

The proposed modifications included in the Federal government’s draft proposed legislation for the CEWS extension would:

  • The CEWS extension will prolong the program until November 21, 2020, with the intent to supply additional support until December 19, 2020.
  • Make the subsidy obtainable to a more comprehensive range of companies by consisting of employers with a revenue decrease of less than 30 percent and also offering a slowly lowering base aid to all eligible employers. This would help numerous employers with less than a 30% revenue loss obtain assistance to keep employees.
  • Introduce a top-up subsidy of approximately an extra 25 percent for employers that have actually been most adversely affected by the pandemic. This would be especially practical to companies in industries that are recovering much more slowly.
  • Offer certainty to companies that have actually already made company decisions for July and August by ensuring they would not have their subsidy lower than they would have had under the previous policies.
  • Address specific concerns recognized by stakeholders.

These recommended adjustments come from consultations with labour and business representatives on making certain that the CEWS extension remains to save jobs and help with economic growth.

By helping employees shift back to their jobs and sustaining companies as they boost revenue, these adjustments go to give support to companies to have some certainty that they need to bring back workers.

There are other government subsidy programs too

The federal government continues to evaluate as well as react to the impact of COVID-19 and stands ready to take extra actions as required to maintain the economy. So, perhaps we will see announcements soon, just like the CEWS extension announcement, to extend:

Only time will tell. I will certainly keep you updated as more announcements are made.

“We are ensuring that Canadians are able to get back to work as quickly as possible. The adjustments we are proposing would ensure that the CEWS continues to address Canadians’ needs while also positioning them for growth as economies continue to gradually and safely reopen.” – Bill Morneau, Minister of Finance

CEWS extension summary

I hope you have found this CEWS extension Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Categories
Brandon Blog Post

CANADA EMERGENCY WAGE SUBSIDY: HELPING YOUR COVID-19 BUSINESS RECOVERY

The Ira Smith Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Stay healthy, well balanced and safe and secure everyone.

Introduction

Statistics Canada says the annual cost of living rate went negative in April as the economy came to a standstill in the very first full month of the pandemic. The agency says the consumer price index for April fell 0.2 percent compared with a year ago as energy rates did a nosedive. It was the very first year-over-year decline in the CPI since September 2009. As a result, on May 15, Prime Minister Justin Trudeau announced some amendments to existing Federal government support programs, including the Canada Emergency Wage Subsidy program, to help during this COVID-19 pandemic.

Millions of Canadians have actually lost their jobs due to the COVID-19 pandemic. As our economic recovery gradually begins, any place feasible to do so securely, Canadians need to return to work. Businesses opening up again safely will bring life back into the Canadian economic climate. That is exactly why the federal government generated the Canada Emergency Wage Subsidy (CEWS) (initially called the Canada Emergency Response Benefit) in March.

Canada Emergency Wage Subsidy extended

I have previously written about the federal government assistance programs to help both workers and employers. The overall umbrella name for all the programs is the COVID-19 Economic Response Plan. When the CEWS program was launched, critics quickly pointed out that it did not cover all types of businesses. They also wondered if the original program, scheduled to end June 30, was long enough to really help the economy.

On May 15, PM Trudeau introduced amendments to the program to help businesses get ready for reopening. These companies need to be able to rehire workers and with any luck perhaps hire even more than they had when the state of an emergency shutdown was declared. So, the CEWS is extended for 3 extra months to August 29. The CEWS covers 75% of an employee’s salaries– up to $847 per week – for eligible employers. For those able to additionally benefit from the Temporary 10% Wage Subsidy for a period, any credits taken under that program for a pay period will decrease the amount available to be claimed under the CEWS for that exact same time period.

The 1 part of your business your customers are most worried about

So businesses currently have some runway to get restarted. This is a good thing as businesses will certainly need funding to reactivate. Specific businesses might need a few extra staff members than they had before the shutdown. I just read this morning an article about what restaurants and other businesses may have to do to make customers feel at ease about returning.

The one area of the business that people might fear is the washroom. The article raises the following questions that should be answered before reopening:

  • How many people can be in there at one time?
  • Is every other urinal in the men’s room going to have to be sealed off?
  • Are the barriers between stalls and urinals sufficient?
  • Do the sinks have automatic taps or will patrons have to use the handles to turn on the water?

So a new job category that really hasn’t been seen much since the early 1960s might just come back – the washroom attendant. The business will have to make sure they can prove to their customers and clients that the washrooms are being cleaned on a very regular basis. Someone will have to make sure that there are only a limited number of people in a washroom at one time so that social distancing can be maintained. This could lead to new jobs!

Other amendments to the CEWS

The CEWS will ideally keep encouraging companies to rehire staff and even broaden where possible. The federal government has actually pledged, for moving forward, that it will work with company and labour stakeholders on any other changes that might be required.

Among the important things, they will certainly be looking at the 30% income drop limit for eligibility. As companies start-up, satisfying that revenue test should not be an obstacle to growth. Although all businesses require aid, certain ones could not fulfill the revenue decline test. There are two main factors. The revenue decline examination is on a monthly basis. Considering that the first half of March businesses were operating normally, many could not meet the test for that month. Startup companies probably couldn’t either.

Other businesses did not qualify not because of the revenue decline test, but because their business did not meet the original definition. So, Justin Trudeau announced broadened eligibility for the CEWS benefit. Previously, only corporations and charitable organizations were eligible employers for this wage subsidy benefit. Now the list has been expanded.

The eligible employer list has now been expanded and includes:

  • individuals (including trusts)
  • taxable corporations
  • persons that are exempt from corporate tax (Part I of the Income Tax Act), other than public institutions:
  • non-profit organizations
  • agricultural organizations
  • boards of trade
  • chambers of commerce
  • non-profit corporations for scientific research and experimental development
  • labour organizations or societies
  • benevolent or fraternal benefit societies or orders
  • registered charities
  • partnerships consisting of eligible employers

Public institutions continue to not be eligible for the subsidy. This includes municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals.

Canadian Emergency Business Account (CEBA)

In my April 13 blog, COVID 19 BUSINESS SUPPORT: CANADA EMERGENCY BUSINESS ACCOUNT REVIEW, I described the CEBA in detail, as the program then existed. On May 15, at the same time, he was announcing the extension and changes to the CEWS, PM Trudeau also announced an expansion of the CEBA program. The expansion is meant to include an important part of the Canadian economy that was previously excluded. I think the exclusion was inadvertent, in the government’s rush to get the program out. So Justin Trudeau announced that the CEBA program will also now include:

  • Sole proprietorships/partnerships.
  • Any other form of owner-operated businesses.
  • Businesses that hire contractors but not employees, so they do not have a payroll account with the Canada Revenue Agency.
  • Family-owned businesses where remuneration is paid via dividends, not salary.
  • Businesses where the proprietor uses a personal bank account for business purposes rather than a business operating account.
  • Newly created businesses.

This should go a long way to removing previous inequities in the CEBA program.

So now, the list of ineligible businesses is relatively narrow, being:

  • A government organization or body, or an entity owned by a government organization or body.
  • A union, charitable, religious or fraternal organization or an entity owned by such an organization or if it is, it is a registered T2 or T3010 corporation that generates a portion of its revenue from the sales of goods or services.
  • A business owned by any Federal Member of Parliament or Senator.
  • One that promotes violence, incites hatred or discriminates on the basis of sex, gender identity or expression, sexual orientation, colour, race, ethnic or national origin, religion, age, or mental or physical disability, contrary to applicable laws.

Summary

I hope you found this Canada Emergency Wage Subsidy Brandon’s Blog helpful. It should be of particular interest to contractors, developers and builders in Ontario.

The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. This is especially true these days.

If anyone needs our assistance, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Stay healthy, well balanced and safe and secure everyone.canada emergency wage subsidy

 

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CANADA EMERGENCY RESPONSE BENEFIT: THE COVID-19 WORKERS BENEFIT

The Ira Smith Team is fully operational and both Ira and Brandon Smith are available for telephone consultations, conference calls, and virtual meetings. Stay healthy everyone.

Canada Emergency Response Benefit introduction

Last week I wrote COVID 19 RESOURCES CHECKLIST FOR CANADIANS UNABLE TO WORK. In that Brandon’s Blog, I described the Government of Canada’s proposed help for Canadians needing financial backing to employed and self-employed people who have been impacted by the COVID-19 pandemic. I wrote the blog late on a Wednesday night. That was the night Parliament had an emergency sitting to create the legislation. The information I provided was based on the Government’s own website. When I woke up in the morning, the name of the legislation changed to the Canada Emergency Response Benefit.

So the purpose of this blog is to describe the proposed support and how this COVID 19 resources package magically appeared.

Back to the future leads us to the Canada Emergency Response Benefit CERB

When I went to bed on March 25, the Government had stated that it was going to get legislation passed to provide support to Canadians. The opposition parties indicated that they would cooperate to pass such legislation. Mixed in with the proposed wording, were wide-sweeping powers for Finance Minister Bill Morneau. If that was passed, it would have given him unprecedented spending powers not requiring Parliamentary approval. Needless to say, no Finance Minister in Canada’s history ever had such powers.

The opposition parties claimed that they were never told that would be part of the package. Especially as it had nothing to do with getting money into the people’s hands. So, they opposed that aspect of the proposed legislation. Discussions and negotiations went on all night.

The Liberal government of Prime Minister Justin Trudeau initially told everyone that they wanted to help Canadians by creating the:

  • Emergency Care Benefit
  • Emergency Support Benefit
  • EI Sickness Benefits modifications

The purpose of each “E”

The stated purpose of each “E” was as follows:

Emergency Care Benefit – Prime Minister Trudeau specified that the Emergency Care Benefit (ECB) is for those employees, who do not get Employment Insurance (EI) and do not have accessibility to paid sick leave. The brand-new ECB was to include assistance for both traditional employees and the self-employed. In the self-employed category, freelancers, professionals, consultants, part-time workers and also gig economy workers would be included. They would be given earnings protection if they are in self-isolation or in quarantine or looking after a relative in that scenario.

The ECB would provide up to $900 bi-weekly for Canadian workers that meet the criteria. The regular 1 week EI waiting time would also be forgoed.

Emergency Support Benefit – A new Emergency Support Benefit (ESB) was to be created for workers that lose their jobs and do not qualify for EI. This was mainly for the self-employed. The requirements to qualify for the ESB were not available when the Liberals wanted to pass the legislation. They obviously were scrambling. This is not a criticism, it was just the reality.

The ESB strategy was to provide 14 weeks of support as a revenue replacement device. The ESB, part of the overall COVID-19 resources plan was also being presented for those that cannot immediately apply for EI because they had coronavirus and were either self-quarantined or in hospital.

EI Sickness Benefits modifications – The Federal government had stated they would be proposing the following amendments to EI sickness benefits:

  • The one-week waiting duration for EI sickness benefits will be waived for new applicants who are quarantined so they can get the benefit for that first week of their insurance claim.
  • There will be a top priority for processing EI applications for Canadians under quarantine.
  • People getting EI sickness benefits as a result of quarantine will not have to show a medical certificate to be approved.

These proposed amendments would apply for those who have coronavirus or have entered into self-isolation, or for those that are looking after those in self-quarantine. The brand-new support, now called the Canada Emergency Response Benefit, was to help those Canadians who would otherwise not be approved for EI.

The Canada Emergency Response Benefit

When I woke up, I discovered that all the names had changed. Prime Minister Justin Trudeau announced the new Canada Emergency Response Benefit or CERB, was for those people losing income as a result of COVID-19. He claimed the aid will be in individuals’ pockets within 10 days of their applications. He said that the Canada Emergency Response Benefit will supply as a taxable benefit, $2,000 per month for those whose work has actually been affected or lost due to the COVID-19 pandemic. If you are still working, but not receiving your salary or wages due to this crisis, the Canada Emergency Response Benefit is there for you too.

He also stated that the Canada Emergency Response Benefit can be applied for through a secure government website beginning in very early April. The Federal government has yet to clear up whether the brand-new Canada Emergency Response Benefit can be accessed by people without immigration status or with perilous immigration standing.

The intent of the CERB is to encompass the proposed ECB, ESB, and the modifications for EI Sickness Benefits right into a single Canada Emergency Response Benefit program for those impacted by the coronavirus pandemic.

The Canada Emergency Response Benefit will be readily available to Canadians that:

  • reside in Canada, who are at least 15 years old;
  • have stopped working as a result of COVID-19 or are qualified for EI regular or sickness benefits;
  • had an income of at least $5,000 in 2019 or in the 12 months before the day of their application; and
  • that are or expect to be without employment or self-employment revenue for a minimum of 14 consecutive days in the first four-week duration.

The government website says that applications can begin on April 6.

canada emergency response benefit
canada emergency response benefit

Support to Businesses – the Canada Emergency Wage Subsidy

You have no doubt heard press reports and Prime Minister Trudeau, Finance Minister Bill Morneau, and other government officials talking about the wage subsidy program for support to Canadian businesses. Originally, they were talking about a 10% subsidy. To obtain the subsidy, businesses would be allowed to take a credit against the amount of income tax deducted from employees and remit the balance in the normal course.

That program changed quickly too. The government announced that rather than a 10% wage subsidy, it would increase to a 75% payroll allowance. Late last week, Prime Minister Trudeau said details would be released very soon. As recently as in his 11 AM press conference on Wednesday of this week, the PM said that Bill Morneau would hold a press conference later that same day to announce how the program will work.

As of this moment, all the government website says is:

“Providing small business with wage subsidies

We announced an up to 75 percent wage subsidy for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. This will help businesses to keep and return workers to the payroll.

More details on eligibility criteria will start with the impact of COVID-19 on sales, and will be shared before the end of the month.”

Our Finance Minister is now scrambling trying to figure out how it is all going to work. Although we are taxed heavily in Canada, there is not enough income tax deducted from each paycheque to cover a 75% subsidy!

Right now what is being floated is that the program is for businesses that can show that business revenue has decreased by at least 30%. This maximum benefit is up to $847 per week. The program will be in place for the 12-week period beginning March 15. Businesses will need to show the decline from the same months in 2019.

My current understanding is that the program is available for any Canadian business that can show that they have a 30 percent decline in revenue to be eligible for the federal government’s 75 percent wage support. There is also being proposed a 6 week wait time.

I must caution that this is just my understanding. It is only a proposal. The Liberal government did not include this kind of wage subsidy language in last week’s legislation that passed. They now have to recall Parliament in order to get this legislation passed. No doubt things will change before this is put into legislation.

That condition could be a killer for many companies and businesses. It does not take into account seasonality changes, 1-year-old startups or just differences in revenue patterns this year from the previous one. As soon as the government releases details of the program, I will write Brandon’s Blog about it.

“There’s no harm in hoping for the best as long as you’re prepared for the worst.”
Different Seasons, Stephen King

Canada Emergency Response Benefit summary

I hope you have found this Canada Emergency Response Benefit Brandon’s Blog informative and useful. The Ira Smith Team family hopes you and your family are staying safe, healthy and well-balanced. Our hearts go out to every person who has been affected either through inconvenience or personal family tragedy.

We are all part of our community and we have to all cooperate to help stop the spread of this infection. Social distancing and self-quarantining are sacrifices that are not optional. Families are physically separated from one another. I hope this information is helpful to you.

Ira Smith Trustee & Receiver Inc. has always employed clean and safe habits in our professional practice and continues to do so.

If anyone needs our assistance and is unable to go out, either through self-quarantine measures or just general precautions, rest assured that Ira or Brandon can still help you. Telephone consultations and/or virtual meetings are available for anyone wanting to discuss their personal or corporate situation.

Are you now worried about how you are going to survive? Are you worried about how long your company will be able to pay employees who are not working and meet all of its other obligations? Those worries are normal.

The Ira Smith Team understands these fears. More notably, we know the requirements of the business owner or the person who has too much individual debt. Because you are dealing with these stressful financial issues, you are anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

“Man can live about forty days without food, about three days without water, about eight minutes without air…but only for one second without hope.”
Hal Lindsey

The Ira Smith Team is totally operational and both Ira and Brandon Smith are here for a telephone consultation, conference calls and virtual meetings.

Keep healthy and safe everybody.

canada emergency response benefit
canada emergency response benefit
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