May 20, 2020

COVID-19 UPDATE: Additional Financial Supports for Canadians and Small Businesses

Additional financial supports as well as expansion to existing financial supports have recently been announced in response to the COVID-19 pandemic. Here’s what we know: Canada Emergency Business Account (CEBA): […]

Additional financial supports as well as expansion to existing financial supports have recently been announced in response to the COVID-19 pandemic. Here’s what we know:

Canada Emergency Business Account (CEBA):
The Federal Government announced an expansion to the eligibility criteria for the Canada Emergency Business Account (CEBA) to include many owner-operated small businesses.

The changes to the CEBA will allow more Canadian small businesses to access interest free loans that will help cover operating costs if revenues are reduced.

The program will now be available to: sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll.

Eligibility: 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 federal government has also indicated that “…the government 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.” Specifics of this additional expansion of the CEBA program have not been announced yet.

Process: The loans are distributed through your financial institution, and expenses will be subject to verification and audit by the Government of Canada. The launch date as well as further details are still to come.

Canada Emergency Commercial Rent Assistance (CECRA):
Today, Canada Mortgage and Housing Corporation (CMHC) announced that the long-awaited CECRA portal will open on May 25, 2020. Canada Emergency Commercial Rent Assistance (CECRA) for small businesses provides relief for small businesses experiencing financial hardship due to COVID-19. It offers unsecured, forgivable loans to eligible commercial property owners to:
• reduce the rent owed by their impacted small business tenants
• meet operating expenses on commercial properties.

Property owners must offer a minimum of a 75% rent reduction for the months of April, May and June 2020. For more details on this please click here.

Support for Post-Secondary Students:
The Canada Emergency Student Benefit (CESB) provides financial support to post-secondary students, and recent post-secondary and high school graduates who are unable to find work due to COVID-19.

Eligibility: This benefit is for students who do not qualify for the Canada Emergency Response Benefit (CERB) or Employment Insurance (EI). The student must be actively looking for work to be eligible to receive the CESB.

Process: You can apply online or by phone through a My CRA Account. Here’s a link.

Support for Seniors:
The Federal Government announced a series of additional financial measures to help Canadian seniors including
• Providing additional financial support of $2.5 billion for a one-time tax-free payment of $300 for seniors eligible for the Old Age Security (OAS) pension, with an additional $200 for seniors eligible for the Guaranteed Income Supplement (GIS). This measure would give a total of $500 to individuals who are eligible to receive both the OAS and the GIS, and will help them cover increased costs caused by COVID-19.
• Temporarily extending GIS and Allowance payments if seniors’ 2019 income information has not been assessed. This will ensure that the most vulnerable seniors continue to receive their benefits when they need them the most. To avoid an interruption in benefits, seniors are encouraged to submit their 2019 income information as soon as possible and no later than by October 1, 2020

We hope everyone is safe and healthy. If you have any questions feel free to reach out to your trusted Catalyst advisor, or to to direct your email.