With COVID-19 impacting every corner of the world and almost every sector of the economy, there’s a good chance your financial life has been affected in some way. Work, school, future plans and more have been turned upside down. If you do need financial support, whether for yourself, your family or your business, there are a number of government programs that can help during these unprecedented times.
Here’s a roundup of some of the more popular programs. Keep checking back. We will update this guide as benefits evolve and new supports are added. If you need guidance, reach out to your financial provider.
INDIVIDUALS AND FAMILIES
Canada Emergency Response Benefit (CERB)
The CERB is the most wide-ranging program available, covering individuals who can no longer work as well as those who are experiencing decreased income because of COVID-19.
Eligible recipients are able to receive $2,000 every four weeks. Recipients were originally limited to 16 weeks of payments (or $8,000) with benefits ending in October. But on June 15, the government announced it would extend the response benefit by another eight weeks, bringing the maximum length of benefits to 24 weeks (or $12,000).
You may be eligible if:
- You have been let go from a job after March 15 (CERB is currently being offered in place of Employment Insurance for those who have been laid off on or after that date).
- You are self-employed and now earn little or no income (people can earn $1,000 a month in income and still qualify).
- You had to leave work to care for children who are no longer in school.
- You are sick with COVID-19 or are taking care of someone who has fallen ill.
How to apply: Simply log in to your MyCRA account or use the Service Canada website (but not both) and follow the instructions. You must reapply every four weeks and indicate that you are still eligible to receive the CERB. Payments can arrive quickly and in many cases can be direct-deposited into your bank account.
If you are no longer eligible, either because you got a new job or have returned to work after recovering from the coronavirus, do not reapply. There may be situations – perhaps you received a cheque but found work soon after – where you could be required to repay the CERB.
On July 31, Prime Minister Trudeau announced plans to move out-of-work Canadians into the employment insurance (EI) system.
The government will also create a support program similar to EI for people, such as gig or contract workers, who’ve had access to CERB but don’t qualify for employment insurance. More details to come.
Canada Child Benefit (CCB)
The CCB isn’t a new program. Most households with children under the age of 18 are eligible for this monthly payment, the amount of which is based on your family’s annual net income. What is new is that in May, families will receive up to $300 extra per child as part of that month’s regular payment. It’s a one-time increase, so, as of now, payments in future months are not getting bumped up.
How to apply: If you have filed your 2018 taxes, the benefit will be automatically calculated and distributed. If you have not yet filed your 2018 taxes, you should file as soon as you can. You may be eligible for this or other benefits retroactively upon filing. Read the CCB’s COVID-19 page to find out more about this payment.
Mortgage and loan payment deferral
As soon as it became clear that COVID-19 would wreak havoc on Canadians’ jobs and personal finances, Canada’s major banks announced that they would consider deferring payments on mortgages and other loans by up to six months. This support is not government-sponsored – you have to phone your lender and talk to them directly. While principal and interest payments can be delayed, the interest itself will continue to accumulate, so homeowners who defer payments may have to pay a bit more in interest over the lifetime of their mortgage.
How to apply: If you are struggling to make payments, call your bank to discuss your options. There may be other, and potentially more appropriate, ways to address this situation. For example, you might speak to your financial provider about ways to lower your monthly mortgage payment or potentially lowering your interest rate. Visit TD’s COVID-19 relief page for information on this and other loan-related relief.
Extended tax filing deadlines
The tax deadline for individuals usually falls on the last day of April, but not this year. Because of the uncertainty around people’s jobs and finances, the government extended the tax filing date to June 1, 2020. If you owe money to the taxman, you will have until September 1 to pay without incurring interest or penalties. (The deadline for paying would have typically been the last day of April.) Self-employed individuals usually have slightly different deadlines than traditionally employed people, but this year the filing date remains unchanged at June 15, 2020, while the deadline for payments has been extended to September 1, 2020.
How to apply: Simply file as soon as you are able. The government can’t pay you any money it owes you until you file, so submit now and get those dollars sooner. If you owe money, you will still have to pay it – the earlier you know what you have to hand over the better. You can find out more about the new deadlines here.
Temporary wage top-up for low-income essential workers
If you are an essential worker and considered to be low-income, the federal government announced on May 7 that it will team up with provinces and territories to share the cost of wage top-ups for qualifying essential workers. Ottawa will provide up to $3 billion in support to increase essential worker wages. Each province or territory will determine which workers are eligible and how much support they will receive.
How to apply: Details are still being discussed. Check the government’s COVID-19 economic response page for more information.
Lowered RRIF withdrawals
If you have a registered retirement income fund (RRIF), or plan to open one soon, you may know that you have to withdraw a certain percentage of assets from the fund each year. After the market declined in March, the government reduced minimum withdrawal amounts by 25%. So, for example, instead of having to remove a minimum 5.28% of assets at age 71, you now have to take out 3.96%.
The government made this change because it didn’t want seniors to have to lock in losses after the market declined. By allowing people to leave more money in their RRIF, those investments may have time to rebound.
How to apply: Talk to a financial advisor to determine how this change may impact your financial plan. Find out more about the changes to RRIF withdrawal rules.
Seniors are also set to receive a one-time payment of up to $500 to help with increased costs related to the COVID-19 pandemic. Those who qualify for Old Age Security (OAS) will be eligible to receive a one-time, tax-free payment of $300. Those eligible for the Guaranteed Income Supplement (GIS) will get an extra $200. If you qualify for both you will get the full $500.
How to apply: The payments will be applied automatically and distributed starting the week of July 6, 2020.
STUDENTS & YOUTH
Canada Emergency Student Benefit (CESB)
Students may have trouble finding jobs this summer, and many won’t qualify for the CERB. On April 22, the government announced the CESB will provide financial support to students and new graduates who cannot work because of COVID-19 but are not eligible for either the CERB or EI. This cohort will receive $1,250 per month, while students with dependents or disabilities will receive an additional $750 per month.
How to apply: The details are still being discussed, so check the government’s student-focused COVID-19 page for more information.
Student loan relief
If you’ve borrowed money to pay for school, you may be happy to know that payments and interest on certain loans have been suspended until September 30, 2020. If your loan was issued in Newfoundland, New Brunswick, Ontario, Saskatchewan or British Columbia, the suspension applies to federal and provincial parts of the student loan. For Prince Edward Island, Nova Scotia, Alberta and Manitoba, this relief program only applies to the Canada Student Loan portion of the loan. For Quebec students, check here for updates.
How to apply: Since many provinces have created similar measures, visit your province’s student loan website to get the full picture. You can also visit the Canada Student Loan page to find out more.
Canada Emergency Wage Subsidy (CEWS)
If you run a business, you’ll likely want to keep your staff working, but that can be tough if your revenues have plummeted. To help employees remain on payroll, the government created the CEWS, which covers 75% of an employee’s wages up to $58,700. That works out to be $847 a week. Businesses must show that they’re doing what they can to pay the extra 25%.
A business is eligible for the CEWS if revenues have fallen by 15% in March or 30% in April and May when compared to the previous year or when compared to the average revenue in January and February of this year. Companies can also get a full refund for employer contributions of Employment Insurance, Canada Pension Plan, Quebec Pension Plan and Quebec Parental Insurance Plan for staff who are on leave with pay. The program was to run until June 6, but will now be in place until August 26. On July 8, as part of his fiscal update, Finance Minister Bill Morneau announced the federal government would further extend the CEWS. On July 13, Prime Minister Trudeau said the wage subsidy would continue until December. More details to come.
How to apply: Visit the CEWS site to find out more about this program.
Temporary 10% Wage Subsidy
There is another wage subsidy program, though it works differently than the CEWS. The Temporary 10% Wage Subsidy is a three-month program that allows eligible employers to reduce the amount of payroll deductions that must be remitted to the Canada Revenue Agency. 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. This is separate from the CEWS, so you may be able to qualify for both.
How to apply: See the government’s temporary wage subsidy site for all the details.
Canada Emergency Business Account (CEBA)
Even with wage subsidies, you may need more money to run your business. The CEBA offers interest-free loans of up to $40,000 for eligible small businesses that have paid out at least $20,000 in payroll last year and not-for-profits to help them cover operating costs. If you repay the loan before the end of 2022, 25% of the loan (up to $10,000) will be forgiven.
On May 19, Prime Minister Justin Trudeau announced that the eligibility criteria for the CEBA would be expanded. More information is expected to be announced soon.
How to apply: You can access this program through your bank. For information on TD’s program and to apply online, click here. For extra background information, visit the CEBA site.
Canada Emergency Commercial Rent Assistance (CECRA)
Paying rent has been an issue for many small business owners. The government is helping with that, too. The CECRA program lowers rent by 75% for small businesses that have experienced a 70% drop in revenue and are paying $50,000 or less in rent per month. It’s a bit of a complex program, but here’s how it works:
- Eligible commercial property owners are given forgivable loans to cover up to half of the rent owed by small businesses. The program originally covered April, May and June. It has since been extended to include July and August.
- The loans will be forgiven if the property owner reduces their tenants’ rent by at least 75% and agrees to not evict the tenant while the rent forgiveness agreement is in place.
- The small business is responsible to pay 25% of the remaining costs.
How to apply: To qualify for this program, properties must have a mortgage. The Canada Mortgage and Housing Corp, which is administering this program, will disburse the forgivable loans directly to the property owner’s mortgage lender. The CMHC has said it will find a way to help those without mortgages participate in the CECRA, but details have not yet been announced. Keep checking the CECRA site for updates and more information.
Corporate tax deferral
Like individuals, companies have been given more time to file and pay their 2019 taxes. Corporations that normally file between March and June 1 can now file by June 1, 2020. If your company owes money that comes due on or after March 18 – this may include a balance due or an installment payment – you now have until September 1 to pay without penalty. (This is for Part I-related tax only.) The Government of Canada’s website has more details.
Work Sharing (WS)
This program has been in existence for a while, but the government has recently modified its terms. WS is meant for companies that have experienced a temporary decrease in business activity for reasons beyond the employer’s control. Eligible employees who agree to reduce their normal working hours, and share available work with other staff, can receive EI benefits, despite not being laid off. The government has extended the maximum time of work-sharing agreements from 38 weeks to 76 weeks for companies impacted by COVID-19. Find out more details here.
Large Employer Emergency Financing Facility
On May 11, the federal government announced the Large Employer Emergency Financing Facility (LEEFF). The program will provide bridge financing to companies whose needs during the pandemic are not being met through conventional financing. The intent is to allow these companies to keep their operations going.
There will be restrictions. The government has made clear the measures are not a bailout and that the government should be considered a lender “of last resorts.”
In addition to strict limits to dividends, share buy-backs and executive pay, qualifying companies must be able to demonstrate that:
- They will preserve jobs
- They will respect collective bargaining agreements and worker pensions
- Financial challenges are related to COVID-19
How to apply: Details are still being discussed. Check the government’s COVID-19 economic response page for more information.
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