COVID-19 Update – In the Spirit of Trust
Dear Client and Friend,
I’ve been listening to speakers such as Canadian author Malcolm Gladwell and CNN’s Fareed Zakaria on the Munk Debates “The World After COVID19” on Wednesday nights www.munkdebates.com. Here are a couple of take-aways from them: Gladwell said the world just happened to be lucky to have great leaders we trusted during the second world war such as Franklin Delano Roosevelt and Winston Churchill. Zakaria was impressed how Canada’s Trudeau rolled out its $2,000 a month Canada Emergency Response Benefit so quickly to Canadians. Below I have highlighted Covid-19 relief measures that have been updated, what is down the pike, real time experiences and silver linings.
In the spirit of trust, we look to our leaders to make the best possible decisions during this very challenging time. In turn, those applying to the support programs have an obligation to meet the criteria in order to avoid any downstream repercussions, for example, future audits.
Canada Emergency Wage Subsidy (CEWS)
- This measure by the federal government was given Royal Assent over the weekend and represents the 75% wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020.
- Eligible employers will get a 75% subsidy of pre-crisis wages (based on average weekly wages paid between January 1, 2020 and March 15, 2020) paid to a maximum benefit of $847 per week between March 15 and June 6.
- The 75% subsidy also applies to new employees hired after March 15.
- For non-arm’s length employees, such as owners of companies and their families, the same subsidy applies, but the employees must have been employed prior to March 15.
- This is a sales-sensitive relief measure, based on a drop of at least 15% of sales in March 2020 and 30% for April and May. As noted in an earlier blog, the 10% wage subsidy is not based on sales.
- There are two approaches to determine the drop in sales, year-over-year, or a comparison to the average sales earned in January and February 2020.
Please click on the link below for further detail and examples:
How to apply for the CEWS? Details will become available using CRA’s My Business Account link below:
Canada Emergency Business Account
- Trudeau announced today that the eligibility for the interest-free loan up to $40,000 has been expanded to include businesses with a payroll between $20,000 and $1.5 million in 2019 (instead of $50,000 to $1 million).
- How to apply? Through your financial institution.
Down the Pike
- The Canada Emergency Response Benefit (CERB) will be expanded to include workers making up to $1,000 a month, instead of restricting it to those with no income at all as a result of Covid-19.
- The CERB will be expanded to include people with seasonal work (including students), and people whose EI has run out.
- Wages of essential health care workers, such as long-term care workers, who make less than $2,500 a month or $30,000 a year will be topped up.
- Trudeau announced today that commercial rent assistance will become available to small businesses for the months of April, May and June.
Real Time Experiences
- “Aviva Insurance Co. of Canada has stalled payments on pandemic insurance claims for 1,800 dental practices in British Columbia, saying the provincial orders given by the B.C. government to shut down non-essential services remain unclear.” (Globe and Mail, April 14, 2020)
- For a country where arguments are part of daily life, the Greeks have pulled together with lower cases and deaths than other European countries, trusting their scientists and government’s swift actions of closing schools and non-essential businesses after the first Covid-19 death, and using digital technology to reduce visits to doctors’ clinics for routine matters.
- For a country where its people traditionally trust the government, and the government trusts its people, doing the right thing is mutually respected in Sweden without enforcing extreme Covid-19 measures.
- For a wealthy country like Canada, its long-term care workers who typically don’t have access to full time work with benefits are being valued with these support programs.
I will be summarizing future government updates on the Covid-19 update page of my website.
I hope you and your families are doing well.