How to apply for relief via Canada’s COVID-19 Economic Response Plan &/or Canada’s Emergency Response Benefit (CERB)
The federal government unveiled its Economic Response Plan last week to help Canadians facing hardship as a result of the COVID-19 outbreak. Then, on March 25, the government proposed legislation to establish the Canada Emergency Response Benefit, aka CERB. The benefit is a more streamlined combo of the previously announced Emergency Care Benefit and the Emergency Support Benefit with an aim to make it easier for people to apply and receive money, including contract workers and the self-employed.
While there are a whole host of relief options for individuals and families that may pertain to your unique situation (e.g. child tax benefit, deferral of student loan payments, etc.), here are some important links for self-employed people and business owners.
We encourage you to go direct to the source (federally, provincially, and municipally) for the most current information, as the situation continues to evolve, and the below list isn’t exhaustive.
The CRA will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020.
Qualifying people facing unemployment (i.e. those recently laid off or have reduced hours) can apply for Employment Insurance Benefits (EI).
Eligible small businesses can apply for a wage subsidy (this amount was originally 10% of wages, but on March 27 this was boosted to 75%).
- Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will provide access to $10 billion in direct lending and other types of financial support at market rates to businesses with viable business models whose access to financing would otherwise be restricted via the Business Credit Availability Program (BCAP). This includes, but is not limited to:
This is a taxable benefit of $2,000 a month for up to 4 months (16 weeks) for eligible workers.
Applications will open on or around April 6. Individuals may apply for any period between March 15, 2020 and October 3, 2020.
- The fine print for the CERB is that to be eligible, individuals must show proof of 14 days of no income and attest to the following two questions:
- Did you have $5,000 in income in the previous year?
- Are you currently facing a situation where you do not have any income due to COVID-19.
The stipulation of zero income may be challenging for freelancers who operate with multiple contracts (particularly those who have lost bread-and-butter contracts due to COVID-19, but have maintained smaller contracts that don’t cover the cost of living). Any income, be it $5 or $5,000 renders the benefit null and void. That’s certainly food for thought for freelancers.
Curious about the COVID-19 Bill? Finance Minister Bill Morneau answers Senators’ questions in this CBC video.