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Canada Emergency Response Benefit and EI

The Canada Emergency Response Benefit (CERB) is a taxable benefit that provides $2,000 a month for up to four months for workers who lose income as a result of the pandemic due to job loss, illness, quarantine, caring for others (including children) and work disruption.

Canadian workers qualify whether or not they are eligible for EI.

Applications open online and by phone on April 6, with payments to arrive within five days for direct deposits and within 10 days for cheques by mail.

More information is available at www.canada.ca/coronavirus-CERB

Benefits for workers who applied for employment insurance (EI) on or after March 15 will mirror CERB payments for the first 16 weeks.

That means Canadians who would have received EI benefits below the $2,000-per-month threshold will now be bumped up to the maximum payment. Those who would normally qualify for more than $500 per week in employment insurance (the maximum benefit is $573 per week) will instead receive the CERB payment of $2,000.

EI-eligible workers will still qualify for their usual benefits, whether lower or higher than $2000-per-month, after the four-month CERB period.

Canadians who were already receiving EI will continue to do so and need not apply to the CERB, but can switch to the program if their EI benefits end before October if they remain jobless due to Covid-19.

Those whose EI benefits have run out since the start of the calendar year will qualify for CERB, as will seasonal workers who have exhausted their regular EI benefits and whose seasonal work has been disrupted by the outbreak.

Canadians who are making up to $1,000 a month will also be able to qualify.

Those applying for EI sickness benefits are no longer required to provide a medical certificate.

Those receiving non-eligible dividends will still be eligible for CERB.

Measures for businesses

Wage subsidies

The Canada Emergency Wage Subsidy is a federal benefit designed to help businesses cover up to 75% of wages and keep their employees on payroll.

The benefit will pay 75% of the first $58,700 normally earned by employees, up to $847 per week. The subsidy is expected to last for three months — retroactive from March 15 to June 6. The government said the funds will start to flow around early May.

Employers who can show that their revenues have fallen by at least 15% for the month of March — compared to either an average of January and February 2020 revenue, or compared to March 2019 revenue — will be eligible for the benefit. In April and May, employers who can show their revenues have fallen by at least 30% (against either Jan./Feb. 2020, or the same month last year) will be eligible.

Employers will receive a 100% refund for EI and CPP/QPP contributions for furloughed employees.

Employees receiving the benefit cannot apply for other unemployment benefits.

Organizations that don’t qualify for the Canada Emergency Wage Subsidy may still qualify for the previously announced wage subsidy of 10%.

Employers can apply for the wage benefit through the Canada Revenue Agency’s My Business Account portal.

Business loans

Loans for businesses are being offered through the Business Credit Availability Program (BCAP), which is providing $65 billion of support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Those agencies are providing credit through banks.

The Canada Emergency Business Account mandates government-guaranteed bank loans of up to $40,000 for small businesses. The loans will be interest-free until Dec. 31, 2022, and up to $10,000 can be waived for repayment. Businesses must demonstrate they paid between $20,000 and $1.5 million in total payroll in 2019.

These programs will be available in mid-April through businesses’ current financial institutions.

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