The Government of Canada announced the first phase of its economic response plan on March 18, 2020. In the week that followed, the Government of Canada has made some changes and provided more details. This blog provides further information on some of the programs that might be useful to employers.
Temporary Wage Subsidy
The government is providing eligible employers with a temporary wage subsidy for a period of three months. The subsidy is for 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
The government has advised that businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees' remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
EI Sickness Benefit
For employees who are eligible for Employment Insurance (EI) sickness benefits, the Government is:
- Waiving the one-week waiting period for those individuals in imposed quarantine that claim EI sickness benefits. This temporary measure will be in effect as of March 15, 2020.
- Waiving the requirement to provide a medical certificate to access EI sickness benefits.
The Federal Government has proposed legislation to establish the Canada Emergency Response Benefit (CERB). This taxable benefit would provide $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic. The CERB would be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.
The stated goal is to help businesses keep their employees as they navigate these difficult times, while ensuring they preserve the ability to quickly resume operations as soon as it becomes possible.
The portal for accessing the CERB will be available in early April and individuals will begin to receive their CERB payments within 10 days of their application. The CERB will be paid every four weeks and be available from March 15, 2020 until October 3, 2020.
CERB will provide income support to:
- workers who must stop working due to COVID19 and do not have access to paid leave or other income support.
- workers who are sick, quarantined, or taking care of someone who is sick with COVID-19.
- working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
- workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.
- wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
CERB is expected to work with, and temporarily take the place of, EI. The government has provided the following guidance:
- If you are already receiving EI regular and sickness benefits as of March 25, 2020 you will continue to receive benefits and should not apply for the CERB.
- If your EI benefits end before October 3, 2020, you can apply for the CERB once your EI benefits stop, if you are unable to return to work due to COVID-19.
- If you have already applied for EI and your application has not yet been processed, you do not need to reapply.
- If you are eligible for EI regular and sickness benefits you will still be able to access normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.
For more details about CERB see: https://www.canada.ca/en/department-finance/news/2020/03/introduces-canada-emergency-response-benefit-to-help-workers-and-businesses.html and https://www.canada.ca/en/department-finance/economic-response-plan/covid19-individuals.html#new_canada_emergency_response_benefit