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Canada’s federal and provincial governments’ COVID-19 economic response The following article discusses COVID-19 financial compensation measures that were put in place by the Federal and Provincial Government as of April 1, 2020. These measures continue to change as the COVID-19 crisis continues to evolve. To fully benefit from the compensation it is recommended that you review this information with your accountant or bookkeeper. Federal government support for businesses https://www.canada.ca/en/department-finance/economicresponse-plan.html Wage subsidy – up to 75% for existing employees if sales have decreased by 30% or more On Friday, March 27, 202 the government introduced a 75% wage subsidy to all qualifying businesses in order to prevent massive layoffs. To be eligible for the wage subsidy, an employer must experience a drop of at least 30% in gross revenues due to COVID-19 in March, April or May when compared to the same month in 2019. The temporary wage subsidy covers 75% of gross T4 wages to a maximum of $847.00 per week per employee. The wage subsidy is based on yearly maximum earnings of $58,700.00. The program will be in place for 12 weeks and is retroactive to March 15, 2020 and ends on June 6, 2020. The federal government is working on a portal which will be available in the next 3-6 weeks to administer this program. Companies in the meantime will need to have the cash flow to meet payroll during this time period. The details for the wage subsidy program when available can be found at: Wage subsidy – up to 10% all other businesses The 10% wage subsidy is open to all other businesses that do not qualify for the 75% wage subsidy. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. For example, a company has five employees earning $16.00/hour or $640/week, over 13 weeks the pay is $8,320.00 per employee. The company would deduct $832.00 per employee from payroll taxes over that time equalling $4,160 in total. 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 and to a maximum of $25,000 total per employer.
Note: Associated CCPCs will not be required to share the maximum subsidy of $25,000 per employer. The wage subsidy is taxable and will need to be reported as income in the year in which the subsidy is received. Employee EI compensation for reduced work hours https://www.canada.ca/en/employment-social-development/ services/work-sharing.html The EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers such as COVID-19. Under the EI Work Sharing Program employees agree to work a reduced number of hours per week and are compensated by EI for the reduced hours. The federal government is extending the eligibility to 76 weeks, easing eligibility requirements, and streamlining the application process. For more information on the EI Work Sharing Program see: Canada Emergency Business Account The Canada Emergency Business Account was announced on March 27th and offers small businesses a $40,000 interest free loan for the first year. For more details contact your bank or see the following link: https://www.canada.ca/en/department-finance/economicresponse-plan.html Business Credit Availability Program (BCAP) ensuring businesses have access to credit The Business Credit Availability Program (BCAP) will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and mediumsized businesses. Relief measures include: ● Providing working capital loans of up to $2 million ● Flexible repayment terms, such as postponement of
20 | May 2020 | GRAPHIC ARTS MAGAZINE
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