Understanding EI changes, recovery benefits and the feds’ wage subsidy

The federal government has so far enacted measures valued at almost $226 billion to mitigate the financial impacts of Covid-19. The highlights below cover employment benefits, mortgage deferrals, retirement accounts, wage subsidies and business loans.

EI and new recovery benefits

The Canada Emergency Response Benefit (CERB) has ended. The final eligibility period was Aug. 30 to Sept. 26, 2020, and the Canada Revenue Agency continues to accept and process retroactive applications for that period.

Those who still require financial support may be eligible for employment insurance (EI).

The government changed the EI program for easier access to benefits, with the changes in effect for one year.

As of Sept. 27, Canadians may be eligible for EI if they were employed for 120 insurable hours in the past 52 weeks. For those who previously received CERB, the 52-week period to accumulate insured hours will be extended.

Potential EI recipients must have stopped working through no fault of their own or to care for someone else (in the case of EI maternity, parental, sickness, compassionate care and family caregiver benefits), and be willing to work each day (in the case of EI regular benefits).

As of March 15, 2020, those applying for EI sickness benefits aren’t required to provide a medical certificate.

Those who are EI-eligible will receive a minimum of $500 weekly (before taxes), or $300 weekly (before taxes) for extended parental benefits.

Find out more about EI and Covid-19, and how to apply.

Those not eligible for EI, including the self-employed, may be eligible for three new benefits: the Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB) and Canada Recovery Caregiving Benefit (CRCB). All three benefits are taxable.

CRB provides $500 per week ($450 after 10% tax is withheld) for up to 26 weeks for workers who stopped working or had their incomes reduced by at least 50% due to Covid-19, and aren’t eligible for EI.

CRSB provides $500 per week ($450 after 10% tax is withheld) for up to two weeks for those unable to work at least 50% of the week because they contracted Covid-19, must self-isolate or have an underlying health condition that makes them more susceptible to Covid-19.

CRCB provides $500 per week ($450 after 10% tax is withheld) for up to 26 weeks per household for workers unable to work at least 50% of the week because of caregiving duties resulting from schools, daycares or care facilities being closed due to Covid-19. Alternatively, the family member may be sick, required to quarantine, or be at high risk of serious health implications because of Covid-19.

Canadians can apply for the CRB, CRSB and CRCB through the Canada Revenue Agency up until Sept. 25, 2021.

Homeowners facing financial hardship may be eligible for mortgage payment deferrals of up to six months. Note that any deferred payments get added to the mortgage’s outstanding principal balance. Homeowners must contact their lenders to find out if they qualify.

Support for seniors

The government temporarily extended the guaranteed income supplement (GIS) and allowance payments if seniors’ 2019 income information hadn’t been assessed. That way, seniors wouldn’t experience interruption of benefits.

To avoid interruption, seniors should have submitted their 2019 income information no later than Oct. 1, 2020.

The minimum withdrawal rate for RRIFs has dropped by 25% for 2020. A similar decrease applies to those receiving variable benefit payments from money purchase registered pension plans and pooled registered pension plans. Find out more.

Support for disabled people (including seniors)

People who hold a valid disability tax credit certificate (or are eligible and applied by Dec. 31, 2020), or those who were beneficiaries of the Canada Pension Plan Disability, Quebec Pension Plan Disability Pension or disability supports provided by Veterans Affairs Canada as at July 1, 2020, will receive a one-time, tax-free $600 payment to help offset extra expenses during Covid-19.

For eligible seniors, this automatic payment will be adjusted so that they receive a total of $600 in special Covid-19 payments. That means Old Age Security recipients, who previously received a one-time payment of $300, will receive another $300, and Guaranteed Income Supplement recipients, who previously received $200, will receive another $100.

Those eligible will begin receiving payments on Oct. 30, 2020.

Support for students

Changes were made to the Canada Student Loans Program as follows.

The Canada Student Grants were doubled to up to $6,000 for eligible full-time students and up to $3,600 for part-time students in 2020–21.

The Canada student grants for those with disabilities or dependents were also doubled.

Eligibility for student financial assistance was broadened by removing the student’s and spouse’s expected contributions in 2020–21.

The maximum weekly amount that can be provided to a student in 2020–21 was raised to $350 from $210.

Learn more about student aid.

Measures for businesses

Wage subsidy and other measures

The Canada Emergency Wage Subsidy (CEWS) is a federal benefit designed to help businesses cover a portion of wages and keep their employees on payroll. The benefit is retroactive to March 15, 2020, and continues until June 2021. Find out more about CEWS claims periods and calculations.

The Canada Revenue Agency has an online tool that helps business owners calculate the amount of CEWS they’ll be eligible for and preview their subsidy claims.

The work-sharing program — whereby employees whose hours get reduced by an average of 10% to 60% can claim employment insurance for lost wages — has been extended to 76 weeks from 38.

Layoff periods are extended to allow employers more time to recall laid-off employees.

Rent relief

The Canada Emergency Rent Subsidy provides rent and mortgage support until June 2021. A percentage of a business’s eligible expenses are subsidized, on a sliding scale, up to a maximum of 65% of eligible expenses. Businesses can make claims retroactively for the period that began Sept. 27 to Oct. 24, 2020.

A top-up subsidy of 25% is available to businesses temporarily shut down by a mandatory public health order.

Business loans

Loans for businesses are being offered through the Business Credit Availability Program (BCAP), which is providing support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC), available until June 2021. Those agencies are providing credit through banks.

The Canada Emergency Business Account (CEBA) offers government-guaranteed bank loans of up to $40,000 to small businesses, and the application deadline has been extended to March 31, 2021. The loans are interest-free until Dec. 31, 2022, and up to $10,000 can be waived for repayment. CEBA is available to businesses that paid between $20,000 and $1.5 million in total payroll in 2019, as well as owner-operated small businesses with no payroll, sole proprietors and family-owned corporations that pay dividends.

Applicants with $20,000 or less in payroll in 2019 must demonstrate they have eligible non-deferrable expenses between $40,000 and $1.5 million in 2020.

As of Oct. 26, 2020, eligible Canadian businesses that currently operate through a personal bank account can apply for CEBA.

The government expanded CEBA to provide additional interest-free loans of up to $20,000. Half is forgivable if repaid by Dec. 31, 2022.

Large and medium-sized businesses can apply for support through the Large Employer Emergency Financing Facility, if they have $300 million or more in revenues and maintain employment and investment activities. Mid-sized companies will also receive access to BCAP.

For mid-sized companies with credit needs that exceed BCAP support, the BDC’s mid-market financing program provides commercial loans between $12.5 million and $60 million.

For targeted business funding, including support for Indigenous and Black-led businesses, businesses in the territories and certain sectors, and women and youth entrepreneurs, consult the government’s economic response plan for Covid-19.

Also read our summary of support for businesses.