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Access Wage Supplements

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  • For employees that qualify for Unemployment Insurance (650 insurable hours over the last 12 months – 12.5 hrs/wk) the one-week waiting period has been waived. EI also applies to EI-eligible employees that are infected or self-quarantine and the medical certificate is no longer required.

NEW 75% wage subsidy Definition: 

  • Under the legislation passed this week, employers that qualify for the wage subsidy include individuals (i.e. sole proprietors), certain partnerships, non-profit organizations, charities and certain Canadian-controlled private corporations (CCPCs). A CCPC is essentially a private corporation whose shares are not listed on a stock exchange, and that is owned and controlled by Canadian residents. Large CCPCs which have taxable capital of more than $15 million among their associated corporations won’t qualify for this subsidy. 

  • The subsidy is calculated manually and, under the currently-enacted legislation, the employer can choose to reduce its payroll income tax remittances to the CRA by the amount of the subsidy. The reduction of tax remittances can begin on the employer’s next remittance date (April 15th if the employer is a quarterly or monthly filer.) The amount of the wage subsidy will be included in the employer’s income and taxed in the year it is received.

  • Employers must continue to deduct all source deductions, including income taxes, CPP/QPP contributions and EI premiums from employees’ pay. The employer can only reduce remittances of federal, provincial (other than Quebec) or territorial income taxes and cannot reduce any remittances of CPP/QPP contributions or EI premiums. (Remittances to Revenu Quebec may not be reduced.)

  • While the CRA is currently working on the reporting requirements for the wage subsidy program, the employer should keep all information necessary to support its manual calculation of the subsidy. This will include records of all remuneration for the relevant period, as well as tax deductions and the number of employees.

  • If the employer chooses not to reduce current payroll remittances, it can transfer the wage subsidy to a future remittance or can request to have it paid at the end of 2020.

  • Tax Templates Inc., a Toronto company that specializes in creating specialized tax spreadsheets for professional tax advisors, has created a free worksheet that can be accessed online to help Canadian businesses and their tax advisers calculate their businesses’ wage subsidy.

  • ** NOTE: It’s possible that the mechanics of how the wage subsidy will be administered will be changed to accommodate the newly announced 75 per cent subsidy level.

  • The Canada Emergency Response Benefit (CERB) (replaces the Emergency Care Benefit and the Emergency Support Benefit) offers income support of $2000 per month for up to 4 months to those who lose pay because of the pandemic including those who are self-employed. This flat-payment benefit will be administered through the CRA and provide income support to workers (including those who are self-employed) who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits. ** - Note, however, that the CERB is not available to workers who quit their employment voluntarily.

  • The CERB will also be paid to workers (including self-employed) who may be taking care of a family member, such as an elderly parent, who is sick with COVID-19 but does not quality for EI sickness benefits, and to parents with children who require care or supervision due to school closures and are unable to earn employment income, regardless of whether they qualify for EI or not.

  • The government is aiming to have the new benefit, paid once a month, available starting April 6 with payments landing 10 days afterwards, meaning the first benefits won’t arrive until the middle of April at the earliest. Applicants will be required to attest that they meet eligibility requirements.   

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4 Alison Crt 

North Bay, Ontario