Applications for the new Canada Emergency Rent Subsidy starts today!

For businesses, non-profits and charities facing uncertainty and economic challenges due to COVID-19, the Government of Canada is now taking applications for the new Canada Emergency Rent Subsidy (CERS). The CERS delivers direct and targeted rent support without the need to claim assistance through landlords and provides:

  • up to 65% of rent for businesses, charities and non-profits impacted by COVID-19.

  • an additional 25% Lockdown Support during a public health lockdown order.

From the canada.ca website:

Canada Emergency Rent Subsidy (CERS)

Canadian businessesnon-profit organizations, or charities who have seen a drop in revenue due to the COVID-19 pandemic may be eligible for a subsidy to cover part of their commercial rent or property expenses, starting on September 27, 2020, until June 2021.

This subsidy will provide payments directly to qualifying renters and property owners, without requiring the participation of landlords.

If you are eligible for the base subsidy, you may also be eligible for lockdown support if your business location is significantly affected by a public health order for a week or more.

Eligibility criteria

To be eligible to receive the rent subsidy, you must meet all four of the following criteria – you:

  1. Meet at least one of these conditions:

    • You had a CRA business number on September 27, 2020

      OR

    • You had a payroll account on March 15, 2020, or another person or partnership made payroll remittances on your behalf

      OR

    • You purchased the business assets of another person or partnership who meets condition 2 above, and have made an election under the special asset acquisition rules
      These special asset acquisition rules are the same for the Canada Emergency Wage Subsidy (CEWS).
      OR

    • You meet other prescribed conditions that might be introduced
      Note: there are no prescribed conditions at this time

    If you don’t have a business number but you qualify under condition b or c, you will need to set one up before you are able to apply for CERS. You do not need a payroll account to apply for CERS.

  2. Are an eligible business, charity, or non-profit (eligible entity)

    Check which types of businesses, charities, or non-profits are eligible

    If your business, charity, or non-profit is related to another eligible entity, you may be considered an “affiliated entity”. This may affect your calculations for the subsidy.

    Learn more about affiliated entities

  3. Experienced a drop in revenue

    Your drop in revenue is calculated by comparing your eligible revenue during the reference period with your eligible revenue from a previous period (baseline revenue).

    There is no minimum revenue drop required to qualify for the subsidy. The rate your revenue has dropped is only used to calculate how much subsidy you receive for these periods.

    Calculate your revenue drop online

    After you have read about the expenses you can claim, you can use the online calculator to find your revenue drop while calculating how much subsidy you may receive.

    OR

    Read about the calculation

    You can read the in-depth details of how the revenue drop is calculated.

    Check what counts as eligible revenue

    A CERS application must be filed no later than 180 days after the end of a claim period.

  4. Have eligible expenses

    To apply for CERS, you must have a qualifying property. Only certain expenses you pay for qualifying properties are eligible for CERS.
    Learn about qualifying properties and which expenses you can claim

The full details of the CERS can be found at: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-rent-subsidy.html

Self Owned vs. Bank Owned Mortgage Insurance

Before buying insurance from your bank to cover your mortgage, understand the difference between self owned mortgage life insurance and bank owned life insurance. The key differences are ownership, premium, coverage, beneficiaries and portability.

Ownership:

  • Self: You own and control the policy.

  • Bank: The bank owns and controls the policy.

Premium:

  • Self: Your premiums are guaranteed at policy issue and discounts are available based on your health.

  • Bank: Premiums are not guaranteed and there are no discounts available based on your health.

Coverage:

  • Self: The coverage that you apply for remains the same.

  • Bank: The coverage is tied to your mortgage balance therefore it decreases as you pay down your mortgage but the premium stays the same.

Beneficiary:

  • Self: You choose who your beneficiary is and they can choose how they want to use the insurance benefit.

  • Bank: The bank is beneficiary and only pays off your mortgage.

Portability:

  • Self: Your policy stays with you regardless of your lender.

  • Bank: Your policy is tied to your lender and if you change, you may need to reapply for insurance.

We’ve created an infographic about the difference between personally owned life insurance vs. bank owned life insurance.

Talk to us, we can help.

Applications for Canada Recovery Benefit now open!

The Canada Recovery Benefit (CRB) is now open for applications.

As described on the Canada.ca website, the CRB gives income support to employed and self-employed individuals who are directly affected by COVID-19 and are not entitled to Employment Insurance (EI) benefits. The CRB is administered by the Canada Revenue Agency (CRA).

This program replaces the Canada Emergency Response Benefit (CERB) and, if eligible, provides $1,000 ($900 after taxes withheld) for a 2-week period.

If your situation continues past 2 weeks, you will need to apply again. You may apply up to a total of 13 eligibility periods (26 weeks) between September 27, 2020 and September 25, 2021.

Eligibility

To be eligible for the CRB, you must meet all the following conditions for the 2-week period you are applying for:

  • During the period you’re applying for:

    • you were not working for reasons related to COVID-19 OR

    • you had a 50% reduction in your average weekly income compared to the previous year due to COVID-19

  • You did not apply for or receive any of the following:

    • Canada Recovery Sickness Benefit (CRSB)

    • Canada Recovery Caregiving Benefit (CRCB)

    • short-term disability benefits

    • workers’ compensation benefits

    • Employment Insurance (EI) benefits

    • Québec Parental Insurance Plan (QPIP) benefits

  • You were not eligible for EI benefits

  • You reside in Canada

  • You were present in Canada

  • You are at least 15 years old

  • You have a valid Social Insurance Number (SIN)

  • You earned at least $5,000 in 2019, 2020, or in the 12 months before the date you apply from any of the following sources:

    • employment income (total or gross pay)

    • net self-employment income (after deducting expenses)

    • maternity and parental benefits from EI or similar QPIP benefits

  • You have not quit your job or reduced your hours voluntarily on or after September 27, 2020, unless it was reasonable to do so

  • You were seeking work during the period, either as an employee or in self-employment

  • You have not turned down reasonable work during the 2-week period you’re applying for

You need all of the above to be eligible for the CRB.

New Canada Emergency Rent Subsidy | Wage Subsidy extended | CEBA additional $20,000 loan

On October 9th, the Federal Government announced the new Canada Emergency Rent Subsidy (CERS), the extension of the Canada Emergency Wage Subsidy (CEWS) and additional loans through the Canada Emergency Business Account (CEBA).

New Canada Emergency Rent Subsidy for businesses

The Canada Emergency Rent Subsidy (CERS) is the replacement for the Canada Emergency Commercial Rent Assistance (CECRA).

When launched, the new program will allow businesses to apply directly for rent relief through CRA. The original CECRA faced criticism because it required landlords to apply for the assistance and absorb a 25% reduction in rent which may explain the low uptake.

Prime Minister Justin Trudeau stated that the new rent subsidy will be available for businesses that continue to experience revenue decline due to COVID-19. From Canada.ca:

  • The new Canada Emergency Rent Subsidy, which would provide simple and easy-to-access rent and mortgage support until June 2021 for qualifying organizations affected by COVID-19. The rent subsidy would be provided directly to tenants, while also providing support to property owners. The new rent subsidy would support businesses, charities, and non-profits that have suffered a revenue drop, by subsidizing a percentage of their expenses, on a sliding scale, up to a maximum of 65 per cent of eligible expenses until December 19, 2020. Organizations would be able to make claims retroactively for the period that began September 27 and ends October 24, 2020.

  • A top-up Canada Emergency Rent Subsidy of 25 per cent for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65 per cent subsidy. This follows a commitment in the Speech from the Throne to provide direct financial support to businesses temporarily shut down as a result of a local public health decision.

Allowing businesses to apply for the rent subsidy directly will make obtaining support for those in need as straightforward and simple as possible.

The new CERS is set to be available until June 2021.

Canada Emergency Wage Subsidy extended to June 2021

The Canada Emergency Wage Subsidy (CEWS) will continue to provide wage relief for employers until June 2021. As well, the subsidy will remain at the current rate of up to a maximum of 65% of eligible wages until December 19th and will not decrease on a sliding scale as previously planned.

Canada Emergency Business Account – additional $20,000 interest-free loan

The Canada Emergency Business Account (CEBA) will be expanded to provide an additional $20,000 loan with $10,000 forgivable if repaid by December 31, 2022. Additionally, the application deadline for CEBA is being extended to December 31, 2020. Businesses applying for the loan will be required to prove they have faced income loss caused by COVID-19.

Applications for Canada Recovery Sickness Benefit and Caregiving Benefit starts today!

Starting October 5, 2020, the Government of Canada will be accepting online applications for the Canada Recovery Sickness Benefit (CRSB) and the Canada Recovery Caregiving Benefit (CRCB).

From Canada.ca:

Canada Recovery Sickness Benefit (CRSB)

The Canada Recovery Sickness Benefit (CRSB) gives income support to employed and self-employed individuals who are unable to work because they’re sick or need to self-isolate due to COVID-19, or have an underlying health condition that puts them at greater risk of getting COVID-19. The CRSB is administered by the Canada Revenue Agency (CRA).

If you’re eligible for the CRSB, you can receive $500 ($450 after taxes withheld) for a 1-week period.

If your situation continues past 1 week, you will need to apply again. You may apply up to a total of 2 weeks between September 27, 2020 and September 25, 2021.

Eligibility:

To be eligible for the CRSB, you must meet all the following conditions for the 1-week period you are applying for:

  • You are unable to work at least 50% of your scheduled work week because you’re self-isolating for one of the following reasons:

    • You are sick with COVID-19 or may have COVID-19

    • You are advised to self-isolate due to COVID-19

    Who can advise you to self-isolate

    • You have an underlying health condition that puts you at greater risk of getting COVID-19.

    Who can advise you to stay at home due to your health condition

  • You did not apply for or receive any of the following for the same period:

    • Canada Recovery Benefit (CRB)

    • Canada Recovery Caregiving Benefit (CRCB)

    • short-term disability benefits

    • workers’ compensation benefits

    • Employment Insurance (EI) benefits

    • Québec Parental Insurance Plan (QPIP) benefits

  • You reside in CanadaDefinition

  • You were present in Canada

  • You are at least 15 years old

  • You have a valid Social Insurance Number (SIN)

  • You earned at least $5,000 (before deductions) in 2019, 2020, or in the 12 months before the date you apply from any of the following sources:

    • employment income

    • self-employment income

    • maternity and parental benefits from EI or similar QPIP benefits

    What counts towards the $5,000

  • You are not receiving paid leave from your employer for the same period

You need all of the above to be eligible for the CRSB.

Canada Recovery Caregiving Benefit (CRCB)

The Canada Recovery Caregiving Benefit (CRCB) gives income support to employed and self-employed individuals who are unable to work because they must care for their child under 12 years old or a family member who needs supervised care. This applies if their school, regular program or facility is closed or unavailable to them due to COVID-19, or because they’re sick, self-isolating, or at risk of serious health complications due to COVID-19. The CRCB is administered by the Canada Revenue Agency (CRA).

If you’re eligible for the CRCB, your household can receive $500 ($450 after taxes withheld) for each 1-week period.

If your situation continues past 1 week, you will need to apply again. You may apply up to a total of 26 weeks between September 27, 2020 and September 25, 2021.

Eligibility:

To be eligible for the CRCB, you must meet all the following conditions for the 1-week period you are applying for:

  • You are unable to work at least 50% of your scheduled work week because you are caring for a family member

  • You are caring for your child under 12 years old or a family member who needs supervised care because they are at home for one of the following reasons:

    • Their school, daycare, day program, or care facility is closed or unavailable to them due to COVID-19

    • Their regular care services are unavailable due to COVID-19

    • The person under your care is:

      • sick with COVID-19 or has symptoms of COVID-19

      • at risk of serious health complications if they get COVID-19, as advised by a medical professional

      • self-isolating due to COVID-19

    Who can advise a person under your care to self-isolate

  • You did not apply for or receive any of the following for the same period:

    • Canada Recovery Benefit (CRB)

    • Canada Recovery Sickness Benefit (CRSB)

    • short-term disability benefits

    • workers’ compensation benefits

    • Employment Insurance (EI) benefits

    • Québec Parental Insurance Plan (QPIP) benefits

  • You reside in CanadaDefinition

  • You were present in Canada

  • You are at least 15 years old

  • You have a valid Social Insurance Number (SIN)

  • You earned at least $5,000 (before deductions) in 2019, 2020, or in the 12 months before the date you apply from any of the following sources:

    • employment income

    • self-employment income

    • maternity and parental benefits from EI or similar QPIP benefits

    What counts towards the $5,000

  • You are the only person in your household applying for the benefit for the weekWhat is considered a household for this benefit

  • You are not receiving paid leave from your employer for the same period

You need all of the above to be eligible for the CRCB.

Canada Recovery Benefit (CRB)

The CRB provides $500 per week for up to 26 weeks for workers who have stopped working or had their income reduced by at least 50% due to COVID-19, and who are not eligible for Employment Insurance (EI).

Applications will open on October 12

The Difference between Segregated Funds and Mutual Funds

Segregated Funds and Mutual Funds often have many of the same benefits however there are key differences you should consider:  

  • Both are managed by investment professionals. 

  • You can generally redeem your investments and get your current market value at any time. 

  • You can use them in your RRSP, RRIF, RESP, RDSP, TFSA or non-registered account. 

There are key differences including:

  • Guarantees

  • Contract

  • Fees

  • Resets

  • Creditor Protection

  • Probate

Contract:

  • Segregated Funds: Policy owner, Annuitant and Life Insurance company

  • Mutual Funds: Account holder, Mutual fund and Investment Company

Fees

  • Segregated Funds: Management Expense Ratio & Insurance Fee (Typically higher)

  • Mutual Funds: Management Expense Ratio

Why is this important?  

Since Segregated funds are offered by life insurance companies, they are individual insurance contracts. Which means….

  • Maturity Guarantees

  • Death Benefit Guarantees

  • Maturity and death benefit resets

  • Potential Creditor Protection (depends on the setup)

  • Ability to Bypass Probate

Mutual Funds do not have these features with the exception of possible creditor protection of RRSP, RRIF dependant on provincial legislation.

What are these features?

Maturity and Death Benefit Guarantees mean the insurance company must guarantee at least 75% of the premium paid into the contract for at least 15 years upon maturity or your death. 

Resets means you have the ability to reset the maturity and death benefit guarantee at a higher market value of the investment.

Potential Creditor Protection is available when you name a beneficiary within the family class, there are certain restrictions associated with this. 

Bypass Probate: since you name a beneficiary to receive the proceeds on your death, the proceeds are paid directly to your beneficiary which means it bypasses your estate and can avoid probate fees. 

We can help you decide what makes sense for your financial situation. 

Throne Speech: Recovery Plan Highlights

On September 23rd, in a speech delivered by Governor General Julie Payette, Prime Minister Justin Trudeau outlined the Federal government’s priorities focused on four foundations:

  • Fighting the pandemic and saving lives;

  • Supporting people and businesses through the emergency “as long as it lasts, whatever it takes”; 

  • “Building back better” by creating jobs and strengthening the middle class;

  • Standing up for Canadian values, including progress on reconciliation, gender equality, and systemic racism.

Below, we highlight the support programs that help those Canadians who are struggling financially due to the pandemic.

Canada Emergency Wage Subsidy extended to next summer

The Canada Wage Subsidy (CEWS) will be extended to summer 2021. Under new program criteria, businesses with ANY revenue decline will be eligible. However, the amount of the subsidy will be based on the revenue drop rather than the original 75%.

Canada Recovery Benefit increased to $500/week

The day after the Throne Speech, in a bid for opposition support, the federal government announced it will increase the new Canada Recovery Benefit (CRB) to $500/week for up to 26 weeks.

In order to qualify for this program, Canadians must be looking for work and had stopped working or had their income reduced by 50 per cent or more due to COVID-19, but are still making some money on their own.

Canada Recovery Sickness Benefit

The Canada Recovery Sickness Benefit (CRSB) will provide $500/week for up to 2 weeks for workers who are unable to work because they are sick or must isolate due to COVID-19.

Canada Recovery Caregiving Benefit

The Canada Recovery Caregiver Benefit will provide $500/week for up to 26 weeks per household to eligible workers who cannot work because they must provide care to children or family members due to the closure of schools, day cares or care facilities.

Creating a new Canadian Disability Benefit

The government pledged to bring in a new Canadian Disability Benefit (CDB) that will be modelled after the guaranteed income supplement (GIS) for seniors.

The CRB, CRSB, CRCB and CDB are pending the passage of legislation in the House of Commons and Senate.

CEBA extended to October 31st. Expanded to include more businesses.

On August 31st, Deputy Prime Minister and Minister of Finance Chrystia Freeland announced the extension of the Canada Emergency Business Account (CEBA) to October 31st, 2020. This will give small businesses 2 additional months to apply for the $40,000 loan.

In addition, the Federal Government said it was working with financial institutions to make the CEBA program available to those with qualifying payroll or non-deferrable expenses that have so far been unable to apply due to not operating from a business banking account.

Apply online at the financial institution your business banks with:

Salary vs Dividend

As a business owner, you have the ability to pay yourself a salary or dividend or a combination of both. In this article and infographic, we will examine the difference between salary and dividends and review the advantages and disadvantages of each.

When deciding to pay yourself as a business owner, please review these factors:

  • How much do you need?

  • How much tax?

  • Other considerations including retirement and employment insurance.

How much do you need?

Determine your cash flow on a personal and corporate level.

  • What’s your personal after-tax cash flow need?

  • What’s your corporate cash flow need?

How much tax?

Figure out how much you will pay in tax. Business owners understand that tax is a sizeable expense.

  • What’s your personal income tax rate?

Depending on the province you reside in and your income, make sure you also include income from other sources to determine your tax rate. (Example: old age security, pension, rental, investment income etc.)

If you decide to pay out in dividends, check if you will be paying out eligible or ineligible dividends. The taxation of eligible dividends is more favorable than ineligible dividends from an individual income tax standpoint.

  • What’s your corporation’s income tax rate?

For taxation year 2020, the small business federal tax rate is 9% . Please also remember, if you pay out salary, salary is considered a tax-deductible expense, therefore this will lower the corporation’s taxable income versus paying out dividends will not lower the corporation’s taxable income.

Other considerations

If you pay yourself a salary, these options are available.

  • Do you need RRSP contribution room?

As part of this, it’s worth considering ensuring that you receive a salary high enough to take full advantage of the maximum RRSP annual contribution that you can make.

  • Are you interested in contributing to the Canada Pension Plan?

This is unique to your circumstances and a cost-benefit analysis to determine the amount of contributions makes sense.

  • Do you need employment insurance (EI)?

For shareholders owning more than 40% of voting shares, EI is optional. There are situations worth careful thought such as maternity benefit, parental benefit, sickness benefit, compassionate care benefit, family caregiver benefit for children or family caregiver benefit for adults.

The infographic below summarizes the difference between Salary vs. Dividend.

We would also advise that you get in touch with your accountant to help you determine the best mix for your unique situation.

CERB transitions to NEW Recovery Benefits and EI

CERB extended by 4 weeks

On August 20th, the Federal Government announced the extension of the Canada Emergency Response Benefit (CERB) by one month and the subsequent transition, on September 27th, to a simplified Employment Insurance (EI) Program for those who remain unable to work and are eligible.

Temporary revised EI benefit qualifications:

  • 120 hours of work required to qualify

  • Minimum benefit rate of $400 per week

  • At least 26 weeks of regular benefits

Canada Recovery Benefit

Effective September 27th, 2020 for 1 year, the Canada Recovery Benefit will provide $400 / week for up to 26 weeks for those who are not eligible for EI, like self-employed and gig economy workers.

Eligibility from canada.ca:

“The benefit would be available to residents in Canada who:

  • are at least 15 years old and have a valid Social Insurance Number (SIN);

  • have stopped working due to the COVID-19 pandemic and are available and looking for work; or are working and have had a reduction in their employment/self-employment income for reasons related to COVID-19;

  • are not eligible for Employment Insurance;

  • had employment and/or self-employment income of at least $5,000 in 2019 or in 2020; and,

  • have not quit their job voluntarily.

Workers would apply after every two-week period for which they are seeking income support and attest that they continue to meet the requirements. In order to continue to be eligible for the benefit the claimant wound need to look for and accept work when it is reasonable to do so. The benefit is taxable.”

Canada Recovery Sickness Benefit

Effective September 27th, 2020 for 1 year, the new Canada Recovery Sickness Benefit will provide $500 / week for up to 2 weeks for workers who are unable to work because they are sick or must isolate due to COVID-19.

Eligibility from canada.ca:

“The benefit would be available to:

  • Residents in Canada who are at least 15 years of age and have a valid Social Insurance Number (SIN);

  • Workers employed or self-employed at the time of the application; and

  • Workers who earned at least $5,000 in 2019 or in 2020.

Workers would not be required to have a medical certificate to qualify for the benefit. Workers could not claim the Canada Recovery Sickness Benefit and receive other paid sick leave for the same benefit period. Workers would need to have missed a minimum of 60% of their scheduled work in the week for which they claim the benefit.

Workers would apply after the one-week period in which they are seeking income support and attest that they meet the requirements. The benefit would taxable.”

Canada Recovery Caregiving Benefit

Effective September 27th, 2020 for 1 year, the new Canada Recovery Caregiver Benefit will provide $500 / week for up to 26 weeks per household to eligible Canadians.

The news release from canada.ca, states that:

“The closure of schools and other daycare and day program facilities to prevent the spread of COVID 19 has meant that many Canadians have been unable to work because they needed to provide care to children or support to other dependents who had to stay home. While it is anticipated that facilities will gradually re-open as the economy restarts, the Government of Canada recognizes that access may vary over time and across communities. The Government is committed to ensuring that parents and others with dependents do not need to choose between caring for them and paying the bills.”

Eligibility from canada.ca:

In order to be eligible for the Canada Recovery Caregiving Benefit, individuals would need to:

  • reside in Canada;

  • be at least 15 years of age on the first day of the period for which they apply for the benefit;

  • have a valid Social Insurance Number;

  • be employed or self-employed on the day immediately preceding the period for which the application is made;

  • have earned at least $5,000 in 2019 or in 2020;

  • have been unable to work for at least 60% of their normally scheduled work within a given week because of one of the following conditions:

    • they must take care of a child who is under 12 years of age on the first day of the period for which the benefit is claimed:

      • because their school or daycare is closed or operates under an alternative schedule for reasons related to the COVID-19 pandemic;

      • who cannot attend school or daycare under the advice of a medical professional due to being at high risk if they contract COVID-19; or

      • because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic; or

    • they must provide care to a family member with a disability or a dependent:

      • because their day program or care facility is closed or operates under an alternative schedule for reasons related to COVID-19;

      • who cannot attend their day program or care facility under the advice of a medical professional due to being at high risk if they contract COVID-19; or

      • because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic;

  • not be in receipt of paid leave from an employer in respect of the same week; and

  • not be in receipt of the CERB, the EI Emergency Response Benefit (ERB), the Canada Recovery Benefit, the Canada Recovery Sickness Benefit, short-term disability benefits, workers’ compensation benefits, or any EI benefits or Quebec Parental Insurance Plan (QPIP) benefits in respect of the same week.

Workers would apply after the period in which they are seeking income support and attest that they meet the requirements. Two members residing in the same household could not be in receipt of the benefit for the same period. The benefit is taxable.