Covid19 – Debt Crisis – Help Available.

April 23, 2020 11:52 pm Published by Leave your thoughts

Debt Crisis? Yes, maybe, but there is Help Available

Over he past few weeks we have helped many people and business deal with the pending debt crisis.  At this point our best suggestions are to become familiar with the help available to help avoid your own future debt crisis.  Do what you can to find apply for the federal and provincial programs and stay safe and healthy.

We have a further update to the programs put in place by the federal government to ease the economic and social effects of the COVID-19 pandemic.  Even if you are currently personally bankrupt or in a consumer proposal, you and your business would still be eligible for government assistance for the Covid19 debt crisis.

We will help keep you advised as more information becomes available.

Covid19 – Help Available Federal Assistance for Individuals to Avoid a Debt Crisis

Canada Emergency Response Benefit (CERB)

Canada Emergency Responsive Benefit (CERB) has now Expanded the program to allow some employment/self-employment income – so you can earn a bit of income but still qualify for the subsidy to avoid a debt crisis.

To Start :

In your first claim, you cannot have earned more than $1,000 in employment and/or self-employment income for 14 or more consecutive days within the four-week benefit period of your claim.

Second Claim:
When submitting subsequent claims, you cannot have earned more than $1,000 in employment and/or self-employment income for the entire four-week benefit period of your new claim.

What will CERB provide you?

  • This program, CERB pays up to $2,000 per month (i.e., $500 per week) to qualified workers for up to 16 weeks.
  • The program is currently set to run from March 15 to October 3, 2020. Individuals can apply for the CERB benefit
  • To qualify, a worker must have had income of at least $5,000 (through salary or non-eligible dividends) in the 12 months prior to the date of application.
  • Individuals who submit a claim must not have earned more than $1,000 of income from employment or self-employment for 14 or more consecutive days in the first four-week benefit period in which they submit their claim. The individual must not have earned $1,000 or more within the entire four-week benefit periods that they submit subsequent claims for. This is a recent change to the program.
  • Seasonal workers and workers who have recently exhausted their EI regular benefits and who cannot find work due to COVID-19 can also qualify. This was another recent change.
  • Those wishing to continue to receive the CERB after the first month must re-apply each month. Any employee that is rehired by their employer who is claiming the CEWS for that employee will likely have to repay the CERB if pertains to the same four-week period.

Government Assistance for Individuals

GST credit

  • An additional one-time payment of $400 for single individuals and $600 for couples beginning in April.

BC Provincial Rent Assistance

As part of the province’s $5 billion action plan to avoid a debt crisis for individuals, the BC Temporary Rental Supplement Program gives tenants and landlords temporary support towards rent payments for renters impacted by COVID-19. Payments are made directly to the landlords of eligible households.

This new program will provide a temporary rental supplement for April, May and June 2020. It will cover part of the rent for low- and moderate-income renters who have lost income as a result of COVID-19. Applicants will only have to apply once. If they apply in April, they will get payments for all three month. If they apply in May, they will get payments for the two remaining months. It is expected that the first payments will be provided before the end of April.

The program gives $300 per month for eligible households with no dependents, and $500 per month for eligible households with dependents.

Canada Child Benefit

  • An additional one-time payment of $300 per child to be paid in early May.

Student loans

  • Repayment requirements will cease until September 30, 2020, interest-free.


  • Minimum withdrawals required for registered retirement income funds (RRIFs) will be reduced by 25 percent for 2020.
  • Old Age Security and Guaranteed Income Supplement payments will continue on a regular basis.

Collection Actions – CRA

  • CRA audit activities will be suspended temporarily for the majority of businesses.
  • CRA will not commence new audits as of March 27, 2020, with limited exceptions.

Assistance for Businesses

Canada Emergency Wage Subsidy (CEWS)

  • This CEWS is a subsidy which includes up to 75 percent of eligible payroll costs on the first $58,700 per employee, maxing out at $847 per week.

You can apply here for the CEWS after April 27 2020

  • Businesses of all sizes, can apply (including individuals, partnerships and corporations, as well as non-profit organizations and charities).
  • The subsidy is available from March 15, 2020 to June 6, 2020.
  • Special rules apply to calculate the subsidy for non-arm’s length employees (e.g. owner/managers).
  • The rules offer flexibility in determining revenues, with special rules for organizations earning revenues from non-arm’s length sources. Employers will have options on how to best calculate revenues and how to determine the percentage decrease in revenue to qualify for the subsidy.
  • Eligibility is based on a decline in revenues from 2019 of at least 15 percent for the month of March and 30 percent for April and May.
  • As a further incentive to re-hire employees, the government will offer an additional refund of 100 percent of employer EI and CPP premiums for each week that an employee is on leave with pay.
  • A business can claim this subsidy with respect to an employee who has not been without pay for 14 or more days during the qualifying period. Timing will need to be considered when re-hiring employees.
  • Employees who were eligible for the Canada Emergency Response Benefit (CERB) may need to repay any benefit received under that program if they are re-hired and the CEWS is subsequently received.
  • Canada Emergency Wage Subsidy (CEWS) – when can you apply?
  • * Applications are not open yet.
  • * Application will be through My CRA business account or a specialized CRA portal.
  • * One news outlet has reported that the applications will start April 27th, but there is no confirmation yet from CRA.

Temporary Wage Subsidy

  • The Temporary Wage Subsidy is available to employers that had a business limit in the prior year. Canadian-controlled private corporations (CCPC) that claimed the small business deduction would generally have a business limit; however, other CCPCs may also qualify.
  • It will allow an eligible employer to reduce its payroll income tax remittances by 10 percent for up to three months, up to a maximum of $1,375 per employee.
  • This is an automatic calculation when your are completing your payroll remittances
  • The maximum aggregate amount an employer can save is $25,000 (and associated corporations are not required to share this maximum employer limit).
  • There is no application required to access the subsidy. The employer would calculate the amount of the subsidy and reduce the amount of income tax remittances (both the employer and employee portions of CPP and EI are still required to be remitted).
  • The Temporary Wage Subsidy and the CEWS are separate programs, so an employer that was eligible for both programs could access both, but any amount received under the temporary wage subsidy would reduce the amount able to be obtained through the CEWS for the same period.

Canada Emergency Business Account (CEBA)

Canada Emergency Business Account (CEBA) – Qualifications for this program has now expanded –  New qualifications indicate that the qualifying business/organization will need to demonstrate they paid between $20,000 to $1.5 Million in total payroll in 2019.  The previously qualification level was between $50,000 to $1 Million.

What is CEBA?

  • The CEBA consists of a $40,000 interest-free loan that will be available to small businesses and non-profit organizations, as evidenced by its 2019 T4 Summary page
  • See the Federal Government Link
  • If repaid by December 31, 2022, 25 percent of the loan will be forgivable, up to $10,000.
  • Structured as a revolving line of credit until December 31, 2020, any remaining balance on the line of credit after this date will be converted to a non-revolving five-year term loan, maturing on December 31, 2025.
  • The organization must have a business banking account at the financial institution at which it is applying, which must be its primary financial institution.
  • Online applications are now open, and the major banks are indicating that this application should be completed online, – in person applications do not appear to be available
  • Smaller financial institutions, such as credit unions, may have a different process.
  • Once approved, it is estimated that the funds will be received within five business days.

Canada Emergency Commercial Rent Assistance (CECRA) for small Business

The Canada Emergency Rent Assistance Program is the first major, Canada-wide initiative to support small businesses with this giant expense as we head into a second month of a virtual shut-down of the small business economy. Provincial governments now need to offer additional financial support and ensure that commercial tenants won’t be evicted due to COVID-19.

No formal details yet –  the intent is to provide loans (including forgivable loans) to commercial property owners who will lower or forgo the rent of small businesses for the months of April, May and June.

  • The federal government intends on introducing this program to provide rent relief for small businesses.
  • It will provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), May, and June.
  • The program will require a partnership between the federal government and provincial and territorial governments, which are responsible for property owner-tenant relationships. Additional details should be available soon.

Temporary wage boost for essential workers

  • Low-income essential workers who earn less than $2,500 per month will receive a top-up.
  • This will apply to workers such as auxiliary nurses, elderly-care workers, grocery store and food supply workers, workers in essential retail services and others.
  • The federal government will work closely with the provinces and territories to cost-share the temporary top-up.
  • Additional details will be provided.
  • CRA has suspended collection activities on new debts and will allow for flexible payment arrangements.
  • Deadlines for objections due March 18, 2020 or later have been extended to June 30, 2020.


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