Canada’s Economic Response Plan: Definitions & FAQs
In response to the effects of the COVID-19 pandemic, including new health protocols and economic insecurity, the Government of Canada has created the Canada Economic Response Plan to support individuals and businesses. This article will explain the Canada Emergency Response Benefit, Canada Emergency Wage Subsidy, and common questions about eligibility.
Please seek professional advice to navigate funding streams and eligibility.
Canada Emergency Response Benefit (CERB)
- Temporary income support of $500 week up to 16 weeks for employees who have stopped working because of COVID-19
- This benefit is available to workers who are at least 15 years old, reside in Canada, and had at least $5,000 of income in the past 12 months
- This income is taxable so recipients are encouraged to save 20% of payments for future remittance.
- Click HERE for full eligibility guidelines and applications
Canada Emergency Wage Subsidy (CEWS)
- Wage subsidy of 75% for employers to cover employee wages for up to 12 weeks, retroactive from March 15-June 6, 2020
- Wage subsidy allows employers to re-hire workers previously laid off as a result of COVID-19
- Click HERE for eligibility guidelines and applications
Regarding the CERB and Going Back to Work Part-Time
You may be eligible for the CERB if you have stopped working because of COVID-19.
When submitting your first claim, you cannot have earned more than $1,000 in employment and/or self-employment income for a period of at least 14 or more consecutive days within the four-week benefit period of your 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.
Regarding the CEWS and Having Employees Who Are Collecting the CERB
Who is an eligible employee?
An eligible employee, in respect of a week in a claim period, means an individual employed in Canada by the eligible employer in the claim period, as long as the employee has not been without remuneration from the eligible employer in respect of a period of 14 or more consecutive days in the claim period.
Eligible employee status is determined in respect of each week in each claim period, so an employee that is not an eligible employee in a preceding claim period (because, for example, the 14 day remuneration condition has not been met) may become eligible in a following claim period (see example under Q15).
Can an eligible employer claim the wage subsidy in respect of an eligible employee who has received payments under the CERB?
Yes, in certain situations, an eligible employer may be eligible to claim the wage subsidy in respect of an eligible employee who has received payments under the CERB program. However, as explained above (see Q13), where an individual has not been paid any remuneration from the eligible employer in respect of a period of 14 or more consecutive days in a claim period, the individual will not qualify as an eligible employee for that period of employment. Therefore, the eligible employer will not be eligible for the wage subsidy in respect of that employee for that claim period.
The onus is on the eligible employer to ensure that an employee that has not been paid eligible remuneration in respect of 14 or more consecutive days in a claim period, is not included for that claim period. However, it is the employee’s responsibility to determine their eligibility for the CERB for any period.
Where an employee has received a CERB payment from the CRA and it is later determined that they are no longer eligible for the CERB, whether due to the employment or otherwise, the employee may want to return or repay the CERB payment. For more details, please refer to Return or repay on the Apply for CERB web page.
It is important to remember that if you unsure about your specific situation to seek professional advice as there is a lot of complexity to the CEWS legislation.
BDO Canada – Let’s Navigate Government Funding Together
BDO Canada – Cash Flow Strategies & Government Incentives
Government of Canada – Business & Industry Resources
Government of British Columbia – COVID-19 Provincial Support & Information