Feigenbaum Law

Federal Government Updates CERB and CEWS Programs

Corporate Tax Planning
Personal Tax Planning
June 26, 2020

The Canada Revenue Agency is continuing to update information related to the Canada Emergency Wage Subsidy (CEWS) as well as other benefits related to COVID-19  as the pandemic continues to impact the Canadian economy. In today’s blog, we would like to update our readers on some of the news.

Changes to the Canada Emergency Wage Subsidy 

The Canada Emergency Wage Subsidy was introduced to help employers re-hire workers who were laid off as a result of COVID-19 by having the government fund part of employee wages. It was originally put in place for a 12-week period, which had been set to end on June 6, 2020.

Shortly before the planned end-date, Finance Minister Bill Morneau announced the CEW would be extended an additional 12 weeks, taking it through to August 29, 2020. We may see further extensions of the CEWS, and will be sure to update readers if one occurs.

Another interesting update to CEWS is that while it was previously only available to Indigenous government-owned corporations that are taxable, the proposed changes expand availability to include Indigenous government-owned corporations that are tax-exempt under paragraph 149(1)(d.5) of the Income Tax Act. This change is retroactive to April 11, 2020. Other groups that are now available include Registered Amateur Athletic Associations registered at the national level, as well as registered journalism organizations, and private colleges and schools, including driving schools, art schools and culinary schools.

Extension for the Canada Emergency Response Benefit

Similarly, the government also announced an extension to the Canada Emergency Response Benefit (CERB). The benefit of $2,000 per month was available for an initial 16-week period for people who had lost income due to COVID-19. The extension period is for eight-weeks, which means people who started to receive CERB payments in mid-March can expect them to continue until Mid-September. The program is currently set to conclude on October 3 for all recipients regardless of when they began to receive benefits. The maximum total amount a qualifying individual can collect has increased from $8,000 to $12,000.

Additional changes to CERB have been made to assist others as well. Individuals who suffered a short-term loss of employment to care for themselves of someone else diagnosed with COVID-19 can now make a claim for benefits for just two weeks instead of a four-week period, where they may have previously ineligible. Additionally, it was announced that people who have been requested to return to work or failed to resume self-employment when they could have are no longer eligible for CERB payments.

A recent article by the CBC indicated that some CERB recipients had received smaller payments than they had previously been getting, along with a notice that they did not qualify for payment for the period of June 15-28. A spokesperson for the Employment Minister has said that this is owing to an initial double payment sent out to many applicants through the EI stream when the program first began. Recipients are paid differently depending on the stream through which they applied. EI applicants receive $1,000 biweekly, while CERB applicants receive $2,000 on a monthly basis. Apparently, many EI applicants were paid $2,000 as their initial payment, which is being cited as the reason for the reduced payment in June.

Contact Feigenbaum Law if you are looking for a custom solution to your personal tax planning needs. Our lawyers and financial professionals have unparalleled knowledge of tax law both in the United States and Canada. We understand that every tax situation brings with it unique challenges. Our experience makes us uniquely qualified to address these challenges. We offer services to clients in the US, Canada and around the world. Contact us to learn more about how we can help or call us at (905) 695-1269 or toll-free at (877) 275-4792

Tagged: CERB, CEWS