COVID-19 – Canadian Tax and Business News, release #36
Our COVID-19 Canadian Tax and Business News updates are our way of informing our clients, friends and business associates with recent information that may help businesses and individuals while coping with the outcomes from the COVID-19 pandemic.
Our goal is to monitor the news and release relevant information as it becomes available.
The summary below is based on our understanding and interpretation of the announcements made by the government. The information below is in summary form and subject to change until the proposals are passed as legislation. Contact one of our professionals to discuss these matters in the context of your situation before acting upon such information.
Program Extension
On July 31, 2021, Finance announced it would extend the Canada Emergency Wage Subsidy (CEWS), Canada Emergency Rent Subsidy (CERS) and lockdown support programs until October 23, 2021. Finance is also increasing the wage and rent subsidy rates between August 29 and September 25, 2021.
The maximum rate for the wage and rent subsidies would be set at 40% in Period 20 (August 29 to September 25) instead of being reduced to 20%, as announced in Budget 2021. The maximum rate for Period 21 (September 26 to October 23) will be set at 20%. The Lockdown Support would also be extended until October 23, 2021, at its set rate of 25%.
Employers can still choose to apply for the Canada Recovery Hiring Program instead of the wage subsidy if it provides a better result. More details on the CRHP can be found in our previous publications Wage and Rent Subsidy Update Periods 17-22 and 2021 Federal Budget Commentary.
Subsidy Rates – CEWS
| Period 19: Aug 1 – Aug 28 | Period 20: Aug 29 – Sep 25 | Period 21: Sep 26 – Oct 23 | |
| Max weekly benefit per employee | $452 | $452 | $226 |
| Revenue decline 70% or greater | Base 25% Top-up 15% | Base 25% Top-up 15% | Base 10% Top-up 10% |
| Revenue decline from 50% to 69% | Base 25% Top-up 0.75 x the revenue decline in excess of 50% | Base 25% Top-up 0.75 x the revenue decline in excess of 50% | Base 10% Top-up 0.5 x the revenue decline in excess of 50% |
| Revenue decline from 10% to 49% | Base 0.625 x the revenue decline in excess of 10% Top-up None | Base 0.625 x the revenue decline in excess of 10% Top-up None | Base 0.25 x the revenue decline in excess of 10% Top-up None |
Subsidy Rates – CERS
| Period 19: Aug 1 – Aug 28 | Period 20: Aug 29 – Sep 25 | Period 21: Sep 26 – Oct 23 | |
| Revenue decline 70% or greater | 40% | 40% | 20% |
| Revenue decline from 50% to 69% | 25% plus 0.75 x the revenue decline in excess of 50% | 25% plus 0.75 x the revenue decline in excess of 50% | 10% plus 0.5 x the revenue decline in excess of 50% |
| Revenue decline from 10% to 49% | Base 0.625 x the revenue decline in excess of 10% | Base 0.625 x the revenue decline in excess of 10% | Base 0.25 x the revenue decline in excess of 10% |
Revenue Decline Calculation
Finance also announced a change to the calculation of the revenue decline that addresses a technical issue for businesses that commenced after March 1, 2019. Finance proposed to allow eligible businesses to elect to use the alternative approach to calculate revenue declines for periods 14 to 17 (March 14 to July 3, 2021) if it was not carrying on a business or otherwise carrying on ordinary activities on March 1, 2019. This proposal will help align the rules for periods 14 to 17 with those for periods 1 to 4 for impacted businesses that started after March 1, 2019.
Other Benefit Extensions
Financed also announced the following extensions:
- Extending the Canada Recovery Benefit (CRB), the Canada Recovery Caregiving Benefit (CRCB), and the Canada Recovery Sickness Benefit (CRSB) until October 23, 2021.
- Increasing the maximum number of weeks available for the CRB, by an additional 4 weeks, to a total of 54 weeks, at a rate of $300 per week, and ensuring it is available to those who have exhausted their employment insurance (EI) benefits.
Resources
Government Announcement – Program Extensions
Finance Backgrounder – Extending Business Support Measures Through the Pandemic
As we all try to stay safe, we need to remind ourselves business will get back to normal but in the meantime let’s all do our part to get to normal as soon as we can. If you have any questions or require further information, don’t hesitate to reach out to us.
Get in touch by email: info@fazzaripartners.com or phone: 905.738.5758
