COVID-19 Financial Assistance Programs In Canada (Individuals and Small Business Owners)

Are you looking for the COVID-19 Financial Assistance Programs In Canada? If yes then you are at the right place and time. The COVID-19 pandemic has been a severe health hazard to nations all over the world, causing considerable disruption to everyday life. A major impact of the disease is its effect on global economies and countries all over the world, Canada included.

It is expected that the pandemic will have a negative impact on every sector of the Canadian economy with the energy, service industries, travel and hospitality industry taking the brunt of the hit.

In the quest to contain the spread of the virus, states of emergency and social distancing measures were put in place. While these actions are necessary, they contribute immensely to the decline in economic activities. However, governments around the world have taken action to restrict the spread of the virus while also helping individuals and businesses through this tough time.

In Canada, small and medium-sized businesses are the building blocks of the economy. Armed with this knowledge, immediate and effective actions have been taken by the Canadian governments to support individuals and businesses facing difficulty during this pandemic. An announcement made by the government on March 18, 2020, stated that a new set of economic regulations are being put in place to help balance the economy.

As a means to stabilize the economy, the Canadian government established the COVID-19 Economic Response Plan. This will make available up to $27 billion in aid to Canadian employees and businesses.

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COVID-19 Financial Assistance Programs In Canada

Canada’s COVID-19 Economic Response Plan offers financial assistance primarily in two categories:

1. Financial Support for Canadian Citizens

Government assistance towards its citizens comes in various ways, putting different categories into consideration. These supports include

Financial Support for Workers (Temporary Income)

For Canadians who are quarantined, forced to stay home to cater to kids or sick (without paid sick leave), the authority is:

  • Relinquishing the one-week waiting duration for individuals in quarantine that claim Employment Insurance (EI) sickness benefits. This provisional regulation is in action as of March 15, 2020

  • Relinquishing the prerequisite to give a medical certificate before accessing the EI sickness benefits

  • Initiating the Canada Emergency Response Benefit (CERB) which provides up to $1000 on a bi-weekly basis, for a duration of 3 months

The Canada Revenue Agency (CRA) would be in charge of payment and disbursement of these payment benefits, providing income support to:

  • Workers and the self-employed, who are in quarantine being ill with COVID-19 but unqualified for the EI sickness benefits

  • Workers and the self-employed, who are taking care of loved ones infected with COVID-19, such as an elderly parent, spouse or kids and ineligible for EI sickness benefits

  • Parents with children who are compelled to care or supervise their kids due to closures of school or daycare. As a result, they are unable to earn an income, whether or not they are qualified for EI

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Who Will Qualify For The COVID-19 Financial Assistance Programs?

Canadians who got laid off, quarantined, ill or taking care of loved ones infected with COVID-19. Also, working parents who have to stay home without a paycheck to look after their kids because of closures of schools and daycares.
It also applies to those who are still employed but no longer earning pay due to the COVID-19 pandemic.

To qualify for this Benefit, applicants must have made a total of $5,000 in employment income, maternity leave benefits or self-employment income for 2019 or in the 12-month duration preceding the day they make the application.

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How To Apply For The COVID-19 Financial Assistance Programs?

The Benefit will be open for application to all Canadians by April 2020. All eligibility requirements are expected to be met by Canadians before application. However, the need to re-attest every two weeks is mandatory to reconfirm eligibility.

Three channels will be made available to Canadians to select from to apply for the Benefit

1. Access will be made available on the CRA MyAccount secure port

2. Access to the benefit will be made available on the secure My Service Canada Account

3. Also, putting a call to a toll-free number fitted with a computerized application process.

2. Financial Support for Canadian Workers (Long-Term Income)

For Canadians who lost their employment or had a reduction in working hours due to COVID’s impact, the Government is:

  • Initiating an Emergency Support Benefit by authorizing the CRA to make a provision of up to $5.0 billion in aid to workers. This Benefit extends to workers who are unqualified for Employment Insurance (EI) or those facing unemployment

  • Initiating the EI Work Sharing Program. This program enables workers to earn EI benefits However, workers who are interested are required to reduce their regular working hours.

  • To ease workers qualifying for these agreements, a 75 weeks extension is being given, to ease qualification prerequisites, and simplify the application process. An announcement towards this development was made by the Prime Minister on March 11, 2020

3. Support For Individuals (Income To Those Who Need It The Most)

In Canada, there are over 11 million families who earn a low and modest income. These families may need extra assistance with their finances. The Canadian government is proposing a one-time unique payment for these families with payment being made latest by early May 2020. The Goods and Services Tax credit (GSTC) will be overseeing all payments to these families.

There will be an average increase in income for citizens benefiting from this intervention. Individuals and couples will earn an average of $400 and $600 respectively. A total of $5.5 billion is said to be pumped into the economy through this regulation.

With over 2.5 million families with children, there’s no doubt these families will also need extra financial support. To tackle this, the maximum annual Canada Child Benefit (CCB) payment will be increased. An increment of up to $300 per child will be made available. However, this is only for the 2019/20 benefit year.

For each family collecting CCB, an increment of approximately $500 is to be expected. As part of the May payment, these families will be receiving an additional $300 per child. In total, this model will provide almost $2 billion in additional aid.

Improvement of the GSTC and CCB will see a low to modest income single parent with two children accumulate an average of $1,500 in additional support.

To make sure that vulnerable groups who need support the most get the required assistance, targeted help is being recommended by the Canadian government. This will be achieved by:

  • Allotting the sum of $300 million for the Indigenous Community Support Fund to deal with major demands in Inuit, First Nations, and Métis Nation communities.

  • Decreasing the basic minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25 percent for the year 2020. This is done to curb the impact of volatile market situations on several seniors’ retirement savings. This offers flexibility to seniors with the concern that liquidation of their RRIF assets will be required to meet minimum withdrawal requirements.

  • Parallel rules would pertain to individuals who receive flexible benefit expenditures under a Registered Pension Plan.

  • Giving the Reaching Home initiative with $157 million to proceed with supporting people without homes during this COVID-19 outbreak. The funding could be used for a spectrum of needs such as procuring consumables, buying of beds and physical barriers for social distancing and also getting lodgings to reduce overpopulation in shelter homes.

  • Providing up to $50.5 million to various women’s shelters and sexual assault centres to protect women and children fleeing violence. This fund is to aid with their ability to regulate or curb an outbreak in their establishments.

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COVID-19 Financial Assistance Programs for Taxpayers

The Canada Revenue Agency has come to the conclusion to postpone the filing due date for the 2019 tax returns of individuals and specific trusts. This is to give an incredible adjustment to Canadians encountering difficulties during the COVID-19 outbreak.

The due date for return filing for individuals will be held off until June 1, 2020. However, the CRA implores individuals who are expecting to obtain benefits under the GSTC or the Canada Child Benefit to file their taxes before the new set due date to make sure their entitlements for the 2020/21 benefit year are appropriately deduced.

  • For trusts who have a taxation year ending on December 31, 2019, the due date for return filing will be postponed until May 1, 2020

  • The Canada Revenue Agency will enable all taxpayers to postpone any payment of any income tax amounts that citizens owe starting from today and before September 2020. The grace of deferment will be until after August 31, 2020. This assistance would pertain to tax balances due, including installments, under Part I of the Income Tax Act

  • No dividend or sanctions will amass on these amounts during this duration

CRA and COVID-19 Financial Assistance Programs

Further to this, the Canada Revenue Agency will recognize electronic signatures to reduce the burden on taxpayers and tax preparers. In addition, accepting electronic signatures will reduce administrative burden and workload.

The Canada Revenue Agency is only recognizing electronic signatures as a temporary administrative measure. This requirement pertains to authorization forms T183 or T183CORP. Both forms are signed in person by a majority of Canadians every year to approve tax preparers to file their taxes.

During this COVID-19 pandemic, the Canada Revenue Agency is adjusting itself to assist individuals. Through its Outreach Program, individuals are offered help to enhance understanding of tax obligations and various ways to receive benefits and credits to which they are qualified for.
This service is now accessible over the phone, and through webinars rather than the traditional in-person meet up.

It is expected of many community groups to consider reducing or cancelling the provision of services rendered under the Community Volunteer Income Tax Program. However, extra efforts to motivate individuals to document their tax and benefit returns electronically, or where feasible, through the File My Return service, will be put forth.

COVID-19 Financial Assistance Programs By The Big 5 Banks

The Minister of Finance has charged the heads of Canada’s large banks, to show more flexibility in assisting their clients. With personal and business finances being affected by COVID-19, banks also have a role to play in assisting individuals.

The Superintendent of Financial Institutions gave a clear possibility of banks using the extra lending power rendered by current government actions to assist low and medium-income businesses and households.

Furthermore, banks in Canada have acknowledged their dedication to work with customers to provide flexible solutions to circumstances that might have developed during this COVID-19 pandemic. Such circumstances include illness, pay disruption or childcare disruption.

Also, large banks in Canada have put in place a 6-month payment postponement for mortgages, and the chance for assistance on other credit products. These deliberate criteria address unexpected challenges being faced all over the country, helping to stabilize the Canadian economy.

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Mortgage Default Management Tools – COVID-19 Financial Assistance Programs

Homeowners who may be encountering financial trouble are being assisted by the Canada Mortgage and Housing Corporation (CMHC). In addition, other mortgage insurers offer various tools to lenders that can assist them during this difficult time. Some of this assistance include postponement of payment, capitalization of unpaid interest arrears, loan re-amortization and other qualified expenditures, and special payment treaties.

The Canadian Government, with the help of CMHC, makes available increased adaptability for homeowners in financial troubles. Deferment of CMHC-insured mortgage loans is also granted with CMHC authorizing lenders to enable payment postponement to begin instantly.

The Prince Edward Island COVID-19 Income Support Fund

This is a special temporary program developed to give financial aid to citizens of Prince Edward Island

This support fund is being introduced to help individuals who have lost their jobs or been laid-off, people who no longer have a primary source of income, those with an expired Employment Insurance (EI) benefits and self-employed individuals with no proceeds due to COVID-19.

This Income Support Fund is a one-time payment of $750 from the government of Prince Edward Island to its residents. However, this is a taxable income.

How To Qualify For The Prince Edward Island COVID-19 Income Support Fund?

To qualify for the Prince Edward Island COVID-19 Income Support Fund, individuals;

  • you have lost your job or have been laid off from March 13th of 2020 as a result of the public health state of emergency in Prince Edward Island

  • your Employment Insurance (EI) benefits are expired and with no employment to go back to as a result of the public health state of emergency in Prince Edward Island

  • who are self-employed with no source of income, who have lost all through self-employment from March 13th of 2020 as a result of the public health state of emergency in Prince Edward Island

  • Individuals should not apply for the Emergency Income Relief for the Self-Employed otherwise he/she is not qualified

  • who are looking for aid through either the Employment Insurance (EI) benefits or the Canada Emergency Response Benefit (CERB) from the Federal Government

If you meet the above requirements, you are also expected to;

  • Have earned at least $5,000 in gross income in the last year

  • Be an adult that is 18 years of age or older

  • Be a citizen of Prince Edward Island for tax purposes from December 31th of 2019

How Much Will You Receive As Part Of The Prince Edward Island COVID-19 Income Support Fund?

Qualified individuals who meet the program requirements will earn a one-time payment of $750 starting from March 13th of 2020 – to April 30th of 2020

It’s is important to note that:

  • The income earned is taxable

  • Eligible persons can only apply once

  • Eligible individuals must safely keep documents verifying their eligibility for the program for a duration of three years. This procedure is required for audit and adherence purposes.

How To Apply For The Prince Edward Island COVID-19 Income Support Fund?

To apply for The Prince Edward Island COVID-19 Income Support Fund, all online application form must be completed and submitted by the individual.

To assess the one-time payment of $750, we will need:

  • The finalized online application form for the PEI COVID-19 Income Support Fund

  • Social Insurance Number (SIN)

  • Banking Information

  • Void cheque (with file size exactly or lesser than 400KB

  • Financial institutional number,

  • Branch transit number

  • Account number

  • Employment information

It is important to note that it may take up to 5 working days for approved applications to get a receipt of payment.

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Application Deadline For The The Prince Edward Island COVID-19 Income Support Fund

All online applications must be accepted on or before April 30th of 2020.

1. Support for Small Business Owners

As the COVID-19 outbreak continues, situations surrounding employers and their businesses become more challenging. The existing circumstances put a strain on supply chains and cashflow. In response to this, the Canadian Government is carrying out quick, vital and emphatic action to aid Canadian businesses in encountering financial troubles. To contribute rapid relief for entrepreneurs and businesses, the Government has:

Initiated the current Canada Emergency Response Benefit (CERB). Small businesses and entrepreneurs who are not on any payroll as a result of COVID-19 can also apply for the CERB seeing them earn $2,000 a month for a duration of four months. Canadians would start to earn their CERB payments within 1 week of application. Payments would be made available by the CERB from March 15, 2020, until October 3, 2020.

Improved the Work-Sharing program to assist employers and their employees who are encountering a downward slope in business.
The Canadian Government came up with Work-Sharing (WS) regulations for the steel and aluminum sector and also the forestry sector. The WS will support employers who are implicated by the downturn in business due to the pandemic.

These regulations prolong the period of Work-Sharing pacts by an extra 38 weeks, for a full 76 weeks. The compulsory waiting interval has also been relinquished to allow employers with just expired agreement to instantly apply for a new agreement.

2. Forestry Sector

Provisional special regulations are effective from July 30, 2017, to March 28, 2020.

Who Qualifies?

You qualify to apply if your business has been directly or indirectly impacted by the downward slope in the forestry sector and if you:

  • If you had a WS contract that expired between October 30th of 2016 and July 29th of 2017

  • Have a WS contract that needed to be approved between July 30th of 2017 and March 28th of 2020 (with a contract start date latest than March 29th of 2020), or

  • Have a WS contract that will commence or expire between July 30th of 2017 and March 28th of 2020

3. Steel and Aluminum Sector Employees

Provisional special regulations are effective from August 19, 2018, to March 27, 2021.

Who Will Qualify For WS Contract Employees?

You are qualified to apply if your business has been impacted directly or indirectly by the downward slope in the steel and aluminum sector and if you:

  • Had a WS contract that expired between November 25 of 2017 and August 18 of 2018

  • Have a WS contract that needed to be approved between August 19th of 2018 and March 27th of 2021 (with a contract start date latest March 28, 2021), or

  • Have a WS contract that will commence or expire between August 19th of 2018 and March 27th of 2021

Application Steps For WS Contract Employees

It is important you consult the WS Applicant guide for the provisional special regulations. This will provide more information on how to finalize your application process.

Furthermore, If you are looking to sign a new contract or had a WS contract that has expired:

between October 30th of 2016, and July 29, 2017 (forestry sector) or
between November 25th of 2018 and August 18th of 2018 (steel and aluminum sector)

You are required by law to provide the following documents:

  • EMP 5100 – Application for a Work-Sharing agreement

  • EMP 5101 – Attachment A: Work-Sharing unit attachment

Employers are authorized to provide their finalized applications employing the method below:

1. Atlantic Provinces

Your application should be sent to this email: [email protected]

2. Quebec Region

Your application should be sent to this email: [email protected]

3. Ontario Province

Your application should be sent to this email: [email protected]

4. Western Canada and Territories

Your application should be submitted to this email: [email protected]

Pulled in a 3-months wage subsidy reaching a peak of $1,370 per worker and $25,000 per employer. This subsidy will enable qualified employers to lower the percentage of payroll deductions expected to be submitted to the Canada Revenue Agency (CRA).

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Who Qualifies For The CCPC COVID-19 Financial Assistance Programs?

As an employer of labour, you are qualified to receive this benefit if you:

  • Are a registered charity organization, a Canadian-controlled private corporation (CCPC) or a non-profit organization

  • Possess a standing business number and a payroll program account with the CRA as of March 18, 2020

  • Pay salary, wages, compensations, or other allowances to a worker

Note that qualification for CCPCs subsidy will be based on the taxable capital operation for the previous taxation year not exceeding $15 million.

  • The wage subsidy will equate to 10% of the revenue you pay between March 18th of 2020 and June 20th of 2020.

  • The expected benefit to be paid should reach a maximum payment of $1,375 for each employee and $25,000 for each employer. Although, CCPCs will not be given the opportunity to earn the maximum wage subsidy of $25,000 for each employer

  • Joined hands with the financial sector to secure an extra $300 billion in lending capacity for low and medium-income businesses across the country

  • Established the current Business Credit Availability Program (BCAP) to make available more than $10 billion. This fund will aid Canadian businesses to obtain financing and credit during this time of uncertainty

  • All sectors in all regions will have access to fundings with the assistance of the BCAP

A total of $65 billion in direct lending will be made available by the government through the Export Development Canada (EDC) and the Business Development Bank of Canada (BDC). Furthermore, different kinds of financial aid at market rates will be made available to businesses with attainable models without access to financing.

The government working in close partnership with financial institutions will see the program close voids in market access.

Who Qualifies For BCAP COVID-19 Financial Assistance Programs?

All credit-worthy businesses with feasible business models whose plan of work is in line with the mandate of either BDC and/or EDC are qualified to benefit from BCAP

Application Process For BCAP Benefit Program 

To apply for the BCAP benefit, all interested and qualified businesses must first contact their financial institution. The financial institution will make contact with BDC and/or EDC where relevant.

When will BCAP Financial Assistance be accessible?

BCAP is currently accessible. All qualified businesses should reach their financial institution to get more information about the program.

Brought about an extra $5 billion accessible to agribusinesses, farmers, food processors, and producers by employing Farm Credit Canada. Also, farmers are given more flexibility in reimbursing unpaid Advance Payments Program loans.

  • Qualified farmers who still have an unpaid Advance Payments Program (APP) loan payable on or before April 30th of 2020, will be given a Stay of Default. This will allow farmers to have an extra six months to pay back the loan

  • The current due dates for unpaid Advance Payments Program loans are:

    September 30th of 2020: 2018 cash prepayment for oilseeds, pulses, and flowers

    September 30th of 2020: 2018 cash prepayment for bison and cattle

    October 31st of 2020: 2019 cash prepayment on potted plants and flowers

Also, qualified farmers who still have unpaid interest-free loans will have the chance to earn an additional $100,000 interest-free percentage for the year 2020-2021. This will only be possible if the farmer’s total APP prepayment remains below the $1 million caps.

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Flexibility For Businesses Filing Taxes – COVID-19 Financial Assistance Programs In Canada

As part of the COVID-19 Financial Assistance Programs, all businesses will now be permitted to defer tax payments. A new due date has been announced by the Canada Revenue Agency to be after August 31st of 2020.

This deferment will only be applicable to the payment of any income tax rates that are owed starting from today and before September 2020.

Following Part I of the Income Tax Act, this assistance will only be applied to unpaid tax balances and also installments. Businesses will not face any sanctions during this period. Also, no interest will grow on these payments during this interval.

The Canada Revenue Agency is temporarily suspending audit interaction with taxpayers and delegates for most businesses. This implies that no communication will be made to any small or medium-income businesses to make any Income Tax audits for the next 1 month.

The Liaison Officer will help owners of small businesses comprehend their tax obligations and show them ways to solve them. Small businesses are also offered help to enhance understanding of changes in filing, payment deadlines and are shown various ways to receive benefits and credits to which they are qualified for. This service is now accessible electronically over the phone and through webinars rather than the traditional in-person meetup.

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Support for Financial Market Liquidity – COVID-19 Financial Assistance Programs In Canada

In a bid to strengthen the Canadian financial system and its economy, the Insured Mortgage Purchase Program (IMPP) was established by the government. With this program in place, roughly $50 billion of insured mortgage trusts will be purchased by the government through the Canada Mortgage and Housing Corporation (CMHC).

This effort will give a long-term regular allotment to mortgage lenders and banks. It will also help encourage continuous lending to individuals and Canadian businesses.
Details on how to apply, eligibility and terms and conditions will be delivered to businesses by CMHC at the end of the week.

Furthermore, to help businesses in this time of uncertainty, the Bank of Canada is ready to modify its market liquidity policies. This is to help maintain cash flow and credit availability.

Similarly, the bank of Canada has pledged to broaden its eligible collateral for term repo- facility. This expansion is to accommodate the full spectrum of eligible collateral under the Standing Liquidity Facility. However, this is with the exclusion of the non-mortgage loan portfolio.

This expansion will make provisions to support the funding for financial institutions by giving a backstop to conventional private funding.

The Bank will also be providing assistance to the Canada Mortgage Bond (CMB) market. This support will come in the form of purchases of CMBs in the secondary market. An undertaking that will benefit market liquidity and price discovery.

Canadian Businesses In International Markets – COVID-19 Financial Assistance Programs In Canada

Canada and the United States are working hand in hand to temporarily inhibit all non-vital travels across the border.

However, essential travels will proceed undisturbed to maintain supply chains between both countries. This is to make sure that necessities like food medicines and fuel get to people that need them in both countries.

Furthermore, experts have been placed in over 150 cities worldwide by the Trade Commissioner Service. These experts will be providing small businesses with specific market insights to help reduce the effects of COVID-19. Also, these experts will be providing information about global markets and findings available to small businesses.

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Conclusion

There you go, in this article, I’ve tried my best to outline the various COVID-19 Financial Assistance Programs In Canada initiated by the Government. I really hope it was informative for one and all.

Please share this article on social media and help spread the word. Also, let me know your questions if any, thoughts and comments below. Thanks for reading and stay safe, please! Bye now.

Useful Resources To Read Further: Regarding the COVID-19 and Financial Assistance Programs: 

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Sagar Sridhar

Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master's degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.

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