Temporary Wage Subsidy
CRA has produced a temporary wage subsidy on income taxes withheld on payroll not CPP and EI. The subsidy can only be used by Canadian Controlled Private Corporations. This is only for existing payroll account not new accounts set up. CRA is applying a subsidy for wages paid to employees between March 18, 2020 and June 20, 2020.
Canada Emergency Wage Subsidy
The federal government has announced a wage subsidy to cover 75% of salaries for businesses that qualify for up to 3 months. The subsidy is retroactive to March 15, 2020. The purpose of the wage subsidy program is to help employers that have been hurt by the Covid-19 pandemic and that there is an incentive to keep workers employed.
The PDF file lists the different programs available under the COVID-19 Economic Response Plan.
Canada Emergency Wage Subsidy (CEWS)
The government has been changing the rules constantly in respect to the wage subsidy. In my example below, total wages are $41,170.33 and the government will provide a subsidy of $30,692.31. Therefore, the total net wages for the month is $10,478.02. And so, the company will be out of pocket on source deductions until the subsidy is paid into your account. If you have ‘My Business Account’ with CRA, you can set this up with direct deposit. CRA has developed their own online calculator. Unfortunately, they have made it very complicated.
Canada Emergency Commercial Rent Assistance – CECRA
The Canadian government reached an agreement to implement the Canada Emergency Commercial Rent Assistance (CERCA) with the provinces. This program will lower rent by 75% for small business that have been affected by COVID-19. The Ontario government program is referred to as Ontario-Canada Emergency Commercial Rent Assistance program (OCECRA). Not-for-profit and charitable entities would also qualify for the program. At this time the Ontario government has provided more information than the federal government.