COVID Benefits Update: Federal Benefits and Proposed New Provincial Support

By Preston I.A.D. Parsons, Kai Ying Chieh and Gurpreet Gill

Federal Program Update and New Benefits

CEWS

Applications for claim period 7 (August 30, 2020 to September 26, 2020) opened September 30, 2020.

In the federal throne speech, the federal government announced that it will be extending the federal wage subsidy program into next summer.

New federal recovery benefits

The federal government's new COVID-19 Response Measures Act received Royal Assent on October 2. This Act creates three new temporary recovery benefits to assist Canadians who are unable to work due to COVID-19 related reasons:

  • A Canada Recovery Benefit (CRB) of $500 per week for up to 26 weeks, to workers who are self-employed or who are not eligible for EI and who still require income support. This benefit is intended for those who have not returned to work due to COVID-19 or those whose income has dropped by at least 50%. It is mainly for those who are self-employed or working in the gig economy. It is available for one year. (This benefit was initially $400 per week, so that it offers the same amount of support as CERB).

    These workers must be available and looking for work, and must accept work where it is reasonable to do so.

    This benefit is available to residents in Canada who:

    • are at least 15 years old and have a valid SIN;
    • have stopped working due to COVID-19 and available and looking for work or who are working but have had reductions in their employment or self-employment income for reasons related to COVID-19;
    • are not eligible for EI;
    • had employment and/or self-employment income of at least $5,000 in 2019 or in 2020; and
    • have not quit their job voluntarily.

    As a means to encourage claimants of this benefit to return to work, they would be able to earn income from employment/self-employment while receiving the CRB, so long as they continue to meet the other requirements.

  • A Canada Recovery Sickness Benefit (CRSB) of $500 per week for up to two weeks, effective September 27, 2020, for workers who are sick or must self-isolate for reasons related to COVID-19. This program is for those who do not have paid sick leave through their employer.

    This benefit will be available to:

    • Residents in Canada who are at least 15 years old and have a SIN;
    • Workers employed or self-employed at the time of the application; and
    • Workers who earned at least $5,000 in 2019 or 2020.

    A medical certificate is not required to qualify for the CRSB. However, workers cannot claim the CRSB and receive other paid sick leave for the same benefit period. Workers would need to have missed a minimum of 50% of their scheduled work in a week to claim this benefit.

  • A Canada Recovery Caregiving Benefit (CRCB) of $500 per week for up to 26 weeks per household, for those unable to work because they must care for a child under the age of 12 or a family member due to school, daycare or care facility closures due to COVID-19 or because the child or family member is sick and/or required to quarantine.

    To be eligible for the CRCB, individuals would need to:

    • Reside in Canada;
    • Be at least 15 years old on the first day of the period for which they are applying for the benefit;
    • Have a valid SIN;
    • Be employed or self-employed on the day immediately preceding the period for which the application is made;
    • Have earned at least $5,000 in 2019 or in 2020; and
    • Have been unable to work for at least 50% of their normally scheduled work within a given week.

Canadians can apply for the CRB, CRSB and CRCB benefits that will be available through the Canada Revenue Agency for up to one year after September 27, 2020. Applications for the CRCB and CRSB benefits were made available as of October 5, 2020. Applications for the CRB will be open October 12, 2020.

The CRA will administer the Canada Recovery Benefits, and Canadians can apply for these benefits through the CRA.

The legislation also included amendments to the Canada Labour Code to ensure that federally regulated employees have access to job-protected leave, so they can receive these benefits also.

Employment Insurance

The government is transitioning to a simpler and more accessible EI benefits program effective September 27, 2020. It provides income support to those who are unable to work and are eligible. These changes will establish a weekly benefit payment of $500 for all EI recipients in line with the CRB. In the transition period, CERB will be extended for an additional four weeks (until October 3, 2020), providing a new maximum of up to 28 weeks of benefits.

To help individuals qualify, EI claimants will be provided a one-time insurable hours credit of:

  • 300 insurable hours for claims for regular benefits due to job loss; and
  • 480 insurable hours for claims for special benefits that include sickness, maternity/paternal, compassionate care or family caregiver.

This hour credit will be retroactive to March 15, 2020 for claimants who were looking to transition early from CERB to EI maternity, parental, compassionate care, family caregiver or work-sharing benefits but could not establish their EI claim due to insufficient hours.

The hour credit will be available for new EI claims for one year.

Those who are currently receiving benefits through Service Canada will be transitioned to the EI program once they have received the maximum CERB benefits they are entitled to. Canadians who are currently receiving CERB form the CRA and believe they are entitled to EI will need to apply through Services Canada after September 26, 2020.

B.C. Increased Employment Incentive

The British Columbia government announced a provincial wage subsidy program on September 17, 2020 as a part of its B.C. Economic Recovery Plan. The B.C. Increased Employment Incentive (BCIEI) is a refundable tax credit similar to the federal Canada Emergency Wage Subsidy program that is intended to provide financial reimbursements to employers who hire and train new employees. The program is hoped to encourage the creation of new jobs or increases in payroll for existing low or medium income employees, and is intended to provide much needed support to eligible businesses who continue hiring employees with the progression of the economic recovery.

Eligibility

All B.C. private sector employers, including most charities and non-profit organizations, who increase their B.C. remuneration by creating new jobs or increasing pay of existing low or medium income employees over the last quarter (October to December) of 2020 are eligible.

Public institutions are not eligible for the tax credit, including:

  • Municipalities
  • Schools, school boards, public universities and colleges
  • Hospitals
  • Health authorities
  • Certain government entities

B.C. Remuneration

The tax credit will be calculated at 15% of the amount by which qualifying B.C. remuneration exceeds base B.C. remuneration.

The government has described the qualifying B.C. remuneration as the total B.C. remuneration paid to eligible employees for the quarter ending December 31, 2020, with a maximum weekly B.C. remuneration for each eligible employee of $1,129.33.

The base B.C. remuneration is the total B.C. remuneration paid to eligible employees for the quarter ending September 30, 2020, with a maximum weekly B.C. remuneration for each eligible employee of $1,129.33. Partial weeks are to be prorated for both the qualifying and base B.C. remuneration.

Eligible Employee

An eligible employee must:

  • be working at a permanent establishment of the employer in B.C. or be paid from a permanent establishment in B.C.; and
  • perform their duties in B.C.

Application Period

Legislation has not been implemented for this benefit, though the current B.C. Government intends eligible employers can apply online starting March 2021. Whether this program is implemented or not may ultimately depend on the outcome of the current B.C. Provincial Election.

Employers can receive assistance from both the BCIEI as well as the federal CEWS program.

Closing Remarks

As new information becomes available, we strive to keep you informed. Please do not hesitate to reach out if our lawyers can be of assistance to you with your workplace needs in this challenging time.