Many employers are suffering from loss of business due to the impact of COVID-19. As a result, many people are finding themselves without work, either due to being laid off or terminated. Governments worldwide are attempting to lessen the economic impact of the pandemic. In Canada, the Federal government has taken several steps with a view to helping Canadians who are being impacted economically by the novel coronavirus. These include measures designed to help employees experiencing a loss of income due to COVID-19, and to support employers with a view to preventing layoffs.
The Canada Emergency Response Benefit
The Canada Emergency Response Benefit (CERB), enacted through the implementation of the COVID-19 Emergency Response Act, S.C. 2020, c. 5, currently provides a taxable benefit of $2,000.00 every four weeks for up to 16 weeks to eligible workers who have lost income due to the pandemic. Eligible workers are those:
- Residing in Canada, who are at least 15 years old;
- Who have stopped working because of reasons related to COVID-19 or are eligible for Employment Insurance regular or sickness benefits or have exhausted their Employment Insurance regular benefits between December 29, 2019 and October 3, 2020;
- Who had employment and/or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and,
- Who have not quit their job voluntarily.
As of April 15, 2020, the government changed the eligibility rules to allow people to earn up to $1,000.00 per month while collecting the benefit, to extend the benefit to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19; and to extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
There are various nuances to applying for the benefit. For example, those who have already applied must re-apply at the end of each four-week period. Further, people are to apply on specific days of the week, based on their month of birth.
The Canada Emergency Wage Subsidy
The Federal government is also attempting to protect Canadians from experiencing a loss of income due to COVID-19 by introducing the Canada Emergency Wage Subsidy, a measure intended to prevent layoffs and terminations. The mechanism by which it is intended to do is by providing a 75% wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020, up to a maximum benefit of $847.00 per week per employee. This applies for the period between March 15, 2020 and June 6, 2020. However, the first payments of the subsidy are not expected until early May, 2020.
There are various restrictions on which employers and what types of remuneration are eligible for the subsidy.
The Federal government is attempting to find ways to help those whose employment has been or may be affected by COVID-19. The CERB and CEWS are currently two of the main methods by which it is attempting to do so. Employees and former employees should be aware of the CERB and look into their eligibility for the benefit and how to apply. Employers should make sure to understand the eligibility and reporting requirements for the CEWS so that they can receive relief with respect to their payroll obligations and retain and/or re-hire employees without breaching any of the program’s restrictions or misestimating the amount of relief they can expect to receive.