CFIB battles for benefits for COVID-19 affected business

After weeks of pressure from the Canadian Federation of Independent Business (CFIB), the federal government announced new programs to support businesses during the COVID-19 public health crisis.

The wage subsidy will increase from 10% to 75%. “We asked for this from the beginning and won the battle thanks to member support,” the CFIB said in a public statement. The program will run for 12 weeks, from March 15 to June 6 and apply to the first $58,700 earned by an employee.

Also, the Canadian Emergency Business Account will offer businesses interest-free loans of up to $40,000 with up to 25% in a forgivable loan if it’s repaid by the end of 2022.

CFIB president Dan Kelly says: “75% temporary wage subsidy and $40,000 loans, we fought for them and won, but we’re not done." 

Indeed, CFIB has brought several recommendations to government, urging officials to take quick action to ensure that business owners, from c-store to gas and car wash operators, have confidence they can access the subsidy to protect jobs: 

    •       Eliminate the 30% test for small and medium-sized firms or the need for a test for firms ordered by governments to fully or partially close.

    •       Create a different test to ensure that new or rapidly growing firms can access the support as well.

    •       Ensure flexibility for firms with special circumstances, including those affected by major events in 2019, where accounting rules do not allow access or facing giant increases in costs.

    •       Reduce the 30% test to 15% for March to reflect that the major impacts on business began in mid-March.

FAQ about the 75% wage subsidy to eligible small businesses:

Who is eligible?

    •       Businesses (regardless of the number of employees)

    •       Individual employers 

    •       Partnerships

    •       Not for profit organizations

    •       Charities

How do I calculate a 30% reduction in revenue?

You will have to compare your revenue for the month you wish to receive the subsidy with your revenue for the same month last year and show a 30% decrease.

As the subsidy is for salaries paid since March 15, the three claiming periods are the following:

    •       March 15 to April 11: compare March 2020 over March 2019

    •       April 12 to May 9: compare April 2020 over April 2019

    •       May 10 to June 6: compare May 2020 over May 2019

For employers established after February 2019, eligibility would be determined by comparing monthly revenues to a reasonable benchmark.

What is the eligible period?

For salaries paid between March 15 and June 6.

How much can I receive?

For employees hired before March 15, the subsidy will cover the lesser of:

    •       75% of the pre-crisis weekly remuneration paid (up to $847 per week); or

    •       Current weekly remuneration paid (up to $847 per week).

For new employees (hired after March 15), it will cover 75% of the current remuneration paid (up to $847 per week).

Do I have to pay the remaining 25%?

All employers would be expected to at least make their best efforts to top up salaries to 100%.

How can I apply?

Businesses will be able to apply through the CRA’s My Business Account portal, as well as a web-based application. Businesses will have to apply every month.