On June 10, 2020, the federal government tabled Bill C-17, An Act respecting additional COVID-19 measures that, if enacted, would provide or further COVID-19 financial relief measures.
Bill C-17 COVID-19 financial relief measures
The proposed legislation among other things would create
1. Ministerial powers to suspend certain time limits, including the time limits for temporary layoffs under the Canada Labour Code and federal court limits;
2. Change the Canada Emergency Wage Subsidy program by creating a second baseline remuneration period meant to capture seasonal workers and those employees who did not have remuneration between January and March 2020 (i.e., those who were on an unpaid leave). Bill C-17 also proposes to amend the definition of a qualifying entity to include an entity where payroll administration for its employees is undertaken by a “payroll service provider” and that provider has a payroll account with the CRA which is used to make source deduction remittances in respect of the employees of that entity. Furthermore, allowing corporations formed on an amalgamation of two or more predecessor corporations (or where a corporation is wound up into another) to calculate benchmark revenue using combined revenues and adding restrictions to the eligible entity definition for tax-exempt trusts.
3. Amend the Canada Emergency Response Benefit. Amendments to the CERB would
- support to individuals who experience a short-term loss of employment, quarantine themselves or care for someone diagnosed with COVID-19, whereby they will be allowed to make a claim for a two-week period rather than a four-week period under the current program;
- make it that individuals are no longer entitled to the CERB if they don’t return to work when recalled; and
- to create penalties for accessing the CERB on false or misleading pretences, or knowingly receiving the CERB when ineligible, up to a fine of $5,000 and/or six months imprisonment. The new penalties can apply retroactively to claims made before the introduction of this legislation.
4. Provide for support for Canadians with disabilities. This support includes a special one-time, tax-free payment to individuals who are certificate holders of the Disability Tax Credit as of June 1, 2020, as follows:
- $600 for Canadians with a valid Disability Tax Credit certificate
- $300 for Canadians with a valid Disability Tax Credit certificate and who are eligible for the Old Age Security (OAS) pension
- $100 for Canadians with a valid Disability Tax Credit certificate and who are eligible for the OAS pension and the Guaranteed Income Supplement (GIS)
As there was no opposition party support to “fast track” Bill C-17, it will be going through the normal process which could delay some measures or stop them from happening. That said, the government has said they will find other platforms to implement certain of the changes such as amending regulations and further negotiating with opposition parties.
For example, some of the other platforms found to introduce certain measures pending in Bill C-17 have already come to pass and are explained below.
Canada Emergency Wage Subsidy (CEWS)
On June 10, 2020, the Canada Revenue Agency (CRA) sent out a press release that the Government is introducing regulations to maintain the same Canada Emergency Wage Subsidy (CEWS) eligibility criteria. The press release stated that the Government of Canada has recently completed consultations with business and labour representatives on potential adjustments to the CEWS program to continue to protect jobs and promote growth, including the 30 percent revenue decline threshold. The key objectives of any potential changes will be to maximize employment, to ensure that the CEWS reflects the immediate needs of businesses and to support the post-crisis economic recovery. Any potential changes would commence as of periods 5 (July 5 to August 1) and/or 6 (August 2 to August 29).
Further details on this will be forthcoming. The same message has now been posted to the CEWS CRA page. Based on this, the 30 percent revenue threshold will continue to apply for period 4.
The CRA has now confirmed that the subsidy will maintain the 30 percent revenue drop threshold for the current June 2020 period, which relates to the period from June 7 to July 4, 2020. Employers that experience a 30 percent decline in revenue in June 2020 will be eligible for the 75 percent Canada Emergency Wage Subsidy during the related claim period. The CRA notes that further changes to the subsidy, including changes to this threshold, would only commence for later claim periods.
The reference period for eligibility to calculate the 30 percent required reduction in revenue is June 2020 over either June 2019; or average of January and February 2020.
The remaining subsidy claim periods are from July 5 to August 1, 2020 (in reference to July 2020) and from August 2 to August 29, 2020 (in reference to August 2020).
The CRA previously noted that certain employers may be required to provide a full list of employees and their Social Insurance Numbers (SIN) for verification after applying.
Canada Emergency Response Benefit (CERB)
On June 16, 2020, the Prime Minister announced that the government extended eligibility for the Canada Emergency Response Benefit (CERB) by eight weeks – enabling those who are trying to find work to keep claiming the $2,000/per month benefit. This extension will make the benefit available to eligible workers for up to a total of 24 weeks. You can read more on this new development in our previous post here.
We will keep you updated on the progress of Bill C-17 or any other platforms used by the federal government to provide COVID-19 financial relief measures.
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