A big win today for some small business owners who previously did not qualify for the $500/week Canada Emergency Response Benefit (CERB) or the 75% Canada Emergency Wage Subsidy (CEWS).

Canada Emergency Response Benefit

For the CERB, if you are paying yourself a non-eligible dividend from your corporation, an individual can now count this income towards the $5,000 income requirement to be eligible for CERB.

From canada.ca:

If I am in receipt of dividends am I eligible for the Canada Emergency Response Benefit?

“Yes, as long as the dividends are non-eligible dividends (generally, those paid out of corporate income taxed at the small business rate).

An individual could count this income towards the $5,000 income requirement to be eligible for CERB.”

https://www.canada.ca/en/services/benefits/ei/cerb-application/questions.html

Canada Emergency Wage Subsidy

For the CEWS, the Federal Government is adjusting the qualifying income reduction and the period to measure against:

When comparing March 2020 to March 2019, qualifying income reduction reduced to 15% to account for ½ month, April and May remain at 30% qualifying income reduction OR
Option of comparing against January and February 2020, qualifying income reduction is 30%

“Companies will now have the option of using January and February of this year as reference points to show a 30% loss. And businesses will only need to show a 15% decline in revenue in March instead of 30% because most of us only felt the impact of COVID-19 until half way through the month”

- Prime Minister Justin Trudeau

We continue to receive questions from Solo Small Business Owners asking whether they qualify for the government programs available. We created the chart below for:

Canada Emergency Response Benefit (CERB): $500/week for up to 16 weeks
Canada Emergency Wage Subsidy (CEWS): 75% Wage Subsidy
10% Wage Subsidy
Canada Emergency Business Account (CEBA): $40,000 Interest Free Business Loan ($10,000 Forgivable)

The chart is based on an example of 3 small businesses earning $100,000 in revenue but structured in 3 different ways:

Sole Proprietor: earnings paid out as 100% self-employed business income
Corporation: earnings paid out as 100% salary
Corporation: earnings paid out as 100% non-eligible dividend

The government is continually adjusting these programs to meet the needs of struggling business owners so check back often for updates.

*Current as of April 8th, 2020

	Sole Proprietor	Corporation
Revenue	$100,000	$100,000	$100,000
Income Type	Income	100% Salary Income	100% Non-Eligible Dividend Income
CERB Employment status: Not Working because of COVID-19	Eligible	Eligible	Eligible as long as the dividends are non-eligible dividends (generally, those paid out of corporate income taxed at the small business rate)
CERB Employment status: Part time work	Not Eligible	Not Eligible	Not Eligible
75% Wage Subsidy	Not Eligible	Eligible	Not Eligible
10% Wage Subsidy	Not Eligible	Eligible	Not Eligible
$40,000 Interest Free Business Loan ($10,000 Forgivable)	Not Eligible	Eligible	Not Eligible

For the full details, go to: https://www.canada.ca/en/department-finance/economic-response-plan.html#businesses

Canada Summer Jobs Program

For businesses hiring students, Ottawa boosts student job wage subsidy to 100%. The temporary changes to the program for this year include:

an increase to the wage subsidy, so that private and public sector employers can also receive up to 100% of the provincial or territorial minimum hourly wage for each employee
an extension to the end date for employment to February 28, 2021
allowing employers to adapt their projects and job activities to support essential services
allowing employers to hire staff on a part-time basis

These changes will help youth stay connected to the labour market, save money for their future, and find quality jobs in safe, inclusive, and healthy work environments.