Federal Budget 2021 - Changes to COVID-19 subsidies and benefits

Updates to COVID-19 subsidies and benefits that were introduced during the pandemic were addressed by the federal government in their proposed 2021 budget on Monday, April 19. 

Those programs which are slated to undergo changes are outlined below.

*All changes are contingent upon government approval of proposed budget.

*Provisions have been put into place to extend most benefit and subsidy programs until November 20, 2021, if required.

EMPLOYMENT INSURANCE SICKNESS BENEFITS (EI)

Employment Insurance sickness benefits can provide you with financial assistance if you cannot work for medical reasons such as illness, injury, quarantine or any other medical condition that prevents you from working.

• Maximum application period will increase from 15 weeks to 26 weeks.
• The universal entrance requirements for EI will remain at 420 hours for the next three years. Previously, workers needed between 420 and 700 hours to qualify.
• Payments will remain at $500 (before tax) per week until September 25, 2021.

CANADA EMERGENCY BUSINESS ACCOUNT (CEBA)

Canada Emergency Business Account provides interest-free, partially forgivable, loans of up to $60,000, to small businesses and not-for-profits, that have experienced diminished revenues due to COVID-19 but face ongoing non-deferrable costs, such as rent, utilities, insurance, taxes and wages.

• Applications for both the $60,000 CEBA loan and the $20,000 expansion have been extended until June 30, 2021.

CANADA EMERGENCY RENT SUBSIDY (CERS)

Canada Emergency Rent Subsidy provides businesses, non-profit organizations, or charities who have seen a drop in revenue during the COVID-19 pandemic with a subsidy to cover part of their commercial rent or property expenses.

• Extended until September 25, 2021.
• Payments are scheduled to be phased out by September 25, 2021, beginning with a reduction on July 4, 2021.

Maximum Base Rent Subsidy Rate

Period 17 (June 6 – July 3) 65%

Period 18 (July 4 – July 31) 60%

Period 19 (August 1 – August 28) 40%

Period 20 (August 29 – September 25) 20%

• Expenses for each qualifying period are capped at $75,000 per location and are subject to an overall cap of $300,000 that is shared among affiliated entities.

CANADA EMERGENCY WAGE SUBSIDY (CEWS)

Canada Emergency Wage Subsidy will provide Canadian employers who have seen a drop in revenue during the COVID-19 pandemic with a subsidy to cover part of their employee wages.

• Extended until September 25, 2021.
• Payments are scheduled to be phased out by September 25, 2021, beginning with a reduction on July 4, 2021.

Maximum Weekly Benefit Per Employee

Period 17 (June 6 – July 3) $847

Period 18 (July 4 – July 31) $677

Period 19 (August 1 – August 28) $452

Period 20 (August 29 – September 25) $226 

CANADA RECOVERY BENEFIT (CRB)

Canada Recovery Benefit gives income support to employed and self-employed individuals who are directly affected by COVID-19 and are not entitled to Employment Insurance (EI) benefits.

• Extended by 12 weeks for a total of 50 weeks.
• Payments are scheduled to be phased out by September 25, 2021.
• The first four additional weeks will be paid at the current rate of $500 per week (before tax) and be reduced to $300 per week (before tax) for the remaining eight weeks.

CANADA RECOVERY CAREGIVING BENEFIT (CRCB)

Canada Recovery Caregiving Benefit gives income support to employed and self-employed individuals who are unable to work because they must care for their child under 12 years old or a family member who needs supervised care.

• Extended by 4 weeks for a total of 42 weeks.
• Payments will remain at $500 (before tax) per week.

CANADA RECOVERY SICKNESS BENEFIT (CRSB)

Canada Recovery Sickness Benefit gives income support to employed and self-employed individuals who are unable to work because they are sick or need to self-isolate due to COVID-19 or have an underlying health condition that puts them at greater risk of getting COVID-19.

• Maximum application period will remain at 4 weeks.
• Payments will remain at $500 (before tax) per week until September 25, 2021.

LOCKDOWN SUPPORT

Lockdown Support is available to organizations with locations that are temporarily forced to close or temporarily have their business activities significantly restricted by a public health order issued under the laws of Canada or a province or territory.

• Extended until September 25, 2021.

Questions?

For more information about these proposed changes to the COVID-19 benefits and subsidies, please contact our tax expert, Andrea Harper, or complete the contact form below.