COVID 19 - BUSINESS THREAD INFO/DISCUSSION

SpringVelocity

Crew Member
Just a thread to network with a bunch of us on this forum that have their own businesses. Discussion around temporary government benefits for business owners, self employed or contractors.
 
Regarding the 2,000 CERB The qualifications seem to contradict themselves, as one point is stopped working, while another is to not expect income for at least 14 days. I am thinking in the case of say a realtor, they have not stopped working, but certainly I would not expect them to have income.

In the case of a corp owned business, could the owner not be "laid off", not qualify for EI, as most corp owners do not, but would qualify for the Cerb, as most business owners receive some sort of T4 as an employee of the corp?
 
I have no idea if we are able to claim for the 75%. March was definitely down big time over March last year, but April has 3 jobs starting up and others finishing so April will be up over March this year. Month to month just isn’t a good indicator of whether our revenues are down 30%. I won’t really know the effects for another 6 months or so. Construction just goes up and down on a monthly basis but it takes a while to see if you’re up or down. it’s not like we are selling the same amount every month like a car dealership or something like that would be trying to do.

I do know of two large projects that we were going to be working on that have been “postponed”. So that would have been two good sized projects for us later this year that are cancelled for now, therefore our revenues for the year will be down, but it doesn’t help me right now with wage subsidies
 
Regarding the 2,000 CERB The qualifications seem to contradict themselves, as one point is stopped working, while another is to not expect income for at least 14 days. I am thinking in the case of say a realtor, they have not stopped working, but certainly I would not expect them to have income.

In the case of a corp owned business, could the owner not be "laid off", not qualify for EI, as most corp owners do not, but would qualify for the Cerb, as most business owners receive some sort of T4 as an employee of the corp?
Yes, i am a shareholder of the Corp and get a regular t4. I pay EI so I think I would be eligible for it.

self employed would be a different situation
 
Little different as I don't do construction.

The issue in my case is no employees I am solo owner/operator. I pay myself salary each year with all the CPP deductions as the primary shareholder. The issue in my case is all businesses sell my products are shut down, but I am still able to sell online. It isn't even enough to keep the lights on so too speak. Had few trickle in but those are to pay for material, and backed up expenses since we don't have our regular customers anymore. I estimate sales are down about 90% easily without our businesses being open. April would probably be fine to show that drop.

In my case our Feb, and also many of customers in retail was very good which is going to sting locally. Many of us at this time stocked in material, and many also grew inventory. The problem is though I shipped my orders out in Feb in 30 day we realize the revenue in March. March traditionally is always very slow time retail especially with tourism locations. Most of us are just getting going.

So the pickle I am in is when looking at numbers March as we don't really show a 30% drop. Unfortunately to wait till middle of April isn't an option for me.
 
For companies who have project type work in construction and tech, revenues always fluctuate unless you have steady management agreements for services. The wage subsidy act has a lot that still appears to be defined, particularly how we are to present our fy2019 and fy2020 revenues. In my case, we had a lights out march 2019 and a decent, but well under, march 2020 which would seem to indicate we would meet the 30% threshold. April 19 was decent but the GM was lousy while April 20 revenue will be in line with 19 but with strong GM and likely not qualify. In May 20 we will get slaughtered compared to May 19 so I'm interested in knowing if we can opt in and out of the program based on fluctuations in revenue? Also how will these funds be dispersed? If it's a cheque, tax relief, grant? Taxable?

Honestly in the end I will be shocked if I ever see anything out of this program in a timely manner, if at all. I'm definitely not counting on it as to date it rings of political sound bites.
 
The
I have no idea if we are able to claim for the 75%. March was definitely down big time over March last year, but April has 3 jobs starting up and others finishing so April will be up over March this year. Month to month just isn’t a good indicator of whether our revenues are down 30%. I won’t really know the effects for another 6 months or so. Construction just goes up and down on a monthly basis but it takes a while to see if you’re up or down. it’s not like we are selling the same amount every month like a car dealership or something like that would be trying to do.

I do know of two large projects that we were going to be working on that have been “postponed”. So that would have been two good sized projects for us later this year that are cancelled for now, therefore our revenues for the year will be down, but it doesn’t help me right now with wage subsidies

The 75% is not 75% yet either, it's still set at the originally anounced 10%. The 75 has not been approved yet. Hopefully that will be retroactive to March 15 as I beileive the date for teh 10% is.
 
The other fault I see is that if you partially cut staff hours to 25-50 % they would probably be better off financially to lay them off entirely to qualify for the 2k, as they may not make that only working part time.
 
The duration of the program is suspect as well. It isn't like things are going to simply resolve once covid season has diminished, it seems the government is banking on this event being a sharp V and I guarantee the other side will be an extended period of painful economic recovery, particularly for folks like us who's business rely on a minimum six month sales cycle, typically longer. The pain will really kick in later this calendar year and into next...
 
I posted up the wage subsidy:

The Canada Emergency Wage Subsidy
What It Means for Canadian Businesses
To help businesses keep and return workers to their payroll through the challenges posed by the COVID-19 pandemic, the Prime Minister, Justin Trudeau, proposed the new Canada Emergency Wage Subsidy. This would provide a 75-per-cent wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020.

This wage subsidy aims to prevent further job losses, encourage employers to re-hire workers previously laid off as a result of COVID-19, and help better position Canadian companies and other employers to more easily resume normal operations following the crisis. While the Government has designed the proposed wage subsidy to provide generous and timely financial support to employers, it was done with the expectation that employers will do their part by using the subsidy in a manner that supports the health and well-being of their employees.

Eligible Employers
Eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities.

Public bodies would not be eligible for this subsidy. Public bodies include municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals.

This subsidy would be available to eligible employers that see a drop of at least 30 per cent of their revenue (see Eligible Periods). In applying for the subsidy, employers would be required to attest to the decline in revenue.

Calculating Revenues
An employer’s revenue for this purpose would be its revenue from its business carried on in Canada earned from arm’s-length sources. Revenue would be calculated using the employer’s normal accounting method, and would exclude revenues from extraordinary items and amounts on account of capital.

For non-profits and charities, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their specific circumstances.

Amount of Subsidy
The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:

  • 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
  • the amount of remuneration paid, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration, whichever is less.
Further guidance with respect to how to define pre-crisis weekly remuneration for a given employee will be provided in the coming days.

In effect, employers may be eligible for a subsidy of up to 100 per cent of the first 75 per cent of pre-crisis wages or salaries of existing employees. These employers would be expected where possible to maintain existing employees’ pre-crisis employment earnings.

Employers will also be eligible for a subsidy of up to 75 per cent of salaries and wages paid to new employees.

Eligible remuneration may include salary, wages, and other remuneration. These are amounts for which employers would generally be required to withhold or deduct amounts to remit to the Receiver General on account of the employee’s income tax obligation. However, it does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.

A special rule will apply to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration.

There would be no overall limit on the subsidy amount that an eligible employer may claim.

Employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.

Eligible Periods
Eligibility would generally be determined by the change in an eligible employer’s monthly revenues, year-over-year, for the calendar month in which the period began. The amount of wage subsidy (provided under the COVID-19 Economic Response Plan) received by the employer in a given month would be ignored for the purpose of measuring year-over-year changes in monthly revenues.

  • For example, if revenues in March 2020 were down 50 per cent compared to March 2019, the employer would be allowed to claim the Canadian Emergency Wage Subsidy (as calculated above) on remuneration paid between March 15 and April 11, 2020.
The table below outlines each claiming period and the period in which it has a decline in revenue of 30 per cent or more.

Eligible Periods
Claiming period Reference period for eligibility
Period 1
March 15 – April 11 March 2020 over March 2019
Period 2 April 12 – May 9 April 2020 over April 2019
Period 3 May 10 – June 6 May 2020 over May 2019
For eligible employers established after February 2019, eligibility would be determined by comparing monthly revenues to a reasonable benchmark.

How to Apply
Eligible employers would be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly.

Ensuring Compliance
In order to maintain the integrity of the program and to ensure that it helps Canadians keep their jobs, the employer would be required to repay amounts paid under the Canada Emergency Wage Subsidy if they do not meet the eligibility requirements and pay their employees accordingly. Penalties may apply in cases of fraudulent claims. In addition, anti‑abuse rules will be proposed to ensure that the subsidy is not inappropriately obtained and to ensure that employees are paid the amounts they are owed. The government is considering proposing to create new offences that will apply to individuals, employers or business administrators who provide false or misleading information to obtain access to this benefit or who misuse any funds obtained under the program. The penalties may include fines or even imprisonment.

Interaction with 10 per cent Wage Subsidy
On March 18, 2020, the Prime Minister announced a temporary 10 per cent wage subsidy. For employers that are eligible for both the Canada Emergency Wage Subsidy and the 10 per cent wage subsidy for a period, any benefit from the 10 per cent wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period.

Interaction with the Canadian Emergency Response Benefit
An employer would not be eligible to claim the Canada Emergency Wage Subsidy for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit.

Employers who are not eligible for the Canada Emergency Wage Subsidy would still be able to furlough employees who will receive up to $2,000 a month.

Government Assistance
The usual treatment of tax credits and other benefits provided by the government would apply. As a consequence, the wage subsidy received by an employer would be considered government assistance and be included in the employer’s taxable income.

Assistance received under either wage subsidy would reduce the amount of remuneration expenses eligible for other federal tax credits calculated on the same remuneration.

How businesses will benefit from the Canada Emergency Wage Subsidy
Bruno and Tisha run a floral shop in Burnaby, British Columbia. They have four full‑time employees, each earning $800 per week, and 6 part-time employees, each earning $400 per week, for a total weekly payroll of $5,600. Bruno and Tisha have closed their shop and are only fulfilling online orders during this challenging period. They are keeping all of their employees on the payroll, paying them their full regular wages, despite their revenues being down by 30 per cent. Bruno and Tisha would be eligible for a weekly wage subsidy of $4,200 ($600 for each of their full-time employees and $300 for each of their part-time employees).
 
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I have no idea if we are able to claim for the 75%. March was definitely down big time over March last year, but April has 3 jobs starting up and others finishing so April will be up over March this year. Month to month just isn’t a good indicator of whether our revenues are down 30%. I won’t really know the effects for another 6 months or so. Construction just goes up and down on a monthly basis but it takes a while to see if you’re up or down. it’s not like we are selling the same amount every month like a car dealership or something like that would be trying to do.

I do know of two large projects that we were going to be working on that have been “postponed”. So that would have been two good sized projects for us later this year that are cancelled for now, therefore our revenues for the year will be down, but it doesn’t help me right now with wage subsidies

My understanding is it will be March 2020 vs March 2019 and April 2020 vs April 2019 and so on. Revenues will be how the business generally recognizes revenue. For large construction, this is usually percentage-of-completion based on costs incurred vs estimated total costs or some other basis. As such, if construction projects have slowed revenues should, therefore, be down.
 
So can't get wage subsidy and can't get the Emergency Benefit. What to do?

No subsidy I beleive but you will be covered by the Emergency fund 2k every 4 weeks as your business was effected due to covid-19 and if your payroll was over 50K you can apply for the 40K interest free for sometime that if paid back before the deadline you can keep 10 of it.

Here's a helpful link---> http://bowinnmamla.ca/covid19/suppo...r52W07S2Gyx71hqFM-VtOT_5ux8QWTzmPHNRAUG7WdwSA
 
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For companies who have project type work in construction and tech, revenues always fluctuate unless you have steady management agreements for services. The wage subsidy act has a lot that still appears to be defined, particularly how we are to present our fy2019 and fy2020 revenues. In my case, we had a lights out march 2019 and a decent, but well under, march 2020 which would seem to indicate we would meet the 30% threshold. April 19 was decent but the GM was lousy while April 20 revenue will be in line with 19 but with strong GM and likely not qualify. In May 20 we will get slaughtered compared to May 19 so I'm interested in knowing if we can opt in and out of the program based on fluctuations in revenue? Also how will these funds be dispersed? If it's a cheque, tax relief, grant? Taxable?

Honestly in the end I will be shocked if I ever see anything out of this program in a timely manner, if at all. I'm definitely not counting on it as to date it rings of political sound bites.


I think the purpose is to keep people on payroll and not have all the employer's layoff staff and have them move to EI/CERB. The amounts will be taxable to the Company, however, if the Company is down revenue 30% then likely it won't be in a profit position anyway. There will be a lag in getting money to employers, that is my understanding. However, I think the main purpose is that people are not laid off and when things start turning back to normal companies are able to start ramp back up much quicker.

I see it more as EI facilitated through the employer to prevent layoffs.
 
I think the purpose is to keep people on payroll and not have all the employer's layoff staff and have them move to EI/CERB. The amounts will be taxable to the Company, however, if the Company is down revenue 30% then likely it won't be in a profit position anyway. There will be a lag in getting money to employers, that is my understanding. However, I think the main purpose is that people are not laid off and when things start turning back to normal companies are able to start ramp back up much quicker.

I see it more as EI facilitated through the employer to prevent layoffs.

I agree 100% and layoffs are simply not happening at our place, no way. We were thin staffed before and I will do whatever it takes to ride this out. They will all stay on payroll for us and we are all in this together.
 
I'd heed caution listening to extreme criticisms at this point by the political parties. These things are not as easy as he lays out, and his comments about things that can happen with a few keystrokes is ridiculous.
People need money faster, obviously, however, there is no perfect solution to this at all.
 
So can't get wage subsidy and can't get the Emergency Benefit. What to do?
I would just apply for the cerb and im guessing you'll be approved. I know a few people that applied for ei that did not qualify for ei or the cerb and they were approved and told they would be put on the cerb when it started. Just looked at my banks requirements for that 40K loan and apparently you have to have employees and payrolls over 50k, so any small business or sole proprietor gets screwed, way to help out the small guys.
 
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