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May 21, 2020May 21, 2020

How Do I Apply For the CECRA For Small Businesses?

A picture of a store opening to denote a business being able to stay open due to their landlord applying for the CECRA program to help reduce their rent.

How do I apply for the CECRA for small businesses? What is the CECRA program? The Canadian government just announced more emergency measures for small businesses to help weather Covid-19. However, this time the focus is on helping commercial landlords. Let’s explain this new program.

How Do I Apply For the CECRA – What is it?

CECRA stands for Canada Emergency Commercial Rent Assistance for small businesses. The goal of the program is to provide rental relief for small businesses. The government achieves this by providing forgivable loans to commercial landlords as an incentive to lower rents for their tenants.

How Do I Apply For The CECRA – How Does it Work?

First, the commercial landlord goes into an agreement with their tenant(s) to reduce their rent to 25% of normal rate for three months (April 2020 , May 2020, June 2020). The landlord will then take a loan from the Government of Canada to cover the other 75% for this time frame. If the landlord and tenant meet the program’s criteria, the landlord can have 2/3 of his/her loan forgiven. What does this mean in layman’s terms?

Suppose a landlord had a tenant who was paying $20,000 in rent each month. If the landlord wanted to be part of this program, they would go into an agreement to reduce their rent by 75% for April, May and June. This means the tenant would only pay $5000 per month for these three months. The landlord would then take a loan for $15000 per month for the three months from the government or $45000 in total. The landlord then can potentially have $10000 per month of the loan forgiven or $30000.

So what does this mean? it means that landlord will receive 75% of the required rent for these 3 months instead of 100%. The tenant will only pay 25% of their rent for same period. This means the landlord will incur a 25% loss in rent this time frame. But this amount is covered by the loan in which they pay back. Why would landlords choose to do this?

What is the Incentive for Landlords?

The government is banking on 3 reasons that landlords will apply for the programs. Here is a summary of the reasons from the Canada Mortgage and Housing Corporation whom the government is using to administer this program.

There is an incentive of getting a government loan where potentially 2/3 of it could be forgiven.
The landlord is guaranteed at least 50% of your rent for the months of April, May, and June. This is huge considering the alternative could be receiving NOTHING in rent if businesses can’t afford to pay.
Finally, eviction and finding new tenants can be an expensive and time consuming process that could be very costly. So, perhaps landlords can prevent this altogether.

How Can I Apply For The CECRA Program?

You will need to go to the CMHC website. However, the application portal for this program will not be open until Monday May 25, 2020 at 8:00 am eastern time. And then the government will take a staggered approach for applying due to the expected high volume. Here’s the schedule from the the CMHC website below:

NOTE: Once registered, the portal will be available 24/7 for applicants to input data and upload documents.

Day	Who should register?
Monday	Property owners who are located in Atlantic Canada, BC, Alberta and Quebec, with up to 10 tenants who are eligible for the program
Tuesday	Property owners who are located in Manitoba, Saskatchewan, Ontario and the Territories, with up to 10 tenants who are eligible for the program
Wednesday	All other property owners in Manitoba, Saskatchewan, Ontario and the Territories
Thursday	All other property owners in Atlantic Canada, BC, Alberta and Quebec
Friday	All

What Information Will I Need to Apply For the CECRA Program?

There are a few pieces of information you will need to give to apply for the program. Here are a list below from the the CMHC website:

Attestations

Tenant or Sub-tenant’s Attestation (sample PDF):
Property owners must have each of their eligible commercial small business tenants and/or subtenants sign an attestation. The Tenants are responsible for attesting to their eligibility with the program requirements.
Property Owner’s Attestation (sample PDF):
Property owners must sign an attestation. This confirms the information relating to the property owner and the property provided in the application is correct. And it attest to their eligibility with the program requirements.

Agreements

Rent Reduction Agreement (sample PDF): All application documents will be accessible on May 25, 2020.
Property owners must enter into a legally binding rent reduction agreement with each impacted tenant. And confirm the rent reduction in accordance with the program terms and conditions. This agreement is conditional upon final approval of the application for CECRA for small businesses.
Forgivable Loan Agreement (sample PDF):
Property owners must agree to the terms and conditions in the application and outlined in the forgivable loan agreement.

You’ll also need to provide the following information:

Property owner information

Property information includes: property address, property type, property tax statement, latest rent roll for each property and the number of commercial units
Applicant information includes: banking information, property owner contact information, co-ownership information and contact details for co-owners

Tenant information

Tenant information includes: tenant contact information, registered business name, lease area and the monthly gross rent for the period of April, May and June 2020

Conclusion

The CECRA program is a very detailed program. If you think you might want to apply, please go to the CMHC website and read it carefully. However, the amount of information provided could be overwhelming. Hopefully this summary helps you in understanding the program better. Which is important because this is a big decision to make and the stakes are high. Stay safe everyone.

May 7, 2020May 7, 2020

Canada Emergency Wage Subsidy Program, What is it?

A picture to denote someone looking at the options of the Canada Emergency Wage Subsidy Program.

You might be wondering what is the Canada Emergency Wage Subsidy Program (CEWS) all about? It is an important question because many business owners are suffering right now due to COVID-19. They want to remain open and keep their staff employed, but many do not understand the specifics of this program that is supposed to help them. Let’s provide some clarity to this program.

What is the Canada Emergency Wage Subsidy Program (CEWS)?

It is a wage subsidy program for businesses whose revenues have been negatively affected by the coronavirus outbreak. The amount of the wage subsidy is 75% of employees wages for a 12 week period from March 15, 2020 to June 6, 2020. The purpose of the subsidy is to rehire previously laid off workers as a result of Covid-19 to prevent further job losses and put businesses in a better position to recover after the crisis passes. For more information, go to the Government of Canada’s website.

Canada Wage Emergency Subsidy Program (CEWS): Who is Eligible?

In a nutshell you eligible for this Government of Canada program if you are an employer who has experienced a reduction in revenue and had a CRA payroll account on March 15, 2020. The Government of Canada’s website has a list of eligible employers but the only ineligible employers appear to be public institutions such as municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals.

You Must Also Have an Eligible Reduction

Besides being an eligible employer, you must also have an eligible wage reduction. What is that? You are basically comparing your normal monthly revenue with the the 3 months affected by Covid-19 (March 2020, April 2020, May 2020). However, there are 2 choices to choose from to use as your normal monthly revenue. (This refers to pre-coronavirus revenue.)

Option 1 is to use your revenue from the corresponding month of the previous year. This means you would use March 2019 as your normal revenue period and compare it with March 2020 and there should be a revenue drop of at least 15% to be eligible for that period. You would then use April 2019 and compare with April 2020 and there should be a revenue drop of 30% to be eligible for that period. Finally, you would use May 2019 and compare with May 2020 and there should be a revenue drop of 30% to be eligible for that period.

Option 2 is that you take the average monthly revenue for January and February 2020 and compare this with March 2020, April 2020, and May 2020. You would be eligible for subsidy for a particular month if there is a reduction in revenue of at least 15% in March, 30% in April, and 30% in May.

Here’s is a warning, however. Whatever option of comparing revenue you choose, you have to stick to using that option when calculating the revenue reduction of each month. You cannot switch between options.

Who are Eligible Employees for the Canada Emergency Wage Subsidy Program ?

They are employees hired by you and who have not been paid by you for less than 14 consecutive days. Employees whom you have laid off can become eligible if you rehire and retroactively pay them. You must do this before you can include them in your calculation of the wage subsidy.

How to Calculate the Wage Subsidy?

At the Government of Canada’s website, there is an Excel spreadsheet and a calculator to help you calculate this amount. It is based on the following information below:

the number and type of eligible employees you have, and
the amount and type of pay in respect of a period they received before and during the crisis

Note: There is no limit on the total subsidy amount that an eligible employer may claim.

How to Apply for the Canada Emergency Wage Subsidy Program?

The government’s website shows 3 ways you can apply below:

Most businesses may apply using My Business Account
- Sign in to My Business Account
- Register for My Business Account
Business representatives may apply using Represent a Client
Note: Only representatives authorized at Level 2 or 3 will be able to apply
- Sign in to Represent a Client
- Register for Represent a ClientDownload: Attestation for owner/managers and/or senior employees
If neither are an option for you, use the Web Forms application with your web access code. If you do not have a web access code, you will need to provide the date of registration or the total income tax reported in box 22 of the most recent original 2018 tax year submitted T4 summary.
- Sign in to the Web Forms application
- Get a web access code

When Will you Get Paid?

The government’s website says that you can get paid within 10 days of applying if you have direct deposit. If you are getting paid by cheque, this will take a bit longer.

Also of note, the Canada Wage Subsidy is taxable and therefore you will have include it on your tax return as taxable income.

Conclusion

The Canada Emergency Wage Subsidy Program may appear to be a complicated and detailed program to apply for. However, it could be very beneficial as it helps you cover most of your employees’ wages for a 3 month period. One benefit is that you can get money fairly quickly once you apply. It is something that businesses in Canada should seriously look into. Because it could make the difference between staying open and closing for good.

You Might Also Like: The CEBA Program for small business

April 27, 2020April 27, 2020

CEBA Program Details For Small Businesses

An opening sign to denote a business using CEBA program details to stay open and surviive through covid-19.

CEBA program details is something that many Canadian business owners are looking for today as many businesses have had to shut their doors due to the COVID-19 pandemic. However, due to the stress of their business shutting down and the financial burden that follows, many do not know where to start and feel overwhelmed. Hopefully, this article can help make things clearer.

CEBA Program Details – What is CEBA?

CEBA stands for the Canada Emergency Business Account and is a federal government loan program that provides small and medium-sized businesses with a limited-time, interest-free loan of up to $40,000. For more details on CEBA visit https://ceba-cuec.ca/. Here are some of the details of the program as provided to me by one of the banks that I deal with First Calgary below:

The CEBA Loan Includes:

$40,000 loan at 0% interest until December 31, 2022
No minimum monthly principal payments required until December 31, 2022
$10,000 loan forgiveness is available, provided outstanding balance is $40,000 at December 31, 2020, and $30,000 is paid back between January 1, 2021 and December 31, 2022.
Payments can be voluntarily made at any time without fees or penalties

CEBA Program Details – Who is Eligible?

Who is eligible to apply for the CEBA program? Here is the list of criteria from the Government of Canada’s website below:

The Borrower is a Canadian operating business in operation as of March 1, 2020.
The Borrower has a federal tax registration.
The Borrower’s total employment income paid in the 2019 calendar year was between Cdn.$20,000 and Cdn.$1,500,000.
The Borrower has an active business chequing/operating account with the Lender, which is its primary financial institution. This account was opened on or prior to March 1, 2020 and was not in arrears on existing borrowing facilities, if applicable, with the Lender by 90 days or more as at March 1, 2020.
The Borrower has not previously used the Program and will not apply for support under the Program at any other financial institution.
Borrower acknowledges its intention to continue to operate its business or to resume operations.
The Borrower agrees to participate in post-funding surveys conducted by the Government of Canada or any of its agents.

CEBA Program Details – How to apply?

You apply through your financial institution and most of them should have this program available to you. You can either call or go in to speak to someone about it. However, an even easier way is to apply online at your financial institution. For example if you go to First Calgary’s website, you are presented with the following details below:

HOW DO I APPLY FOR CEBA?

For your convenience you can apply from home using our online application. Our team of advisors will contact you once your application has been received to discuss next steps.

FOR A SPEEDY EXPERIENCE, PLEASE HAVE THE FOLLOWING INFORMATION ON HAND:

2019 T4 Summary of Remuneration Paid (T4SUM) that shows an annual payroll of between $20,000 and $1.5 million (if you cannot locate your T4SUM, contact the Canada Revenue Agency to have them reissue it to you)

A 15-digit Canada Revenue Agency Number also shown on the T4SUM

Business contact information, including phone number and email address.

APPLY NOW

Conclusion

Finding out what you can apply for in this climate can be a challenge. However, it is important to know what options you have. For many small businesses, this program could be the difference between surviving or dying. So have a look and see if the CEBA program details fits you and your business. Because in this COVID-19 world, information is power.

April 23, 2020April 23, 2020

CPP Payment Dates Affected by Covid-19?

A person wearing protective to symbolize pademic to highlight will cpp payment dates change due to covid-19.

Will CPP payment dates change during the coronavirus pandemic? It is a logical question to ask as the government is currently involved deeply in “The Canada Emergency Response Benefit” program. This CERB program helps individuals who’ve lost their jobs because of Covid-19. The CERB also helps business owners with grants and loans. As a result, Canadians on CPP might be concerned that this will affect their payments. Will their payments be affected? Will the dates they will receive their payments change? The answer is no.

CPP Payment Dates Stay the Same

Here’s what the federal government’s website has to say regarding this issue: “If you receive federal benefits, including some provincial/territorial benefits, you will receive payment on these dates. If you set up direct deposit, payments will be deposited in your account on these dates.”

Here are the CPP payment dates below for the rest of 2020. This includes the Canada Pension Plan (CPP) retirement pension and disability, children’s and survivor benefits.

January 29, 2020
February 26, 2020
March 27, 2020
April 28, 2020
May 27, 2020
June 26, 2020
July 29, 2020
August 27, 2020
September 28, 2020
October 28, 2020
November 26, 2020
December 22, 2020

If Applying for CPP, Apply Online Due to Covid-19

If you are applying for your Canada Pension, the government strongly suggests you apply online as the process has been simplified to make it easier for you. Notice what the government’s website says about this below:

An important note for people applying for Canada Pension Plan, Canada Pension Plan Disability or Old Age Security.

You can apply online through your My Service Canada Account for the following:

Canada Pension Plan Retirement Pension
Canada Pension Plan Disability Benefit, or
Old Age Security/Guaranteed Income Supplement

Due to the COVID-19 pandemic, Service Canada is strongly encouraging you to apply for these benefits online, from the comfort of your home. You will not be required to submit documentation to support your application at this time. Service Canada may be requesting these documents at a later date, but in the meantime, we can begin working on your application.

Conclusion

CPP payment dates will not change amid Covid-19, and that is a relief for many Canadians who depend on these payments. The coronavirus has brought a lot of anxiety to many people, especially our seniors so at least this is one less thing to worry about. And that is definitely a good thing!

March 23, 2020March 26, 2020

What can I do if I Can’t Pay My Bills Because of Coronavirus?

Picture showing dilemma of how can I pay for bills during coronavirus

“I can’t pay my bills because I was laid off because of Coronavirus.” Sound familiar? This is a scary scenario but unfortunately this is a reality for many today amid this pandemic. This reality is apparent when we see that in just one week in Canada, over 1 million applied for EI or other emergency support benefits. If you find yourself in that scenario, what can you do to help yourself and your family?

Communication – Talk to Your Bank or Utilities providers

Communication seems overly simple but this is vital especially when everything is so fluid right now and it is hard to know what information is correct. So, whoever you pay bills to, you need to contact them and let them know your situation and see what options you have to lighten your bills because of your changing job situation, due to the coronavirus. There might be options to help. Here are some things you can do if you have bills to pay in these five main areas.

Mortgage Payments

A few days ago, the countries six largest banks announced a plan for deferral of mortgage payments to up to six months. Individuals and business owners should contact their bank to discuss available options. Each deferral request will be reviewed by a case by case basis.

Rental payments

At the moment there does not appear to be a program to address help for rentals. Some areas like Ontario are encouraging landlords not to evict anyone during this time. However, the best thing to do is to contact your landlord to see if there are any options to help provide some financial relief. You can also look into the government’s Covid-19 relief package to see if you qualify for any of the relief. Also, you can look into any provincial relief packages that your province might provide to help give you money to pay for your rent. (Updated March 26/20 – B.C. now has provided help of up to $500/month to help renters pay the rent on their homes.)

Car Payments

Contact your financial institution to see if there are options regarding paying the loan or lease of your vehicle due to financial hardship. For example here’s that information from the RBC website concerning this:

Client relief: The events surrounding COVID-19 are truly unprecedented and disrupting the daily lives of Canadians. RBC has put in place financial relief programs for personal and business clients who have experienced financial hardship as a result of the COVID-19 outbreak. To help clients with immediate relief, some of these programs are available by self-serve, including skip a mortgage payment, an auto-loan payment, and personal loan payment. These options will provide you with direct relief for one month. Please know that we will continue to work with you to provide further financial assistance, including further payment relief (for example, up to 6 months on mortgages), should you need our help.

Utility Payments Such as Power, Phone, TV, and Internet

It is best to contact your provider to see what options you have due to financial hardship. These companies and utility providers are well aware that many people are in this scenario and they are looking to assist. For example, here’s an excerpt from Shaw’s website:

We continue to monitor the COVID-19 situation closely and we know that the threat posed by the spread of the virus will result in some Shaw customers facing unexpected financial challenges. We also know that particularly in times like these, we rely on being connected – to our family, our friends, or our workplace – or keeping our families informed and entertained. If you are having any concerns about paying your monthly Shaw internet bill due to hardship resulting from the COVID-19 situation, we will work with you to find a flexible payment arrangement that considers your financial and connectivity needs.

Credit Card Payments

It is best to contact your financial institution and let them know of your situation. Communication again is key! Fortunately, many banks and financial institutions are reaching out to clients and letting them know their options to help lighten the financial burden. For example, here’s an email I received from Capital one:

We understand that COVID-19 is having an impact on our customers’ lives. For those who are experiencing financial distress, we’re working on options to provide support through this difficult time. As soon as we can, we will make more information on these options available.

For additional information about our response to the COVID-19 situation, please visit our webpage. We’ll continue to update it with relevant information.

Conclusion

Not being able to pay your bills during the Coronavirus pandemic is a horrible prospect. We are in uncharted waters and do not know how long this will go. As result, it’s hard to make decisions – especially financial ones. The best thing we can do is to get as much information as possible on our options for potential relief by directly communicating to the companies we owe money to.

There’s an old saying that there is wisdom in a multitude of counselors. This is true because the more information we get from our creditors, the greater chance of some sort of financial relief. So look at your bills one at a time and see if there is a chance of some sort of relief. The result might be a little less stress in these already very stressful times. Take care and be safe.