A live webinar, “Financial Advice for Turbulent Times brought financial and legal subject matter experts to provide information on the newly available federal government COVID-19 support programs and provide a perspective on the longer-term impact on practice value. The webinar was sponsored by BMO Bank of Montreal and ROI Corporation, Canada’s largest health professional brokerage.

Many questions posed by attendees are of interest to all practice owners. Below, we have recapped the key points and questions for the benefit of practice owners.

The Canadian Emergency Wage Subsidy (CEWS) and Canadian Emergency Business Account (CEBA) were the key topics reviewed.

The experts noted that both of these programs are very new.  The government announcements are made with high level bullet points that don’t often drill down into the necessary details that clarify the benefits.

The general advice to practice owners is to make the claims even if there is some uncertainty as to the eligibility or requirements.   If in doubt… SUBMIT THE CLAIMS.

 Canadian Emergency Wage Subsidy (CEWS)

  • The CEWS provides a wage subsidy of up to 75% of wages for retained employees to a maximum amount of $847 per week retroactive to March 15 until June 6.
  • There are two key eligibility factors:
    • Employers with an annual payroll of $50,000 to $1,000,000
    • Show a 30% year over year decline in revenue for the periods of March, April and June.

Canadian Emergency Business Account (CEBA) 

  • The CEBA provides a $40,000 line of credit with specific terms and conditions.
  • Balance owing as of Dec. 31, 2020 is converted to a 5-year term loan until Dec, 2025
  • The is no interest until Juan 2023, and thereafter 5% interest
  • If 75% if the loan is paid back on/before Dec. 31, 2022 – 25% of the loan is forgiven
  • Apply to the CEBA through your principal business banking institution

 Q&A recap:

Can the CEWS be used to pay ourselves as practice owners?
So long as the practice owner is on the payroll it appears as though the CEWS applies. Employers will be asked to provide a summary T4 report for the year 2019 to provide evidence of payroll eligibility.

As a business owner am I eligible for CEWS benefit?
IF you are on the official payroll of the business, YES, otherwise, the rules are not clear. Individuals including self-employed and independent contractors experiencing loss of income due to COVID-19 should refer to the Canadian Emergency Response Benefit (CERB) program to check eligibility. https://www.canada.ca/en/services/benefits/ei/cerb-application.html

What if I have one employee and the annual salary falls just below the $50,000 threshold?
While technically short of the total annual wage eligibility, the advice is to apply.  The “rules” are fluid and may be adjusted in the future.  There is no harm in applying.

I hired staff before the COVID-19 crises and they did not start, is he eligible for the CERB?
This situation is not covered under CEWS.  We suggest to refer the person to CERB (see above). As written so far, he is not eligible for CERB, but as mentioned, the rules are fluid and subject to change.  

Are professional corporations eligible for the CEBA?
YES.

What other eligibility requirements are there for the CEBA?
As with the CEWS, business require to have an annual payroll of $50,000 to $1,000,000 to be eligible for this load.

As a business owner not on the payroll can I receive the Canadian Emergency Response Benefit and the Wage Subsidy?
You cannot “double dip” into these programs. If you are on the business’s payroll, the CEWS applies. IF not, you should evaluate the CERB.

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