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COVID-19 Federal Economic Relief Measures


This article has been updated as of January 18, 2021

The Federal Government has announced and implemented several measures to support Canadians and Canadian businesses through the economic turmoil associated with the COVID-19 pandemic. These measures are primarily intended to help with business liquidity in the short term so they can survive through the pandemic and to encourage job retention of employees.

Below is a list of the measures announced by the Government that we believe will be most relevant to our clients.


Filing Deferrals offered by the CRA: NOW EXPIRED

  • Filing deadlines for personal and corporate returns and administrative actions were deferred until June 1. Any balances owing related to these returns were due September 1, 2020.
  • For charities with a Form T3010, the deadline for any information return due between March 18, 2020 to December 31, 2020 was extended to December 31, 2020.
  • The CRA has now announced that it will resume audit work with altered procedures in place to ensure safe distances (e.g. taxpayers may send information via email).
  • For a summary of the deadlines, click here.

The government also passed legislation on July 20, 2020 that included suspension of certain time limits and court proceedings.


Payment Deferrals offered by the CRA: NOW EXPIRED

  • Income tax amounts owed by individuals and businesses were deferred to September 1, 2020. The amounts eligible for deferral were those owing between March 18 to September 2020. This relief applied to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties accumulated on these amounts during this period. This only applied to income taxes– being income tax installments and any income tax amounts due.
  • However, there are no deferrals for payroll remittances or remittances of other tax withholdings such as non-resident withholdings under section 116 of the Income Tax Act which must still be remitted to the CRA. Unless the Government has specifically stated an amount payable to the CRA may be deferred, it should be assumed it is still payable.
  • For a summary of the deadlines, click here.


Administrative relief for residency by the CRA

The CRA has published administrative relief for international persons or transactions. Generally, for persons who cannot travel into or out of Canada due to COVID-19 travel restrictions, the days spent in Canada and transactions effected during those days will not “count” towards residency considerations.

This gives relief to persons who may inadvertently spend 183 days or more in Canada, even though it was not their intention, who would otherwise be deemed a Canadian tax resident. Also, where a director must meet in Canada when they usually would not, this will not imply Canadian residency for the corporation simply for that reason. Relief is also extended to non-resident companies that have employees in Canada who, due to the travel restrictions, are performing their duties in Canada – this will not create a permanent establishment simply for this reason.

For more information, see here.


Canada Emergency Wage Subsidy (“CEWS”) – 75%

DEADLINE: The deadline for applying for CEWS is January 31, 2021 for any periods up to July 31, 2020.

The overall deadline is 6 months after the period that is being claimed. These appear to be hard deadlines with no opportunity for late filing.


For each qualifying period in which you want to apply for the CEWS, consider the following steps:

  1. Is it an eligible entity (employer)? –See Definitions section
  2. Has the eligible entity paid eligible remuneration to an eligible employee? – See Definitions section
  3. Has the eligible entity earned qualifying revenue? – See Qualifying Revenue section
  4. What is the revenue reduction of the entity? – See Qualifying for CEWS and Amount section
  5. For periods 1 to 4 only, has the revenue reduction met the threshold to qualify for CEWS? – See Qualifying for CEWS and Amount section
  6. What is the formula to calculate the CEWS for later qualifying period? – See Qualifying for CEWS and Amount section


  • Baseline remuneration” is the average weekly eligible remuneration, excluding any period of seven or more consecutive days for which the employee was not remunerated, paid to the eligible employee by the eligible entity during the period that is:[1]
    • January 1, 2020 and March 15, 2020; or
    • If the eligible entity elects:
      • March 1, 2019 to May 31, 2019, in respect to CEWS being calculated for periods 1 to 3; or
      • March 1, 2019 to June 30, 2019, in respect to CEWS being calculated for period 4; or
      • July 1, 2019 to December 31, 2019, in respect to CEWS being calculated for periods 5 to 10;
  • Eligible employees” are defined as those who are employed primarily in Canada and have not been without eligible remuneration for 14 days or more during the qualifying period in which the CEWS is claimed. However, for periods 5 to 13, individuals employed primarily in Canada by the eligible employer throughout the claim period are no longer excluded if they are without remuneration in respect of 14 or more consecutive days in that claim period.[2]
  • Eligible entities” mean employers that are:
    • Individuals (other than a trust for periods after May 9, 2020);
    • Taxable corporations (or trust for periods after May 9, 2020);
    • Partnerships consisting of eligible employers;
    • Not-for-profit organizations, chambers of commerce, labour organizations and societies, and benevolent or fraternal societies or orders;
    • Registered charities; and
    • “Prescribed organizations”. Regulations extend eligibility for the CEWS to the following groups:
      • Partnerships that are up to 50-per-cent owned by non-eligible members;
      • Indigenous government-owned corporations that are carrying on a business, as well as partnerships where the partners are Indigenous governments and eligible employers; 
      • Registered Canadian Amateur Athletic Associations;
      • Registered Journalism Organizations; and
      • Non-public colleges and schools, including institutions that offer specialized services, such as arts schools, driving schools, language schools or flight schools.
  • Public institutions will not be eligible for the subsidy. These include municipalities and local governments, Crown corporations, public universities, colleges, schools, school boards, hospitals, and health authorities.
  • The CRA indicated in a technical interpretation that corporations that have treaty-exempt Canadian source income are not precluded from being an eligible entity.
  • The most recent legislation included amendments that now ensures that CEWS applies appropriately to amalgamated corporations and aligns the treatment of trusts and corporations.
  • In order to be eligible for CEWS, the entity must have, on March 15, 2020, had a CRA business payroll number. If an entity does not have its own payroll/business number but instead uses a “payroll service provider” (who does have a payroll/business number), then it may still be eligible for CEWS. In these situations, the entity must have employed at least one individual in Canada to be eligible.
  • In many cost-sharing arrangements (often used by doctors and other professionals), there is more than one employer since there are multiple participants in the arrangement to share certain costs. The CRA has recently indicated that where the arrangement is, under common law, considered an “agency”, each of the employers may qualify for the CEWS in relation to the remuneration that each was responsible to pay through the cost-sharing arrangement/agency. Each employer still must meet the other criteria to be eligible. So long as the employers otherwise meets the requirements, including that the agency had a payroll number on March 15, 2020, then each of the employers may apply for the CEWS for prior periods. In order to apply, the employers must each now apply for their own payroll account.
  • Eligible remuneration” means any employment earnings that would be subject to remittances and withholdings, such as salary, wages, etc. It excludes employee stocks options, retirement allowances, severance pay, etc.
  • Prior reference period” means means, with respect to a particular 2020 qualifying period, the same month in the 2019, or January and February 2020 (if the employer elects). For the 2021 qualifying periods, the proposed prior reference periods are as follows:[3]

Note, if the “alternative approach” was used in 2020 (i.e. compared to January to February 2020), then it should continue to be used for periods 11-13 periods as well.

  • Qualifying periods (all in 2020):
    • Period 1: March 15 to April 11;
    • Period 2: April 12 to May 9;
    • Period 3: May 10 to June 6;
    • Period 4: June 5 to July 4;
    • Period 5: July 5 to August 1;
    • Period 6: August 2 to August 29;
    • Period 7: August 30 to September 26;
    • Period 8: September 27 to October 24;
    • Period 9: October 25 to November 21;
    • Period 10: November 22 to December 19, 2020;
    • Period 11: December 20, 2020 to January 16, 2021;
    • Period 12: January 17 to February 13, 2021; and
    • Period 13: February 14 to March 13, 2021.
    • Future periods will extend to June 2021, with further details to be announced.
  • Qualifying revenue” is discussed in below in its own section.
  • Additional definitions are used for periods 5-13, such as “base percentage”, “base revenue reduction”, and “top-up percentage”, but these will be discussed below instead.

Qualifying Revenue

To calculate revenue, the employer can use their normal accounting method (which in most cases will be the accrual account method) or may elect to use the cash accounting method. Whichever method is selected will need to be applied to all qualifying CEWS periods and all comparison periods. For example, if you use the cash accounting method to determine revenue for March 2020 and are comparing it to March 2019’s revenue, March 2019’s revenue and all the other reference periods will also need to be calculated using the cash accounting method. Since in many cases the accrual method is the normal accounting method, this may mean the comparison periods’ revenue will need to be recalculated using the new chosen method.

As a quick explanation, accrual accounting would treat an issued invoice as revenue upon it being issued (and work performed) whereas cash accounting would only consider an invoice as revenue once cash has been received to pay for it. This means if a drop in revenue is going to affect billings but all your billings will be paid in a timely manner, the accrual method will likely be better. On the other hand, if invoices are not being paid in a timely manner, or at all, the cash method will likely be the more appropriate method of calculating revenue.

Extraordinary items and non-arm’s lengths revenues are excluded from the calculations of revenue. Extraordinary items are determined as a question of fact but, generally, would be those that are:[4]

  1. Not be expected to occur regularly or frequently within several years. Grants or other government assistance that an entity is eligible to receive on a regular or reoccurring basis would not meet this criteria.
  2. Not typical of the normal activities or risks inherent in the normal operations of the entity. Consideration should be given to the nature of the services or products offered by an entity and the normal environment in which it operates.
  3. Primarily out of the control of owners or management. Consideration should be given to the extent that inflows are influenced by the decision of owners or management.

Government funding related to COVID-19 assistance would likely meet these criteria and would likely be considered an extraordinary item.

Generally, “qualifying revenue” only includes the arm’s length revenue received in the course ordinary activities in Canada. This excludes extraordinary items, the CEWS and deemed remittances under the TWS program. However, there are a number of exceptions to this general rule.[5]

  • Registered charities may include revenue from related businesses, gifts and other amounts received in the course of ordinary activities. They may exclude government funding amounts.
  • Not-for-profits, chambers of commerce, labour organizations and benevolent or fraternal societies may include membership fees and any other amounts received in the course of ordinary activities. They may exclude government funding amounts.
  • Organizations that normally present consolidated financial statements can have each member determine their respective qualifying revenue separately, provided that all members do so.
  • Members in an affiliated group can jointly elect that qualifying revenue of the group be determined on a consolidated basis.
  • If all of the interests in an employer is owned by participants in a joint venture and 90% or more of the employer’s qualifying revenue is from the joint venture, then the qualifying revenues of the joint venture (determined as if the joint venture were an eligible entity) may be used for the revenue test.
  • If at least 90% of the qualifying revenue (other than the fact that it is non-arm’s length) comes from non-arm’s length persons or partnerships, then the employer and the non-arm’s length persons or partnerships may all jointly elect to account for non-arm’s length revenue in the revenue test. There is a complicated weighted average formula to account for calculating the qualifying revenue in this case and we recommend contacting a tax practitioner to assist you in this regard. Note, this does not apply for non-arm’s length persons or partnerships who are in a multi-tiered structure or where there is a chain of entities and all of the claimant’s qualifying revenue is also received from persons or partnerships that are not dealing with each other at arm’s length.

Qualifying for CEWS and Amount

The qualifying periods 1 to 4 are dealt with in the earlier legislation and periods 5 to 10 are part of the  more recent legislation. As such, we divide the discussion for each group of periods into two sections.

As mentioned above, for each qualifying period in which you want to apply for the CEWS, consider the following steps:

  1. Is it an eligible entity (employer)?
  2. Has the eligible entity paid eligible remuneration to an eligible employee?
  3. Has the eligible entity earned qualifying revenue?
  4. What is the revenue reduction of the entity?
  5. For periods 1 to 4 only, has the revenue reduction met the threshold to qualify for CEWS?
  6. What is the formula to calculate the CEWS for the specific qualifying period?

This section focuses on Steps 4 to 6

Periods 1 – 4: March 15 to July 4, 2020

Revenue Reduction

In order to qualify for the CEWS for periods 1 to 4, an eligible employer must show its qualifying revenue has dropped below a threshold:

  1. 85% of March 2019 revenue in March 2020 to be eligible for CEWS for the period 1;
  2. 70% of April 2019 revenue in April 2020 to be eligible for CEWS for the period 2;
  3. 70% of May 2019 revenue in May 2020 to be eligible for CEWS for the period 3;
  4. 70% of June 2019 revenue in June 2020 to be eligible for CEWS for period 4.

The revenue reduction is calculated by comparing the qualifying revenue in the current qualifying period to the appropriate prior reference period.

For these periods, the prior reference period is the respective 2019 month for each 2020 month (e.g. March 2019 for March 2020) or January to February 2020. If the employer elects to use January to February 2020 as its prior reference period, it should continue to use that as its prior reference period for the remaining periods in 1 to 4.

Finally, an eligible employer that qualifies for the CEWS for one qualifying period (1 to 4) will automatically be deemed to qualify for the next qualifying period (1 to 4). This deeming rule eliminates the retrospective uncertainty of the subsidy. For clarity, if the employer qualifies for the period 1, then they are deemed to qualify for the period 2. The “deeming” does not extend to the period 3 because the deeming rule can only apply to the next immediate period. This deeming rule for periods 1 to 4 apply even if there has not actually been a qualifying Revenue Reduction in the subsequent period. See here, under #5, Table 2, for a table that breaks this down.

Calculate CEWS Amount

For periods 1 to 4, the CEWS program will pay qualifying employers the greater of:

  1. 75% of an arm’s length employee’s “eligible remuneration” up to a weekly maximum of $847; or
  2. whichever is less:
    • 75% of any employee’s (including non-arm’s length) “baseline remuneration”; or
    • 100% of “eligible remuneration” up to a weekly maximum of $847.

The two “tests” in this CEWS calculation (for periods 1 – 4) mean that arm’s length employees can be hired or be given increased remuneration after March 15, 2020 provided their employer pays the final 25% of their remuneration. However, any employees hired before March 15, 2020, including non-arm’s length employees, can be paid 75% of their baseline remuneration meaning employers would not need to necessarily pay that final 25%.

Note, non-arm’s length employees hired after March 15, 2020 will not be eligible for the CEWS (because their “baseline remuneration” would be $0.00).

All amounts paid are adjusted for amounts received under the TWS program (see below) and work-share EI program.

Periods 5 – 13: July 5 to March 13, 2021

Revenue Reduction

For periods 5 to 13, there is no threshold that needs to be met. Instead, CEWS is calculated as a rate of the revenue reduction.

There are two “revenue reductions” that must be considered.

Base Revenue Reduction” means the percentage that its revenue in a qualifying period has been reduced compared to its prior reference period. If the Base Revenue Reduction in a period (5 to 13) is lower than the Base Revenue Reduction of the immediately preceding period, then it will adopt the Base Revenue Reduction of the immediately preceding period instead. In other words, use the higher amount as your Base Revenue Reduction.

For example, when calculating the Base Revenue Reduction for July 2020, you will calculate the Base Revenue Reduction for July 2020 (comparing it to the prior reference period selected for July 2020) and June 2020 (comparing it to the prior reference period selected for June 2020), then you take whichever is higher.

 “Top-up Revenue Reduction” means:

  • Period 5 to 7: The percentage that its average revenue from the prior 3 months (leading up to the qualifying period) has been reduced compared to those same 3 months in the prior year or compared to the period of January to February 2020.
  • Period 8 to 10: Either:
    • The percentage that its average revenue from the prior 3 months (leading up to the qualifying period) has been reduced compared to those same 3 months in the prior year or compared to the period of January to February 2020; or
    •  The Base Rate Reduction of that period. This is called the safe harbour rule for periods 8 to 10.
  • Periods 11 to 13: Equal to the Base Revenue Reduction.

For the prior reference period, you may change your election compared to the election made or not made for periods 1 to 4. In other words, for period 5 to 13, you can choose to compare the current revenue against its respective month(s) in the prior year (“general approach”) or compare it to the average revenue from January to February 2020 (“alternate approach”). However, which ever approach you choose must be applied to all of the remaining periods in 5 to 13.

Calculating CEWS Amount

The CEWS has 3 components:

  1. Base percentage, which relies on a Base Revenue Reduction;
  2. Top-up percentage, which relies on a Top-up Revenue Reduction;
  3. Pay for employees on leave with pay.

(All amounts paid are adjusted for amounts received from the EI work-share program)

Base percentage” is calculated by applying a multiplier to the Base Revenue Reduction for the period, up to a maximum percentage for each qualifying period. See chart below.

[Multiplier x Base Revenue Reduction] OR set maximum

Top-up percentage” is calculated by applying a multiplier to the top half of the Top-up Revenue Reduction of that qualifying period if it exceeds 50%, up to a maximum of percentage. If the Top-up Revenue Reduction is 50% or less, then the Top-up percentage is 0. See chart below.

[Multiplier x (Top-up Revenue Reduction - 50%)] OR set maximum



Base Percentage Multiplier

Base Percentage Maximum

Top-up Percentage Multiplier

Top-up Percentage Maximum















































If the eligible employee is active, then the CEWS for that employee is the least of:

  1. Eligible remuneration x (Base percentage + Top-up percentage);
  2. $1,129 x (Base percentage + Top-up percentage); and
  3. If the employee is non-arm’s length, the baseline remuneration.

Note, if the active eligible employee’s employer would otherwise been better off using the tests in period 1 to 4, then the employer can still use those tests to calculate CEWS in period 5 and 6. This has been referred in the media as the “safe harbour provision”. If the eligible employee is on leave with pay, then the CEWS for that employee for periods 5 to 6 will be calculated on the same basis as for period 1 to 4.

If the employee is on leave with pay for a particular week, then the CEWS for that week will be the lesser of:

  1. the eligible remuneration paid to the eligible employee that week;
  2. the greater of:
    • $500, and
    • 55% of the baseline remuneration for the employee, up to a maximum subsidy amount of:
      • $573 for periods 5 to 10;
      • $595 for periods 11 to 13.


How to get the CEWS

  • DEADLINE: January 31, 2021 or 6 months from the end of the qualifying period that you are claiming, whichever is later.
  • Applications are now live and can be done through My Business Account, Represent a Client or a web form. These can be found here. Employers will need to apply for each period.
  • Employers will need to keep records supporting their revenue calculations, remuneration paid to specific employees, and number of employees.
  • The CEWS is paid by the CRA treating the amount of the CEWS as an overpayment of income taxes. The CRA may refund that “overpayment”, but no interest will apply. Note, if an employer currently has outstanding amount payable to the CRA, the CRA could potentially use the CEWS to pay off that liability. This should not apply to deferred amounts but could apply to other amounts owed by the CRA.
  • Employers are encouraged to set up for direct deposits from the CRA. Otherwise, the payments will be by cheque.

Other important considerations of the CEWS

  • The CEWS is included in taxable income but will be offset by the associated deductible employment expenses.
  • Employers that engage in “artificial transactions” to reduce revenue for the purpose of claiming the CEWS or to increase their CEWS amounts may be subject to a penalty equal to 25% of the value of the subsidy claimed, in addition to the requirement to repay in full the subsidy that was improperly claimed.
  • Employers will also be able to apply for a 100% refund on the employer-portion of CPP and EI remittances for any furloughed employees (i.e. employees receiving their remuneration but not working) and for any eligible employees under CEWS program in periods where the CEWS may be claimed. Employers will still need to collect and remit the CPP and EI amounts but then can apply for a refund for the employer-portion when they apply for CEWS each period.
  • The government may publish the name of anyone who applies for the CEWS and has set up a database doing just that. See here.

Other notes

The government has provided a “calculator” to assist with calculating the eligible CEWS here.

  • For the Government website for CEWS, click here and for Frequently Asked Questions, click here.

The CEWS program and calculations are complex and will likely be subject to audit scrutiny by the CRA. As such, it is vitally important to maintain good records and, if needed, consult with an accountant or lawyer to understand whether your business qualifies.


The CRA has begun to audit CEWS claims. These audits are initiated by sending out an information request letter which requires the claimant to provide information such as:

  • corporate documents from the minute books, including agreements, shareholder registers, governance documents;
  • supporting documentation on 2019 and 2020 revenue and for the calculations for the decline in revenue;
  • payroll information.

The claimant will have 15-21 days to respond with the requested information. This is not a lot of time therefore it is more important than ever to ensure that claimants are maintaining organized, complete and thorough documentation as they go.


Temporary Wage Subsidy (“TWS”) – 10%

The TWS provided for a 10% TWS for eligible employers from March 18, 2020 to June 19, 2020 (eligible period), up to a maximum of $1,375 per employee with an aggregate maximum of $25,000 per eligible employer. Any benefit received from the TWS will reduce the CEWS for that period. Employers who do not qualify for the CEWS could apply for the TWS instead.

  • Eligible employers for the 10% wage subsidy are:
    • Individuals (other than trusts)
    • Non-profit organizations;
    • Registered charities;
    • Canadian-controlled private corporations eligible to claim any small business deduction; and
    • Partnerships, if the members of the partnership are comprised of individuals, registered charities, partnerships, or Canadian-controlled private corporations as described above.
  • Eligible employers must have an existing business number and payroll program account with the CRA on March 18, 2020 and must pay salary, wages, bonuses, or other remuneration to an eligible employee. Note, not-for-profits that share their business number and payroll account with a non-eligible employer (i.e. public institution) may not qualify. Unlike the CEWS, the government has not provided any relief for this.
  • The TWS is “paid” to employers by decreasing the amount that such employer needs to be remit in income tax withholdings. Employers cannot reduce their CPP and EI remittances (see CEWS – Other important considerations).
    • For example, if you have 3 employees and their total payroll (their remuneration) for the three-month period is $120,000 ($40,000 per month). The TWS maximum would be the lesser of $12,000 (10% x $120,000), $4,125 ($1,375 x 3 employees), and $25,000. The TWS maximum is therefore $4,125. To claim this you can reduce your income tax remittance by up to $4,000 (10% x $40,000) in the first month but then you would only be able to reduce the remittance by $125 in the second month and nothing in the third month (because your total limit for the three months is $4,125).
    • If your TWS exceeds the income tax remittance for that period (note EI and CPP remittances may not be reduced), then the excess can be carried over to periods after June 19, 2020.

As noted in the CEWS section, the stated goal of the government for these subsidies was to get funds out as quickly as possible – so they rely on businesses self-assessing whether they qualify. However, the government has indicated there will be harsh penalties for businesses that try to game the system and take advantage of the subsidies when they don’t qualify or use it for anything other than paying employees. At minimum, amounts claimed when an employer did not qualify will need to be repaid. In addition to the penalties described for CEWS, there would likely also be penalties applied in other circumstances where the CRA believes there was any abuse, especially where funds were never paid to the employees.

Therefore, it is critically important that employers maintain records showing revenue, the remuneration paid during the eligible periods, the income tax that was deducted from this remuneration, and the number of employees for which either subsidies applied. This will likely be crucial to protecting yourself from future audit grief.

The CRA has provided a self-identification form to report the TWS amounts. Employers using this program should reduce their remittances and send this form to the CRA (they may send this form at the end of the eligible period). See here for the form.

Information on the 10% Temporary Wage Subsidy can be found on the CRA website here.


Canada Emergency Rent Subsidy (“CERS”)

Over 2020, both the federal and Alberta government announced various commercial rent relief programs. Alberta’s rent deferral legislation (Commercial Tenancies Protections Act) and the federal forgivable loan program (Canada Emergency Commercial Rent Assistance (CECRA)), have now both expired.


Canadian businesses, non-for-profits or charities who have experienced a decrease in revenue due to the COVID-19 pandemic may be eligible for the CERS for rent or property expenses from September 27, 2020 to June 2021. To be eligible, all of the following requirements must be met:

  1. Be an eligible applicant, which includes individuals, corporations not-for-profits, partnerships, and others;
  2. Had:
    1. a CRA business number on September 27, 2020, or
    2. a CRA payroll account on March 15, 2020 (or another person/partnership had one and remitted on the applicant’s behalf), or
    3. purchased business assets from a person or partnership who meet a. or b. above[6];
  3. Applicant suffered a revenue reduction compared to a previous period;
  4. Applicant has a qualified property and eligible expenses.

The CERS is similar to the CEWS, where there is a rate determined by the amount of revenue reduction and it is applied against eligible expenses.

Determining Base Rate and Top-up Rate

Like the CEWS, you must calculate the revenue reduction as a percentage by comparing the current month to a prior period (either the same month in the prior year or January to February 2020).

Base Rate[7]

The base subsidy rate is then multiplied against the eligible expenses (see below).

Top-up Rate

Those who were required to close due to a public health restriction are eligible for a “top-up rate” as well (lockdown support).

To qualify for the top-up rate, the applicant must:

  1. Have a base rate greater than 0%;
  2. Have had one or more locations temporarily closed, or have activities significantly restricted for a week or longer due to a COVID-19 related public health order.[8] (Note, orders that reduce service hours do not qualify for lockdown support)

There is a maximum CERS amount of $75,000 per location and $300,000 for all locations (affiliated applicants are treated as a group and share the maximum amount).[9]

Eligible Expenses

The applicant must rent or own a building or land that it uses in the ordinary course of its business and it is the eligible expenses flowing from that rental or ownership that are considered. To be an eligible expense, it must be:

  1. paid or payable to an arm’s length party;
  2. an expense within the claim period; and
  3. paid or payable pursuant to a written agreement in place before October 9, 2020 (renewals on the same terms will also qualify).

Any amount not yet paid must be paid within 60 days of receiving the CERS. Applicants will be required to attest to that.


Availability of credit for Canadian businesses:

  • An increase to the credit available to small, medium, and large Canadian businesses through the Business Credit Availability Program (BCAP), which will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses.

   For information from BDC click here.
   For information from EDC click here.

  • The EDC will be guaranteeing new operating credit and cash flow term loans that financial institutions extend to small and medium enterprises. The guarantee is limited to $6.25 million.
  • The BDC will be co-lending term loans with financial institutions for small and medium enterprises. These are intended to assist with operational cash flow. The BDC’s portion of the loan will be up to $6.25 million per loan. Interest rates will be normal commercial interest rates.
  • To further encourage banks to make loans, the Office of the Superintendent of Financial Institutions (OSFI) announced it is lowering the Domestic Stability Buffer by 1.25% of risk-weighted assets, effective immediately. This will allow Canada’s large banks to inject $300 billion of additional lending into the economy.
  • The Bank of Canada has cut its interest rate to 0.25%.
  • The Canada Emergency Business Account has now closed (December 31, 2020). It was a loan made available through eligible financial institutions (with cooperation of EDC). It provided a loan for $60,000, interest-free, to qualifying businesses and not-for-profits.
    • There were 2 streams in which an applicant could apply, the Payroll Stream and the Non-deferrable Expenses Stream.
    • If the borrower repays the balance on or before December 31, 2022, 33% of the loan will be forgiven (up to $20,000).
    • Any balance not repaid will be converted to an interest-bearing term loan after December 31, 2022.
    • The loan may only be used for operating costs. See here for more details on eligible and ineligible uses of funds.
  • All of these loans are now accessed through your own financial institutions. You will therefore need to contact your normal bank to see if you qualify. Note, however, as each bank is administering these programs to their own customers, how the programs will work, including specific terms and especially practical questions regarding how to apply may vary between banks.

For more information See for example: 

  National Bank of Canada


Loan Deferrals:

  • The Department of Finance Canada indicated Canada’s large banks have confirmed that this support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products. It is unclear if you had not applied for a deferral during 2020, whether you can apply for one now. This likely requires a conversation with your specific bank.
  • During the deferred period, most (if not all) banks will continue to charge interest which will compound if no payments are made. As a result, not only will individuals and businesses who take advantage of this option still owe all the deferred payments, they will likely owe more.
  • If you are in a cash crunch, you may still need to take advantage of these options, but you likely want to do it as little as possible.

You will need to contact the individual financial institutions.  


Other relief

The Federal government has also provided funding to various industries and sectors, such as the media industry, the cultural, heritage and sports industries, agriculture, and women entrepreneurs. To review support for all the various sectors, see here.

There is also additional funding for large employers via the Large Employer Emergency Funding. See here.

For those who did not qualify for the CEBA, the Regional Recovery and Relief Fund offers loans as well. See here for the link to the Western Canada RRRF.

If you have any questions in the interim regarding these measures, please reach out to MaryAnne LoneyMichelle Fong, Mohamed Denny, Pat Haughian, or Dani Fialkov.


[1] If the employee was on leave between July 1, 2019 and March 15, 2020, then use the 90 days immediately before the leave for the baseline.

[2] CEWS Frequently Asked Questions, Q 13. <>

[3] From Fall Economic Statement. These are proposed and have not been formalized into the Income Tax Regulations yet.

[4] CRA Interpretation 2020-0846711I7.

[5] See subsections 125.7(4) – (4.2) for Computation of Revenue.

[6] Must make joint election.

[7] From Canada Emergency Rent Subsidy website. <>

[8] See “Lockdown support eligibility criteria” at this link for specific requirements for the public health order. <>

[9] The $75,000 maximum applies to both base and top-up rates. The $300,000 maximum only applies to the base rate.

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