Bill C-13 is currently making its way through the Senate as I write this. I have taken an opportunity to review the bill as passed by the House of Commons and this is my summary. If there are any changes to the Bill or additional information becomes available, this post will be updated to reflect the changes.
Here we go!
GST/HST Credit
The one time additional HST payment will be provided in May and C-13 outlines a formula as to how the payment will be calculated. The formula looks like something from middle school algebra class:
0.5(A-B)
From there, A is a defined as a series of items related to your household and you add these figures up. My example is for a family unit of 4, two parents and two kids living under the same roof. Dad is allocated $580, Mum is allocated $580 and the two kiddos are each allocated $306, so A in my example equals $1,772. B is a calculation which effectively reduces the figure in the brackets based on the family unit’s income level. The threshold is $37,789. Any income in excess of $37,789, the calculation takes 5% of that to provide you with a number for B. So, this family makes a household income of $60,000, so B is equal to 5% of $60,000 less the $37,789, which equals $1,110.55. (Check my math because I am an Accountant!). Therefore under this example, the Family will receive $330.50 for the additional HST credit. 0.5($1,772 – $1,110.55).
Therefore, if a couple, the combined household income of $73,230 or more means that the household is not eligible for the credit.
Child Care Benefit
The temporary additional payment under the Child Care Benefit seems very straight forward. For every eligible child under the program, the parent would receive $300 per child in the month of May.
RIF Withdrawals
Folks who are living on their Retired Income Funds, are getting a bit of help where the stock market volatility has been so common in the past few weeks. Under this bill, the minimum withdrawals required for a RIF are being reduced by 25% for 2020. What does this mean? An individual does not have to take as much money out of their RIF, so that the RIF can recover its losses in the Market.
Almost forgot! Folks, with Student Loans are getting a break from interest and principal payments are not required between March 30 to September 30, 2020 on eligible student loans.
Now for the two big ones under this Bill! First is the Emergency Care Benefit!
Emergency Care Benefit Program
I have been waiting to dig into how this is going to work, because this could be a life line to so many workers and small business owners.
Eligibility
Under the bill, a “worker” is defined as: “means a person who is at least 15 years of age, who is resident in Canada and who, for 2019 or in the 12 month period preceding the day on which they make an application under section 5, has a total income of at least $5,000 – or, if another amount is fixed by regulation, of at least that amount – from the following sources:
- a) employment;
- b) self employment;
- c) EI benefits;
- d) moneys received under a provincial plan because of pregnancy and adoptions.”
So it appears that if you were an employee or a small business owner and you made at least $5,000, you are over the first hump in the process.
Second eligibility test is an income test and it goes like this:
“A worker is eligible for an income support payment if:
- a) the worker, whether employed or self employed, ceases working for the reasons related to COVID-19 for at least 14 consecutive days within the four week period in respect of which they apply for payment;
- b) they do not receive, in respect of the consecutive days on which they have ceased working,
- i) subject to the regulations, income from employment or self employment;
- ii) benefits, as defined in subsection 2(1) of the Employment Insurance At,
- iii) allowances, money or other benefits paid to the workers uner a provincial plan because of pregnany or in respect of the care by the worker of one or more of their new born children or one or more children placed with them for the purposes of adoption;
- iv) any other income that is prescribed by regulation.
So eligibility test #2, the worker, who is either been employed or self employed, has to be out of work for at least 14 consecutive days within a 4 week period and during that time, have not received income from employment or self employment, EI benefits, maternity benefits or any other form of income prescribed by regulation. (At this point, I am seeking clarity on the other form of income).
The 4 week period has begun as of March 15, 2020. So a worker would become eligible under this program by March 29 if in the past 14 days, they have not received any money. The application process for this program as outlined by the Prime Minister on TV earlier today is being aimed to launch on April 6th with funds being deposited “days” after this.
Still aren’t sure if you qualify? Shoot me an email at jrideout@anraccountants.com and we can talk it out.
Wage Subsidy Program for Small Businesses
This is the second large piece of the bill that I wanted to touch on. The Wage Subsidy Program will help those businesses that continue to operate during this chaotic time. Under this Bill, an eligible employer is a person or partnership that employs one or more eligible employees (eligible employees are defined as an individual who is employed in Canada) and has on March 18, 2020 a business number in respect of which the person or partnership is registered with the Minister to make remittances required under this Section.
The Bill further states that a Canadian Controlled private corporation qualifies, an individual, a partnership, a registered charity and non profit organizations. So if you are a sole properitor to a small business corporation to a charity organization, then you could be eligible for this program.
So what does the Program offer? It provides a 10% Wage subsidy during the eligible period of March 18, 2020 to June 19, 2020. The calculation of the Subsidy is based on eligible payroll during this period and will be recovered via a reduction in the payroll remittance for the period. Based on the Bill, a business’ payroll remittance period would determine when to file, so it would depend if you are a monthly or quarterly payroll remitter.
Phew. That is a ton of information and I am sure there is more to come. At this point, there is a clear perspective on what the Economic Response Plan is shaping up to be, and individuals and business owners alike can start to make some plans. As well, don’t forget the the Province of New Brunswick has a program rolling out to help bridge the Economic Response Plan.
As always, feel free to reach out to the ANR team if you have questions. As well, during this time, do not be afraid to reach out to you elected officials for information or to provide recommendations and comments, as it can help build plans like this one.
Here is the link to Bill C-13: https://www.parl.ca/DocumentViewer/en/43-1/bill/C-13/third-reading
Until next time,
Jason
Disclaimer: The contents above represents the interpretation of the Bill C-13 as at the point it was Passed by the House of Commons on March 24, 2020. The contents of Bill C-13 are not official until it receives Royal Assent. Opinions expressed in this post are based on interpretation made on Bill C-13 as of March 24, 2020. We warrant that this blog is not intended to provide specific advice and should not be represented as advice. ANR recommends contacting your Professional Services provider in order to determine how these programs could be applicable to your own situation. This blog post is for information purposes only.