Canada Emergency Programs Extended into 2021 and Important Tax Info

Recently, the federal government announced an extension to some key stimulus programs aimed at keeping businesses afloat during the COVID-19 pandemic. Additionally, it clarified that Canadians who receive the new Canada Recovery Benefits may have some of the funds clawed back, depending on their net income for 2020.

  1. Canada Emergency Wage Subsidy (CEWS) – CEWS will continue until March 13, 2021 to help employers who have experienced a downturn in business during the pandemic continue to pay their employees.
  2. Canada Emergency Business Account (CEBA) – The CEBA business loan program now allows qualifying businesses to borrow up to $60,000 with a forgivable amount of up to $20,000. The application deadline for a loan through CEBA has now been extended to March 31, 2021.
  3. Canada Emergency Rent Subsidy (CERS) – CERS covers up to 65% of businesses’ eligible expenses, such as commercial rent, property taxes, and property insurance, based on a sliding scale. For those who are locked down, an additional 25% may be available. CERS covers expenses not surpassing $75,000 per location and no more than $300,000 in total for businesses with multiple locations. This program is available until March 13, 2021.
  4. Highly Affected Sectors Credit Availability Program (HASCAP) – HASCAP has been created to support heavily impacted sectors like tourism and hospitality, which struggle to access necessary financing. The federal government will work with banks to provide hard-hit businesses in these sectors with loans featuring attractive terms.
  5. New Canada Recovery Benefits – The new benefits brought in when Canada’s Employment Insurance (EI) program was enhanced this fall apply to those who are not eligible for EI. This includes the Canada Recovery Benefit of $500/week for up to 26 weeks for those who aren’t working or whose income has dropped by 50% or more. The Canada Recovery Sickness Benefit provides $500/week for up to two weeks to those who cannot work due to illness or self-isolation requirements. The Canada Recovery Caregiving Benefit provides $500/week for up to 26 weeks per household to families who need to stay home to look after a young child and cannot work for at least half the week or need to stay home to look after a sick family member or someone in quarantine.

One thing to keep in mind about the new Canada Recovery Benefits is that these funds can be clawed back in cases where recipients have a net income of $38,000 or more. Your net income would include any employment earnings, as well as funds received through the Canada Emergency Response Benefit (CERB) and Canada Recovery Benefits. This Q&A may be helpful in answering some of your questions.

“If you have received these benefits and your income is close to or over $38,000, speak with us about the taxation implications, since some people could be required to pay back the entire amount received through the Canada Response Benefit,” said Sharlane Bailey, owner of Canwest Accounting. “Also, anyone who received the CERB, but didn’t meet the criteria is asked to pay back the money by December 31, which means they won’t need to claim it as income on their 2020 income tax return.”

To have the exceptional team at Canwest Accounting save you time and money by answering your questions, doing your bookkeeping, completing and filing forms for subsidy programs, or preparing your tax return, call or email us. Our offices in Victoria and Langford are still closed to the public to keep everyone safe during the COVID-19 pandemic, but we have a pickup and drop off service that is very convenient.


The suggestions and advice provided by Canwest Accounting should not be relied upon in place of professional advice. You are responsible for checking the accuracy of relevant facts and opinions provided.

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