EI, CEBA or CERB? How to navigate COVID-19 aid

What exactly are they, and are you eligible?

EI, CEBA or CERB? How to navigate COVID-19 aid

Over the last few weeks, the Canadian government has rolled out various financial aid schemes to help individuals and businesses during these tough times. Whilst there is more and more help available, it can be a little hard to navigate. Prime Minister Trudeau additionally announced this week that the government is looking to add more benefits programs to this roster, to cover those who don’t yet qualify for any of these schemes, such as students or non-traditional workers.

Employment Insurance (EI)

EI benefits are not tied to COVID-19 and are a regular scheme provided by Canadian services. Nevertheless, due to the current situation there has been a rise in demand for EI from workers who have been laid off due to the pandemic.

To be entitled to EI benefits, you must be a Canadian resident and have lost employment through no fault of your own (employer terminated contract not as a result of misconduct, you left employment for reasons that are justified, e.g. harassment, discrimination, dangerous working conditions). You will need to have accumulated between 420 and 700 hours of insurable employment during the qualifying period to be entitled to EI benefits, which is roughly 52 weeks before the start of your claim. The specific number of hours required depends on your place of residence and the unemployment rate for your region (700 hours are required for regions with an unemployment rate of 6% or less, 420 hours for regions with a rate of 13.1% or more).

By and large, EI benefits are equivalent to 55% of your average insurable weekly earnings. The maximum yearly insurance earnings amount is $54,200 (which amounts to $573 per week).

Whilst you are receiving these benefits, you must complete regular reports to show that you continue to be eligible for EI – these reports can be submitted online. You can apply for EI as soon as you stop working, even if you have yet to receive your Record of Employment (ROE). However, you must file your benefits claim not more than four weeks after your last day of work as you could lose benefits.

Yesterday, the federal government announced that those whose employment insurance benefits had recently run out could qualify for CERB.

Canada Emergency Response Benefit (CERB)

CERB was introduced at the end of March and is aimed at supporting self-employed individuals; it will provide a taxable benefit of up to $2000 a month (or $500 a week) for up to four months to eligible workers who have lost their income due to COVID-19.

These benefits are available to those who meet the following criteria: Canadian residents, who are at least 15 years of age; who have stopped working due to COVID-19 (i.e. not voluntarily quit their job or are eligible for regular EI benefits or sickness benefits); who are or expect to be without employment or self-employment income for 14 consecutive days in the initial four-week period. This also means those who expect to have no income for subsequent benefit periods.

Initially, CERB was available to those who have had an income of at least $5,000 in 2019, or in the last 12 months prior to application; however yesterday the government announced that people who are making up to $1,000 a month will now also qualify for CERB.

You can apply online through Service Canada or the Canada Revenue Agency (CRA). The government asks that you do not apply for CERB if you have already applied for EI.

Qualifying documents will not be asked for initially as the government aims for CERB to be quickly available, though the government will review applications in due course in upcoming weeks or at tax time next year.

In Quebec, this is the Prestation canadienne d’urgence (PCU).

Canada Emergency Business Accounts (CEBA)

As opposed to the previous two, CEBA are loans which are specifically aimed at helping out Canadian businesses. The Canadian government has currently invested $25 billion in this program, which opened on April 9. It provides loans of up to $40,000 that will be interest-free until Dec. 31, 2022. Notably, up to 25 per cent of each loan (a maximum of $10,000) is eligible for forgiveness if the rest is paid back on time. Alternatively, if that is not possible, the loan can be converted into a three-year term loan (with an interest rate of around five per cent).

Businesses that qualify for the loan need to apply for it through their primary bank or financial institution (some of whom require an online banking set-up). To qualify, a business has to have federal tax registration and show a 2019 payroll of between $50,000 and $1 million.

Whilst it is a start, many businesses are currently excluded from applying for CEBA, says the Canadian Federation of Independent Businesses (CFIB). This includes businesses that are too small, too large or simply don’t have a payroll. Amongst other things, the CFIB is calling for the government to remove the payroll eligibility for the loan, or that it be dropped to $10,000 to meet the demands of smaller businesses.

In Quebec, this is the Compte d’urgence pour les entreprises canadiennes.