Tag COVID-19

Supplemental Unemployment Benefits (SUB)

With the outbreak of COVID-19, many businesses and employees are facing an uncertain future. Fortunately, the Canadian government has announced a multi-billion dollar relief package that will enable Canadians to provide for themselves and/or keep their businesses going. One of the options available to Canadian businesses through the relief package is the Supplemental Unemployment Benefits (SUB).

Employers may want to consider a SUB plan, which will supplement the wages of their employees during a period of unemployment due quarantine/self-isolation, a pause in work or training, illness or injury. Any payments made from SUB plans that have been registered with Service Canada are not considered as earnings and, therefore, will not be deducted from EI benefits.

Establishing a SUB Plan

To set up a SUB Plan to supplement EI benefits for sick leave or layoffs, please follow the following guidelines:

1) PREPARE YOUR PLAN

An example of a SUB Plan, prepared by Service Canada, is available here. The employer may select a group of employees to be covered by the plan, as long as the group does not:
  • Violate any human rights legislation;
  • Violate any existing collective agreement provisions (if any) or;
  • identify individuals by name.
    • Employees must be identified by their location, job role, etc.
The total amount of the SUB plan payment and EI benefits must not exceed 95% of the employee’s total weekly earnings.

2) REGISTER YOUR PLAN

Every employer must submit their registration package to Service Canada, located at:

Service Canada- Supplemental Unemployment Benefit (SUB) Program
120 Harbourview Boulevard
P.O Box 11,000
Bathurst, New Brunswick E2A 4T5
Telephone: 1-800-561-7923
Fax: (506) 548-7473
Email: sub-psc@servicecanada.gc.ca
The package must include:
  • A copy of the proposed SUB plan;
  • The SUB Plan registration form;
  • A copy of the current collective agreement(s), should the SUB Plan cover any unionized employee(s),;
  • A copy of the company’s insurance policy;
  • A copy of the Trust Agreement, if applicable;
  • Any company policies or guidelines containing information about the plan, and;
  • Any declarations or documents employees must sign in order to receive their SUB payment.
There is currently no guaranteed time frame from Service Canada on how long it will take to approve your plan, especially considering how inundated government services are during this time. Still, the sooner you prepare your plan, the sooner It will be processed.

Note, if you pay out any amount before the plan’s registration, those amounts are likely to be recuperated by EI. There is no word yet as to whether this may change to allow employers to pay their staff ahead of their plans approval. So until further notice, anticipate that you may need to pay back those amounts into EI.

Employers can also submit their plan for registration with Revenue Canada, which will exempt payments from being considered income from their employment. In order to submit your plan to Revenue Canada, please have your employer follow the directs provided here.

Make Sure Employees Take The Proper Steps To Access Their Plan

A SUB plan should not be used by a business that intends to permanently close but, rather, for employees who find themselves temporarily out of work. The employer should reasonably predict a date that they can expect to return to normal work and provide that date to EI as proof that the work suspension is temporary. There is, of course, some flexibility to this date as it is understood that times are uncertain and no definitive answer can be given at this time.

Employers should assist their employees with apply for a SUB plan. They should also note that employees must apply for and have received EI benefits before the SUB plan will come into effect. If the employee has not received benefits, they may still be allowed to access the SUB plan payments if they are within a one-week waiting period of receiving benefits, have less than the required amount of insurable hours of employment to qualify for EI, or if they have maxed out their EI entitlements.

In creating your SUB Plan, it should indicate:
  • A start and end date. The SUB Plan must be in place for a minimum of one year and no more than five years.  If the plan is included as part of a collective agreement, then it will be valid until the expiry of that collective agreement.
  • Identify which group of employees will be covered by the SUB Plan (I.E. every employee, full-time employees, etc.). This may include other requirements, such as minimum length of employment for eligibility.
  • Which benefits will be supplemented by the SUB Plan (regular benefits, and/or sickness benefits).
  • Whether the employer will check and verify that an employee has applied for and has received EI benefits before the SUB payments are paid
  • The total amount of the SUB payment
  • Whether employees will be paid for the one-week waiting period.
  • How long EI benefits will be topped up under the SUB Plan.
  • That a written notice of any changes will be submitted to Service Canada within 30 days of the effective date. This included changes to the name of the administrator or contact person.
  • How the SUB Plan will be financed, as there are three possible ways to finance a SUB Plan, listed below. Please not that the employer must maintain a record of all SUB payments.
    • by payments from the company’s general revenue
    • by making deposits into a trust fund established to provide the SUB Plan payments
    • by paying 100% of the insurance premiums that are required to finance the SUB payments.
  • Any and all guaranteed annual remuneration, deferred remuneration or severance pay owed to an employee will not be reduced or increased by payments made under the SUB Plan.
  • If the employer wishes, the SUB Plan may provide for an offset of EI benefits that might have to be repaid as part of the employee’s personal income tax return. The gross weekly EI benefits from employment with the company, the SUB Plan payment previously paid, plus the offset amount must not exceed 95% of the employee’s usual weekly earnings.
  • Upon termination of the SUB Plan, all remaining assets will revert to the employer, be used for SUB payments and/or be used for administrative costs of the SUB Plan.
  • An employee does not have a right to any SUB payments outside of the period of employment specified in the SUB Plan.
  • Any other conditions an employer may wish to impose (I.E. minimum length of employment before eligible, requirement to return to work for a specified time following receipt of benefits, etc.)

Before enlisting n the SUB Payment Plan, please read over the requirements for registration here.

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2019 Tax Year Filing Deadlines

Individual Deadlines

  • Filing for the 2019 tax year: June 1, 2020
  • Payment for the 2019 tax year: September 1, 2020

Self-Employed and their spouse or common-law partner

  • Filing for the 2019 tax year: June 15, 2020
  • Payment for the 2019 tax year: September 1, 2020
    • Includes the June 15, 2020 instalment payments for those who have to pay by instalments

Corporations

  • Filing for the current tax year: June 1, 2020
    • Applies to corporations that would otherwise have a filing due date after March 18 and before June 1, 2020
  • Payment for current tax year: September 1, 2020
    • Applies to balances and instalments under Part 1 of the Income Tax Act due on or after March 18 and before September 1, 2020

Trusts

  • Filing date for current tax year (including the associated T3 information return)
    • May 1, 2020 – applies to trusts with a tax year end date of December 31, 2019
    • June 1, 2020 -applies to trusts that would otherwise have a filing due date in April or May
  • Payment date for current tax year: September 1, 2020
    • Applies to income tax balances and instalments due on or after March 18 and before September 1, 2020

Charities

  • Filing date: December 31, 2020
    • Applies to charities with Form T3010 due between March 18, 2020 and December 31, 2020
  • Payment date: N/

Part XIII Non-Resident Tax

  • Filing date for the 2019 NR4 information return: May 1, 2020
  • Payment date: The 15th of each month following an amount paid or credited by residents of Canada to non-resident persons

Payroll Remittances

Information Returns

  • Filing date for the 2019 T5013 Partnership Information Return: May 1, 2020
  • Filing date for the 2019 NR4, Statement of Amounts Paid or Credited to Non-Residents of Canada information return: May 1, 2020
  • Other information returns: June 1, 2020
    • Applies to other information returns that would otherwise be due after March 18, 2020, and before June 2020
Note: we will continue to follow announcements from the government and Canada Revenue Agency (CRA) regarding deadline alterations, should there be any more changes. We will update this post if anything changes.

For now, this post is accurate as of March 31, 2020.

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Work-Sharing Program Info

Work-Sharing (WS) is an adjustment program offered by the Canadian federal government. The goal of the program is to help employers avoid laying off their employees when an unforeseen circumstance, outside of the employer’s control, bring a temporary halt or reduction to work. The WS helps to provide income assistance to employees eligible for Employment Insurance (EI) benefits for the duration of the reduced work period until the employer is able to recover and resume their business as usual.

Essentially, the WS exists as a three-way agreement between the employer, employees and Service Canada. The employees under the plan must work a reduced schedule and even split the available work over a specific period of time until the business is viable enough to continue normal operations.

For more information on the program and/or to register, please use one of the links below.

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Announcement: HST Payments

The Minister of National Revenue has made an announcement regarding HST Payments. They are extended to June 30, 2020.

The Minister of National Revenue will extend until June 30, 2020, the time that:
  • Monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods;
  • Quarterly filers have to remit amounts collected for the January 1, 2020 through March 31, 2020 reporting period; and
  • Annual filers, whose GST/HST return or instalment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.
There are currently no deferral of REPORTING. These must still be filed on time.

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Canada Emergency Response Benefit

The Canadian government has proposed legislation to establish the Canada Emergency Response Benefit (CERB). This new measure is a taxable benefit that could provide $2,000 a month, up to four months, for workers who have lost income as a result of COVID-19. The CERB is intended to be a more efficient combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

The CERB will cover Canadians who have lost their job, are sick, quarantined, and/or taking care of someone who is sick with COVID-19. It will also apply to working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. The CERB will apply to wage earners, contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).

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