Help! Which Government Programs Are Right For My Business?

Disclaimer:  This document has been created based on professional experience by Envol Strategies and should NOT be considered as legal advice. 

 It is undeniable: COVID-19 has disrupted life as we know it. The novel coronavirus has, ironically, caused novel situations for leaders to navigate.  First and foremost, we want you to know that you are not alone.  

To help you make the best decisions for you and your team during unprecedented times, ask yourself:  

“What kind of employer do I want to be?” 

 “How do I want to show up for my employees? My partners? My clients? My community?” 

“What eligibility criteria does my business meet?”

Allow your answers to these questions guide your actions.  

Consider Air Canada’s recent decision to re-hire 16,500 workers. They did not do this because they had to, rather, because it showed employees they cared. Wesley Lesoky, Head of the Air Canada Component of the Canadian Union of Public Employees (CUPE) stated, “workers were due for a little bit of good news.”  

While most employees will continue to stay at home, Air Canada decided to retain as many of their employees as possible during the COVID crisis. That type of action makes a statement!  Although you may think this is only applicable for giant entities like Air Canada, there is a lot of support available for Canadian small and medium-sized businesses as well. 

Before making layoff decisions, consider these options and how they might align with the type of employer you want to be. Plus, consider your options in context of the government support being offered to Canadian employers. This blog post covers 4 support programs launched by the Canadian government in response to COVID-19:

1. Canada Emergency Wage Subsidy
2. Temporary Wage Subsidy
3. Work-Sharing Program
4. Canada Emergency Business Account

1. Canada Emergency 75% Wage Subsidy 

For starters, the Government of Canada recently announced the Canada Emergency Wage Subsidy (CEWS) (link here). Simply put, this program provides a 75% wage subsidy, encouraging employers to consider re-hiring workers that were laid off, and to prevent further job losses as a result of COVID-19. For details on eligibility, a full overview of the program, and other important information check out our Canada Emergency Wage Subsidy blog post here.  

Our 2-cents:  

1. Paying the additional 25% top up wages is optional, but highly encouraged for employers who can.  
   • Thinking, “what kind of employer do I want to be?” will help with this decision.  
   • Transparent communication is the key here; if you can’t afford to pay the additional 25% right now, let your workers know. Provide realistic, measurable and objective business milestones (eg. revenue targets) for when things may change.
2. Think strategically. Your organization has changed and will continue to change. Ask yourself:  
   • “Who is the best person to have on-board in our ‘new normal’?” 
   • Who embodies agility in my organization? 

2. Temporary 10% Wage Subsidy 

Wait, there’s more! The 10% Temporary Wage Subsidy (link here) is another helpful alternative to laying off your employees.  This eligibility criteria is easier to meet than CEWS. If you have already applied for the 10% subsidy, you can still apply for CEWS.

There is no application necessary; you simply deduct the amount from payroll taxes owing, making this a quick way to manage cash out and boost your financial position. You can find a summary of all the information you need to know on our COVID-19 Hub.  

 

Our 2-cents:  

1. Although 10% is certainly something, it can get spent really quickly. You may need to consider additional government support to get through this crisis. 
2. You can use the Temporary Wage Subsidy and the CEWS. Contact our team to learn more!

3. Work-Sharing Program 

You’ve got your employees (back) on payroll, now what?!  

The Government of Canada created a program back in 2010 for employers and workers to avoid temporary layoffs during times of uncontrollable reduced business activity. This program is known as the Work-Sharing Program (click here for the full details). It has been updated since COVID-19 to better help businesses maintain income despite reduced workload.  

We know that work-sharing is new for many of us! To find everything you need, click here to download our COVID-19 Work-Sharing Overview.

 

Our 2-Cents:  

1. Evaluate which roles are “vital” vs “less essential”.
2. Consider how you will communicate work-sharing decisions to your employees.  
3. Be transparent about why you made these decisions to help mitigate negative feelings of those laid off.  
4. Think ahead to how these changes might affect your team dynamics.

4. $40K Canada Emergency Business Account (CEBA) 

This is another great option for start-ups, small businesses, and non-profits. The criteria recently expanded, so, even if you did partial payroll, you might be able to tap into this program now!  The CEBA works similarly to a rotating line of credit, allowing you to use it when you need it. Loans are interest-free for a period of 1-year. 

 

Our 2-cents:  

1. Last week, over 70 thousand applications had been received for this program. So, you might be waiting for a while before you get paid. If you need fast money, don’t expect to get it from this program.  
2. There is potential for up to $10,000 in loan forgiveness (25%) if the balance is repaid in full by December 31, 2022. With an interest-free first year, this essentially means free money for businesses who apply and can pay back within this timeframe.
3. Navigate to your primary financial institution’s website to apply. However, while these institutions are hosting the application site, they are not responsible for granting exceptions or taking applications directly.

 

Things are changing quickly! Always, always go directly to the source (in many cases the Government website) for the most current information about each program. OR you can get in touch with our team of experts – we’re here to help. Remember, navigating challenging times can often be an opportunity to define the kind of employer you want to be. 

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For more information or one-on-one support, book a FREE 15-minute consultation with our team of HR specialists. 

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