Help is on the Horizon – Changes to EI Benefits, Introduction of the Emergency Care Benefit, and Support for Small Businesses in Response to COVID-19
Note: This information is current as of March 18, 2020 at 4:00 pm. We will highlight any updates as time permits.
Update: On March 25, 2020, in an emergency session of parliament, the federal government passed Bill C-13,the COVID-19 Emergency Response Act. The Act introduces the income support benefits for workers announced by Prime Minister Trudeau on March 18th, and provides a job-protected COVID-19 Leave of Absence for employees of federally-regulated businesses.
The terms of Bill C-13 are available here, and our March 26th blog summarizes the details.
Changes to the work environment in Ontario and across the country are being announced daily, if not hourly. Many are aware of measures already in place or introduced by the various public and government authorities for employers, employees and the economy. On March 17th, 2020, in response to increasing demand, the federal government announced further measures and support available to workers and employers as part of its COVID-19 Economic Response Plan.
Amendments to EI Sickness Benefits
The federal government previously announced the waiver of the one-week waiting period for EI sickness benefits, which are available to certain eligible workers. Unfortunately, these benefits have not, to date, been available to all individuals whose employment and ability to work have been impacted by COVID-19.
Introduction of the Emergency Care Benefit
To provide assistance to these individuals, the federal government has introduced the Emergency Care Benefit (the “ECB”), which is akin to EI sickness benefits or caregiver benefits, but specifically relates to those coping with COVID-19.
The ECB will provide those individuals and workers who are unable to work as a result of COVID-19 and do not have paid sick leave or benefits available to them through an employer, with income support up to $900 every two weeks for a period of up to 15 weeks. (By comparison, EI regular benefits provide for up to $573 per week or $1,146 every two weeks.)
To be eligible for the ECB, individuals are not required to provide medical documentation, but need only attest to the fact that they meet one of the following eligibility requirements:
They are sick or quarantined with COVID-19 and they are not eligible for EI sickness benefits;
They are taking care of a family member who is sick with COVID-19 and are they are not eligible for EI sickness benefits; or
They are a parent with children who require care or supervision due to school closures, and are unable to earn employment income, regardless of whether they are eligible for EI sickness benefits or not.
The ECB will be available beginning in early April. Canadians can apply for these benefits online through their CRA My Account or My Service Canada Account and receive payment via direct deposit. In the alternative, there is a toll-free telephone number to complete an automated application.
Amendments to EI Wage Replacement Benefits via the Emergency Support Benefit
For those individuals whose hours are reduced or who lose their job due to business closures related to COVID-19; or who are self-employed and are required to cease operations due to COVID-19, but do not qualify for EI, the federal government has set aside $5 billion for the Emergency Support Benefit.
The Emergency Support Benefit will provide up to 14 weeks of income support, at a comparable level to the EI program. No details have been provided regarding the amount of benefits that may be available to individuals. As with the ECB, applications for this benefit will be available beginning in early April.
Support for Small Businesses
(a) Temporary Wage Subsidy
Small businesses and organizations have been strongly impacted by the recommended and mandated restrictions imposed in response to COVID-19, particularly in the retail and food services industry.
The federal government will now offer help to these businesses by means of a temporary wage subsidy equal to 10% of salaries paid to employees for a period of 3 months, up to a maximum of $1,375 per employee and $25,000 per business, to encourage employers to continue to pay employees and curtail layoffs and terminations. This relief is available effective immediately to:
eligible small businesses;
corporations eligible for the small business deduction; and
non-profit and charitable organizations,
through reduced remittances of income tax withheld on their employees’ compensation.
(b) Business Credit Availability Program
In addition, the Business Credit Availability Program provides for an additional $10 billion to be available to the Business Development Bank of Canada and Export Development Canada so that they may extend credit support to small and medium-sized businesses to help them weather the COVID-19 storm.
PH Tips
These new measures announced this morning are in addition to those announced over the course of the last week by the federal and provincial governments. The availability of these benefits through Service Canada do not relieve employers from compliance with their contractual and legal obligations, including relating to constructive dismissal, accommodation obligations under the Human Rights Code, workplace safety requirements, and common law obligations.
Employers are encouraged to avoid acting in haste and to seek legal advice as appropriate.
