This bulletin is part of a weekly series that provides a recap of important COVID-19 developments and their impact on employers as they navigate these challenging times. This recap covers the week of March 23, 2020 and is current as of March 30, 2020.
During the week of March 23, 2020, the federal and provincial governments announced a number of measures that will affect how employers carry on business during the pandemic situation, including: the mandatory order for all non-essential workplaces in Ontario to close for at least 14 days; the introduction of the new Canada Emergency Response Benefit; deferral of WSIB premiums for six months; increases to the previously announced Temporary Wage Subsidy; and new temporary special measures with respect to the federal Work-Sharing program. Below we detail these developments, and the impacts they may have on employers’ plans for carrying on business in the next weeks and months.
All Non-Essential Businesses to Shut Down for at Least Two Weeks
As discussed in our recent blog, Ontario issued an emergency order for all non-essential businesses in the province to shut down for at least 14 days, beginning March 25, 2020, due to the COVID-19 pandemic.
Crucially, this order does not prevent the employees of any business from working from home.
The Ontario government has also released a list of the types of businesses that it deems to be essential and that are therefore not subject to the shutdown order. The businesses deemed essential are listed and categorized by industry. While not every business within each industry is considered essential, the industries within which there are some essential businesses include:
- Retail and Wholesaling;
- Food Services and Accommodations;
- Institutional, Residential, Commercial and Industrial Maintenance;
- Telecommunications and IT Infrastructure/Service Providers;
- Transportation;
- Manufacturing and Production;
- Agriculture and Food Production;
- Construction;
- Financial Activities;
- Resources;
- Environmental Services;
- Utilities and Community Services;
- Communications Industries;
- Research;
- Health Care and Senior Care and Social Services;
- Justice Sector;
- Other Businesses; and
- Business Regulators and Inspectors.
Businesses that supply support, supplies, systems or services necessary for essential businesses/services to operate are also considered essential.
Employers should consult the official list of essential businesses to determine whether they are subject to the shutdown order.
Employers can also call the province’s toll-free Stop the Spread Business Information Line at 1-888-444-3659 if they are unsure whether their business is considered essential or if they have other questions about the emergency shutdown order.
Canada Emergency Response Benefit
As we discussed in a recent blog, Prime Minister Trudeau announced a new federal benefit for workers who have lost their income as a result of COVID-19, called the Canada Emergency Response Benefit (the “CERB”), on March 25, 2020. The CERB will provide affected workers with $2,000 per month for up to four months, payable every four weeks, from March 15, 2020 until October 3, 2020.
The CERB replaced the planned Emergency Care Benefit and the Emergency Support Benefit that had been announced the previous week, in order to streamline the application process for Canadians affected by COVID-19. According to the government, the application portal for the CERB will be available in early April.
In its official news release, the government stated that the CERB will be available to Canadians who:
- lost their jobs, are sick, quarantined, or taking care of someone who is sick with COVID-19; and
- 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 is available to wage earners, contract workers, and self-employed individuals who are not eligible for Employment Insurance (“EI”) benefits. Further, workers who are still employed but are not receiving employment income because of COVID-19 will qualify for the CERB.
Although the government has stated that workers will be eligible for the CERB regardless of whether they are eligible for EI, it also stated that workers who are already receiving EI regular and sickness benefits as of March 25, 2020 should not apply for the CERB while they continue receiving EI benefits.
Nonetheless, workers who are already receiving EI benefits, but who will stop receiving them before October 3, 2020, will be eligible for the CERB if they still cannot return to work because of COVID-19 once their EI benefits cease. Similarly, workers who receive the CERB will still be eligible to receive EI benefits after the 16-week period covered by the CERB ends if they are still unemployed at that time.
Legislation enacting the CERB was passed under Bill C-13, called the Canada Emergency Response Benefit Act (the “CERBA”).
The CERBA provides further details on the eligibility criteria for the CERB, including that workers must:
- be at least 15 years of age and be resident in Canada;
- have received at least $5,000 in 2019, or the 12 months preceding their application, from employment, self-employment, Employment Insurance (“EI”) benefits, or certain provincial plans;
- have ceased working “for reasons related to COVID-19” for at least 14 consecutive days within the four-week period in respect of which they apply;
- not have received income from employment or self-employment, EI benefits, or certain provincial plans during the 14-day period; and
- not have “quit their employment voluntarily”.
However, these eligibility criteria may be subject to additional regulations by the Minister of Employment and Social Development going forward.
All WSIB Premiums can be Deferred for Six Months Due to COVID-19
On March 26, 2020, as part of measures to provide financial relief to employers coping with the COVID-19 pandemic, the Ontario government announced that premium reporting and payment to the Workplace Safety and Insurance Board (“WSIB”) for collective coverage under the Workplace Safety Insurance Act can be deferred for six months, until August 31, 2020.
All WSIB-covered employers are automatically eligible for this relief. Interest on outstanding premium payments will not accrue during the six-month deferral period, the WSIB will not charge penalties, and there will be no negative consequences to businesses that take advantage of the deferral. Workers at eligible workplaces will continue to be fully covered during the deferral period.
The government has pledged $1.9 billion to provide for this six-month deferral of WSIB premiums, which is part of a $17 billion package under Ontario’s Action Plan: Responding to COVID-19. The government expects that the deferred premiums will be an average $1,760 for approximately 275,000 Ontario businesses.
Huge Increases in the Federal Wage Subsidy and Other Financial Supports for Employers
On March 27, 2020, the Prime Minister announced that the federal government is increasing the wage subsidy it announced last week for small- and medium-sized business (the “Temporary Wage Subsidy”), from 10% up to 75%, in an effort to help prevent layoffs and help employers bring laid-off employees back to work. Additionally, the government announced on Monday, March 30, 2020, that the subsidy will be now available to employers of all sizes that have experienced a 30% or more reduction of revenue as a result of the COVID-19 pandemic, and will be available for up to the first $58,700 in annual salary, which translates to a subsidy of up to $847 per week per employee. This subsidy will be retroactive to March 15, 2020.
The government previously stated that the Temporary Wage Subsidy would benefit employers immediately by reducing the amount of payroll deductions that they are required to remit to the Canada Revenue Agency in respect of their employees’ remuneration, for a period of three months. At this time, it is unclear whether the duration of the Temporary Wage Subsidy and the way that it operates will remain the same.
Although additional eligibility criteria for the Temporary Wage Subsidy are still unclear, Trudeau has suggested the government intends to release more information by the end of March.
Moreover, the Prime Minister also announced that the federal government will also be assisting employers with a Canada Emergency Business Account that will provide small businesses with up to $40,000 each in government-guaranteed loans from banks that will be interest free for the first year. Further, up to $10,000 of these loans will be forgivable in certain circumstances.
The government also announced that it is increasing the Business Credit Availability Program from $10 billion to $22.5 billion, under which Export Development Canada and the Business Development Bank of Canada will coordinate with private sector lenders to provide credit solutions for Canadian businesses experiencing cashflow issues.
Finally, the government announced that GST/HST payments and duties and taxes on imports will be deferred until June 2020, which it estimates will be equivalent to $30 billion in interest free loans for Canadian businesses.
Temporary Special Measures with respect to Work-Sharing
On March 27, 2020, the federal government announced additional special measures to the Work-Sharing adjustment program (“Work-Sharing”). Work-Sharing is designed to help provincially and federally regulated employers and employees avoid layoffs when there is a temporary reduction of 10% or more in the normal level of business activity that is beyond the control of the employer.
Under the Work-Sharing program, the employer and a core group of employees agree that the employees will work a reduced schedule and share available work. Employees are eligible to have their reduced hours compensated in part by Employment Insurance.
To assist employees and employers affected by COVID-19, and limit layoffs, the Government of Canada had previously extended the maximum duration for Work-Sharing from 38 weeks to 76 weeks. The government has now taken the further steps of removing the requirement to submit a recovery plan with the application (which was the most labour-intensive portion) and reducing the waiting time between when the application must be submitted and work-sharing can begin from 30 days to ten days.
What Do These Developments Mean for You?
The various measures above support the Government of Canada’s stated commitment to support employers and employees affected by COVID-19 and limit layoffs and terminations of employment during these turbulent times. In announcing the increase to the Temporary Wage Subsidy and the additional loans that will be available to businesses, the Prime Minister underscored the importance of maintaining business relationships to the speed of the eventual economic recovery.
Whether the supports are sufficient to work as intended and whether any additional supports are forthcoming remains to be seen. In the meantime, employers are still faced with significant uncertainty as they wait for further detail about how all of these programs will function, independently and in concert with other new and existing initiatives. As a result of some of these program developments, employers would do well to consider whether their current business continuity plans need to be (or would benefit from being) amended to address the new status quo, knowing, of course, that further changes are forthcoming.
For example, the government has yet to address whether or how employees receiving the CERB will affect Supplemental Unemployment Benefit (“SUB”) plans that employers may have in place. Nevertheless, as the law currently stands, employees will generally not be entitled to payments under SUB plans while receiving the CERB. This is because employees are not eligible to receive the CERB while they are receiving EI benefits, whereas the Employment Insurance Regulations (the “EIR”)requires that SUB plans only provide payments to employees that are receiving EI benefits, subject to certain narrow exceptions.
Accordingly, employees that receive the CERB may not be able to receive SUB plan payments until their CERB entitlement ceases, at which point they can apply for EI. The government could enact legislative amendments to permit SUB plans to provide top-ups to CERB payments, but it has yet to announce any such plans.
The Ontario government’s automatic deferral of WSIB premiums for six months will certainly provide support to the province’s WSIB-covered employers at the time; however, employers planning for the coming months should keep in mind that though the payments may be deferred and no interest will accrue, employers will still be expected to pay the premium amounts once the deferral period ends, unless it is extended further.
The increased Temporary Wage Subsidy may be a key factor in keeping organizations operating according to business as usual (or as close to that as possible under the current circumstances in which many businesses that remain in operation are taking significant social-distancing measures). However, as noted above, the eligibility details are still not fully available, meaning that the subsidy’s scope of impact is currently difficult to predict.
Finally, the latest changes to the Work-Sharing program, which mean that the program can be implemented much more quickly, with much less effort on the employer’s part, mean that more employers may find it useful and practical to implement, potentially limiting disruptions to their workplaces.
As always, we will monitor the above programs and orders for further developments, and keep you In the Know about any changes likely to impact how employers can navigate this unprecedented situation. For more information about how any of these developments may impact your workplace, and for strategic considerations regarding how to leverage them in your business continuity plans, feel free to contact a member of our team.
Keep well and safe.
This blog is provided as an information service and summary of workplace legal issues. This information is not intended as legal advice.