‘It’s one or the other’
Canadians warned about trying to cash in twice
OTTAWA• As applications for the new wage subsidy program launched on Monday, the federal government warned Canadians who already receive an emergency benefit about the dangers of cashing in twice.
People who receive the $ 2,000/ month Canada Emergency Response Benefit (CERB) were told they would have to reimburse the program if they end up receiving retroactive pay.
“You won’t be able to keep both the wage subsidy and the Canada Emergency Response Benefit. It’s one or the other, not both,” Prime Minister Justin Trudeau warned on Monday morning.
“These are two different measures that aim to do the same sorts of things. It is one or the other.
“So people should keep that in mind that if you’re getting both, you should probably put one of them aside so that you can pay that back and you don’t get overly challenged with that down the road.”
On Monday, the federal government officially launched the application portal for the Canada Emergency Wage Subsidy ( CEWS). At 3 p.m. the same day, 30,000 companies had already applied to the program.
Created in response to the COVID-19 pandemic, the wage subsidy promises to cover 75 per cent of eligible employers’ payrolls — up to a weekly maximum of $ 847 per employee — for up to 12 weeks ( March 15 to June 6).
Trudeau said money will start rolling into companies’ bank accounts starting May 7, with that cash being then transferred to employees as part of their salary.
Since the wage subsidy is retroactive to March 15, some employees will receive backdated pay.
But that also means that if they were previously laid off and received the $ 2,000 per month CERB before being rehired and retroactively paid, they’re going to have to pay back the CERB.
“The advice I’d give anybody whose employer is looking to rehire them is to get good information from them, such as what date they’ll be rehiring them from. If it’s retroactive to March 15 and they received CERB during that time, then they have to start thinking about how they will reimburse the $ 2,000,” suggested Anne Marie Granger, supervisor at accounting firm Raymond Chabot Grant Thornton.
To facilitate the reimbursement, the CRA says it will be launching a new payback tool via its Myaccount portal starting May 11.
Taxpayers will always have the option of sending a cheque by mail as well.
If you’re not sure if you’re going to owe money, don’t fret either. CRA says it will contact everyone “in the future” who has received payments to which they are no longer deemed eligible to let them know they’ll have to return some money and how to do so.
The government also had a warning for those who thought they could keep both amounts if they don’t say anything: we will find you, and you will have to pay.
“We recognize that not all individ
CRA has just created
work for its auditors for the next
20 years.
uals will pay back the CERB on a voluntary basis, and as a result, the CRA will undertake the necessary compliance measures,” the agency said by email.
“These measures will ensure that Canadians who are rehired as a result of the CEWS will not also receive and keep the CER B when they are not eligible.”
“CRA has just created work for its auditors for the next 20 years,” Granger commented with a laugh. “But they will absolutely catch you.”
Why would the federal government design two programs that overlap so significantly, possibly creating headaches for taxpayers who have to figure out if they owe the government thousands of dollars?
The prime minister acknowledged that the government opted for speed over detail when it came to the design of the programs and preventing any overlap.
“We recognize that getting money out to people quickly and strongly, reliably was the most important thing and that’s what we did. We’ll figure out the next steps as we go and make sure that it’s fair for everyone,” Trudeau said.