Managing Your Sport Organization Through COVID-19 Updated!

Published May 19, 2020

As this is a rapidly changing environment, the information contained in this summary document may not be the most up to date and we have used best efforts to provide the most accurate information available at the time of writing.  Please follow the links provided to obtain the latest information.

Over the past months there have been a number of government announcements at the federal and provincial level addressing the economic impact of COVID-19 on businesses and individuals.  Below is a summary of some areas that may assist sport organizations in managing their employees and business in this unsettled time.

Federal Government Financial Initiatives

Additional Information on these initiatives and others can be found here Canada's Covid-19 Economic Response Plan

 Support For Business

Canada Emergency Wage Subsidy (75%) (CEWS)

Eligible small employers (including not for profits) may be able to receive a wage subsidy for a three-month period equivalent to 75% of remuneration paid to a maximum $847/week.  This subsidy will be effective March 15 – Aug 29, 2020.

In order to address the realities of the not for profit sector, there is new flexibility in how revenue is calculated and the required reduction in revenue in order to qualify.

Employers would be allowed to compare their revenue using an average of their revenue earned in January and February 2020. Employers would select the general year-over-year approach or this alternative approach when first applying for the CEWS and would be required to use the same approach for the entire duration of the program.

Additionally, not for profits can self-determine if they wish to include government revenues in their revenue calculation.  Once an approach has been selected, this approach must remain in effect for the duration of the wage subsidy program.

Lost revenues could include lost memberships, registrations, cancelled event revenues.  Employers must attest to the decline in revenue when making an application.

As this is a rapidly changing environment, the information contained in this summary document may not be the most up to date and we have used best efforts to provide the most accurate information available at the time of writing.  Please follow the links provided to obtain the latest information.

Over the past months there have been a number of government announcements at the federal and provincial level addressing the economic impact of COVID-19 on businesses and individuals.  Below is a summary of some areas that may assist sport organizations in managing their employees and business in this unsettled time.

Federal Government Financial Initiatives

Additional Information on these initiatives and others can be found here Canada's Covid-19 Economic Response Plan

Support For Business

Canada Emergency Wage Subsidy (75%) (CEWS)

Eligible small employers (including not for profits) may be able to receive a wage subsidy for a three-month period equivalent to 75% of remuneration paid to a maximum $847/week.  This subsidy will be effective March 15 – Aug 29, 2020.

In order to address the realities of the not for profit sector, there is new flexibility in how revenue is calculated and the required reduction in revenue in order to qualify.

Employers would be allowed to compare their revenue using an average of their revenue earned in January and February 2020. Employers would select the general year-over-year approach or this alternative approach when first applying for the CEWS and would be required to use the same approach for the entire duration of the program.

Additionally, not for profits can self-determine if they wish to include government revenues in their revenue calculation.  Once an approach has been selected, this approach must remain in effect for the duration of the wage subsidy program.

Lost revenues could include lost memberships, registrations, cancelled event revenues.  Employers must attest to the decline in revenue when making an application.

Employers must also do everything they can to cover all or some of the remaining 25% of remuneration.

Applications will be made through a CRA portal available in the coming weeks and it may take up to 6 weeks to receive funds.  Organizations must re-apply each month.  Updated information can be found here: Emergency Wage Subsidy

Temporary Wage Subsidy (10%)

Eligible small employers (including not for profits) who do not qualify for the 75% wage subsidy may be able to receive a temporary wage subsidy for a three-month period equivalent to 10% of remuneration paid up to a maximum of $1,375/employee and $25,000 per employer.  Employers can immediately reduce their remittances of income tax withheld on their employees’ remunerations.  This applies to the period March 18, 2020 to June 20, 2020.

For employers who are eligible for both the CEWS and the 10 per cent wage subsidy for a period, any benefit from the 10 per cent wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the CEWS in that same period.

Additional information can be found here: Temporary Wage Subsidy

Canada Emergency Business Account (CEBA)

Small business and not for profits can apply for up interest free loans of up to $40,000 and up to $10,000 of that amount (25%) will be forgivable for businesses meeting certain conditions. Eligible organizations must have had payroll costs between $20,000 and $1,500,000 in 2019.  Contact your financial institution for more information.

Canada Emergency Commercial Rent Assistance  

 CECRA will seek to provide loans and/or forgive loans to commercial property owners who in turn will lower or forgo the rent of small business for the months of April, May and June.  Provincial government partnership will be necessary to implement this.  Contact your landlord to determine if this will be made available to you.

Flexibility for Businesses Filing Taxes

Businesses can defer payment of income tax amounts until after August 31, 2020.  This applies to amounts owing as well as installment payments.  Not interest or penalties will be charged.

Deferral of GST/HST Payments

Businesses can defer any GST/HST payments or installments until June 30, 2020.

Support for Workers

Canada Emergency Response Benefit (CERB)

To support workers and help businesses keep their employees, the government has proposed legislation to establish the Canada Emergency Response Benefit (CERB). This taxable benefit would provide $500 a week for up to 16 weeks.

The benefit will be available to workers:

• Residing in Canada, who are at least 15 years old;
• Who have stopped working because of COVID-19 and have not voluntarily quit their job or are eligible for EI regular or sickness benefits;
• Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
• Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment or self-employment income.

The CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).  This is also available to students and seasonal workers.

The CERB is accessed through the CRA website.  CERB Application

Additional benefits

For individuals without paid sick leave who are sick, quarantined or forced to stay home to care for children or someone who is sick:

• 1 week waiting period for Employment Insurance claims removed for those individuals forced or recommended to be in quarantine or isolation.
• Waiving the requirement to provide medical certificate to access EI sickness benefits

Support for Individuals

Flexibility for Taxpayers

• • Deferral of 2019 income tax filing until June 1, 2020
  • Deferral of income tax payments until After August 31, 2020.  This includes amounts owed on 2019 income tax filing as well as 2020 installment payments.  No penalties or interest will be charged

Goods & Services Tax Credit

• • Low and modest income families who qualify for the Goods and Services Tax Credit can receive a one time HST payment by early May 2020 of approximately $400 for singles and $600 for couples.

Canada Child Benefit

• • An additional $300/child as part of their May 2020 payment

Canada Student Loans

• • 6 month interest-free moratorium on repayment for Canada Student Loans

Mortgage Default Management tools

• • Canada Mortgage and Housing Corp is providing mortgage payment relief by permitting lenders to allow payment deferral.  Contact mortgage provider for details.

Provincial and Territorial Government Business and Employee Initiatives

Most provinces have announced some form of relief for businesses and employees in relation to COVID-19.  Check these links for the most up to date information

BC Government Initiatives

Alberta Government Initiatives

Saskatchewan Government Initiatives

Manitoba – no information available

Ontario Government Initiatives

Quebec Government - Temporary Aid for Workers Program

New Brunswick – no information available

Prince Edward Island Government Initiatives

Nova Scotia Government Initiatives

Newfoundland – no information available

Nunavut – no information available

Northwest Territories Government Initiatives

Yukon Government Initiatives

Temporary Layoffs

Organizations considering temporary layoffs must abide by the provincial employment standards act with regards to maximum duration of the temporary layoff and consider the common law implications of temporary layoffs which may be construed as constructive dismissal (please consult with a lawyer).   Links to the relevant provincial ESA’s can be found through the links below:

BC Employment Standards - Temporary Layoffs

Alberta Employment Standards - Temporary Layoffs

Saskatchewan Employment Standards - Temporary Layoffs

Manitoba Employment Standards - Temporary Layoffs

Ontario Employment Standards - Temporary Layoffs

Quebec Employment Standards - Temporary Layoffs

New Brunswick Employment Standards - Temporary Layoffs

Prince Edward Island Employment Standards - Temporary Layoffs

Nova Scotia Employment Standards - Temporary Layoff

Newfoundland Labour Standards - Temporary Layoffs

Nunavut Labour Standards Code

Northwest Territories Employment Standards Act

Yukon Employment Standards Act

Records of Employment

During this time of heightened layoffs due to COVID-19, it is important that employers complete the Record of Employment correctly so that there is no delay in employees being able to access EI benefits.  Of particular importance is ensuring that the Reason Code included on the ROE is correct.

Depending on the circumstances, your COVID-19 related reason codes will either be:

• A – Shortage of Work: If company is temporarily closing because of COVID-19 or parts of their business are shutting down
• D – Illness or Injury: If employee has COVID-19 or if employee came back from a trip and is in quarantine
• N – Leave of Absence: If employee is staying home because of no daycare or if employee refuses to work because of COVID-19 or if employee is back from trip not sick but Mandatory Quarantine

For layoffs related to COVID-19, it is very important that the employer does NOT enter anything in Box 18 of the ROE.  Any ROE’s that have notes in this box will be removed from the automated processing system and transferred to a case worker.  This will greatly increase the processing time for the EI claim.

As mentioned at the beginning this is a very fluid time and new announcements are being made daily.  We will endeavour to update this posting as quickly as possible and we encourage you to check the links provided on a regular basis.

Employers must also do everything they can to cover all or some of the remaining 25% of remuneration.

Applications will be made through a CRA portal available in the coming weeks and it may take up to 6 weeks to receive funds.  Organizations must re-apply each month.  Updated information can be found here: Emergency Wage Subsidy

Temporary Wage Subsidy (10%)

Eligible small employers (including not for profits) who do not qualify for the 75% wage subsidy may be able to receive a temporary wage subsidy for a three-month period equivalent to 10% of remuneration paid up to a maximum of $1,375/employee and $25,000 per employer.  Employers can immediately reduce their remittances of income tax withheld on their employees’ remunerations.  This applies to the period March 18, 2020 to June 20, 2020.

For employers who are eligible for both the CEWS and the 10 per cent wage subsidy for a period, any benefit from the 10 per cent wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the CEWS in that same period.

Additional information can be found here: Temporary Wage Subsidy

Canada Emergency Business Account (CEBA)

Small business and not for profits can apply for up interest free loans of up to $40,000 and up to $10,000 of that amount (25%) will be forgivable for businesses meeting certain conditions. Eligible organizations must have had payroll costs between $20,000 and $1,500,000 in 2019.  Contact your financial institution for more information.

Canada Emergency Commercial Rent Assistance  

CECRA will seek to provide loans and/or forgive loans to commercial property owners who in turn will lower or forgo the rent of small business for the months of April, May and June.  Provincial government partnership will be necessary to implement this.  Contact your landlord to determine if this will be made available to you.

Flexibility for Businesses Filing Taxes

Businesses can defer payment of income tax amounts until after August 31, 2020.  This applies to amounts owing as well as installment payments.  Not interest or penalties will be charged.

Deferral of GST/HST Payments

Businesses can defer any GST/HST payments or installments until June 30, 2020.

Support for Workers

Canada Emergency Response Benefit (CERB)

To support workers and help businesses keep their employees, the government has proposed legislation to establish the Canada Emergency Response Benefit (CERB). This taxable benefit would provide $500 a week for up to 16 weeks.

The benefit will be available to workers:

• Residing in Canada, who are at least 15 years old;
• Who have stopped working because of COVID-19 and have not voluntarily quit their job or are eligible for EI regular or sickness benefits;
• Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
• Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment or self-employment income.

The CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).  This is also available to students and seasonal workers.

The CERB is accessed through the CRA website.  CERB Application

Additional benefits

For individuals without paid sick leave who are sick, quarantined or forced to stay home to care for children or someone who is sick:

• 1 week waiting period for Employment Insurance claims removed for those individuals forced or recommended to be in quarantine or isolation.
• Waiving the requirement to provide medical certificate to access EI sickness benefits

Support for Individuals

Flexibility for Taxpayers

• • Deferral of 2019 income tax filing until June 1, 2020
  • Deferral of income tax payments until After August 31, 2020.  This includes amounts owed on 2019 income tax filing as well as 2020 installment payments.  No penalties or interest will be charged

Goods & Services Tax Credit

• • Low and modest income families who qualify for the Goods and Services Tax Credit can receive a one time HST payment by early May 2020 of approximately $400 for singles and $600 for couples.

Canada Child Benefit

• • An additional $300/child as part of their May 2020 payment

Canada Student Loans

• • 6 month interest-free moratorium on repayment for Canada Student Loans

Mortgage Default Management tools

• • Canada Mortgage and Housing Corp is providing mortgage payment relief by permitting lenders to allow payment deferral.  Contact mortgage provider for details.

Provincial and Territorial Government Business and Employee Initiatives

Most provinces have announced some form of relief for businesses and employees in relation to COVID-19.  Check these links for the most up to date information

BC Government Initiatives

Alberta Government Initiatives

Saskatchewan Government Initiatives

Manitoba – no information available

Ontario Government Initiatives

Quebec Government - Temporary Aid for Workers Program

New Brunswick – no information available

Prince Edward Island Government Initiatives

Nova Scotia Government Initiatives

Newfoundland – no information available

Nunavut – no information available

Northwest Territories Government Initiatives

Yukon Government Initiatives

Temporary Layoffs

Organizations considering temporary layoffs must abide by the provincial employment standards act with regards to maximum duration of the temporary layoff and consider the common law implications of temporary layoffs which may be construed as constructive dismissal (please consult with a lawyer).   Links to the relevant provincial ESA’s can be found through the links below:

BC Employment Standards - Temporary Layoffs

Alberta Employment Standards - Temporary Layoffs

Saskatchewan Employment Standards - Temporary Layoffs

Manitoba Employment Standards - Temporary Layoffs

Ontario Employment Standards - Temporary Layoffs

Quebec Employment Standards - Temporary Layoffs

New Brunswick Employment Standards - Temporary Layoffs

Prince Edward Island Employment Standards - Temporary Layoffs

Nova Scotia Employment Standards - Temporary Layoff

Newfoundland Labour Standards - Temporary Layoffs

Nunavut Labour Standards Code

Northwest Territories Employment Standards Act

Yukon Employment Standards Act

Records of Employment

During this time of heightened layoffs due to COVID-19, it is important that employers complete the Record of Employment correctly so that there is no delay in employees being able to access EI benefits.  Of particular importance is ensuring that the Reason Code included on the ROE is correct.

Depending on the circumstances, your COVID-19 related reason codes will either be:

• A – Shortage of Work: If company is temporarily closing because of COVID-19 or parts of their business are shutting down
• D – Illness or Injury: If employee has COVID-19 or if employee came back from a trip and is in quarantine
• N – Leave of Absence: If employee is staying home because of no daycare or if employee refuses to work because of COVID-19 or if employee is back from trip not sick but Mandatory Quarantine

For layoffs related to COVID-19, it is very important that the employer does NOT enter anything in Box 18 of the ROE.  Any ROE’s that have notes in this box will be removed from the automated processing system and transferred to a case worker.  This will greatly increase the processing time for the EI claim.

As mentioned at the beginning this is a very fluid time and new announcements are being made daily.  We will endeavour to update this posting as quickly as possible and we encourage you to check the links provided on a regular basis.

Steve Indig   SJI@sportlaw.ca   or  Kathy Hare  KEH@sportlaw.ca