There’s no denying that the economic impacts of the COVID-19 pandemic have been great. Particularly hit are the contractors, consultants, freelancers, solopreneurs, sole proprietors and small businesses whose revenue streams have constricted these past weeks.

While the Government of Canada has rolled out a number of financial support measures in its COVID-19 Economic Response Plan, many self-employed individuals have been left wondering whether or not they qualify for any of these programs.

Blueprint Accounting has fielded a lot of questions from self-employed individuals regarding these financial support programs. Here are some of the most commonly asked questions and what we can tell you so far.


Is the 10% Temporary Wage Subsidy now a 75% subsidy?

Not quite. These are actually two separate programs. The 10% Temporary Wage Subsidy (TWS) allows you to retain 10% of the remittances you would normally make to the government. It can be implemented immediately if your business is eligible and claimed on remuneration paid between March 18 and June 19, 2020.

The 75% subsidy, titled the Canada Emergency Wage Subsidy (CEWS), is basically a cash transaction. You apply directly to the government for this subsidy and, if approved, receive a cash deposit equivalent to 75% of the eligible remuneration paid between March 15 and June 6, 2020.


Can I qualify for both the Temporary Wage Subsidy and the Canada Emergency Wage Subsidy?

Technically yes; however, the TWS and CEWS have different criteria (see below). While eligibility for the TWS is quite broadly defined, the CEWS has specific payroll and revenue requirements. If your business qualifies for both, any benefits you receive through the 10% subsidy will reduce the amount available through the CEWS. Employers that don’t qualify for CEWS may still be eligible for the TWS.


Are self-employed individuals eligible for the Temporary Wage Subsidy?

It depends. According to the government, eligible businesses include sole proprietors (individuals, excluding trusts); some partnerships, non-profit organizations, registered charities, and those CCPCs eligible for the small business deduction.

You must also have a business number and, crucially, a payroll through which you pay remuneration to an eligible employee. This last point is what excludes many sole proprietors, particularly those consultants, freelancers, contractors, and solopreneurs working in the gig economy. Why? Payroll. Most sole proprietors don’t have one.


What about my eligibility for the Canada Emergency Wage Subsidy?

Eligible businesses are cited as individuals, taxable corporations, partnerships (if partners are eligible employers), non-profits, and registered charities.

Payroll applies here as well, but not a specific dollar amount – in this case, you needed to have had a CRA payroll account on March 15, 2020. In addition, you have to demonstrate that your monthly revenue has decreased 15% year-over-year in March 2020 and 30% in the months thereafter. To calculate revenues, you can use either the accrual method or the cash method (not both).

Note, if as an employer you’ve engaged employees in the Work-Sharing Program, the EI benefits those employees receive will reduce the benefit you are entitled to through CEWS.


I run a business that’s been operating for less than a year. How can I demonstrate a decrease in revenue?

Established businesses can compare their revenue year over year, but if you’ve been operating for less than a year, this isn’t possible. Therefore, as a new / start-up business you can compare the average of your January and February revenue to your revenues in March, April, and May.

Given the unique circumstances that businesses (particularly small and medium) face, many assume they’re ineligible. But there’s a big difference between actually being ineligible and simply being uncertain how to show that you are eligible.

In our experience thus far, there are often ways to demonstrate eligibility that are not immediately obvious. If you can’t figure out whether or not you meet the criteria, get in touch. We can help you evaluate your circumstances and determine what documentation is needed to make your case.


So, if I had a payroll account on March 15, 2020, I qualify for CEWS?

Yes, assuming you can also demonstrate the loss of revenue and other criteria discussed above.


I’m a sole proprietor and I made more than $50,000 in revenue in 2019. I’ve lost 30% of that revenue as a result of COVID-19. Am I eligible for the subsidy?

Again, it comes back to the question of payroll. Some sole proprietors do have payrolls, and some incorporated businesses have a payroll of as few as one individual (the business owner). If, however, you have no payroll, then even though your business revenue IS your personal income, it doesn’t count as a “wage.” No wages, no wage subsidy.


Okay, so I’m a sole proprietor. I clearly don’t qualify for either wage subsidy but I’ve lost all of my income. What am I supposed to do?

Self-employed individuals who do not qualify for the subsidy programs nor for Employment Insurance (EI) can apply to receive the Canada Emergency Response Benefit (CERB). A temporary income support, CERB provides $500 a week ($2,000 per month) for up to 16 weeks.

Applications are now open online through CRA My Account and via an automated phone service. You will need to reapply every four weeks.


I’ve lost some but not all of my regular income. Am I eligible for CERB?

It depends on how much income you’re still earning. If you’ve made $1,000 or less in employment and/or self-employment income for 14 consecutive days, you qualify and can apply for CERB.

Importantly, you must reapply for CERB every four weeks and in your subsequence applications, you cannot earn more than $1,000 within the entire four-week period of your claim.


What if I’m no longer receiving income from my part- or full-time work either?

Then it depends because your part-time or full-time employment may entitle you to EI benefits. You cannot benefit from both EI and CERB at the same time, which includes maternity and paternity leave benefits. The CERB and EI application portals should funnel you to CERB or EI as appropriate, but this FAQ addresses the CERB vs EI question quite thoroughly.

Generally speaking, if your employment income disappears or declines to the point where your combined employment and/or self-employment income is $1,000 for less for a period of 14 consecutive days AND you are not already receiving EI benefits, then you can apply for CERB.


Will I be able to access any of the business loans that the government has established?

If your business is incorporated and you meet the minimum $20,000 payroll criteria (maximum $1.5 million), you can apply for loans available through the Business Credit Availability Program and the Canada Emergency Business Account. These loan programs are administered through banks, so you will need to speak to your financial institution to see if you are a fit for these programs.


I’m still not sure that any of these programs will help me.

We understand that it’s a frustrating and uncertain time for self-employed individuals in need of financial support. Though it may be small comfort, remember that in just a few weeks the government has deployed financial assistance programs that would normally have been developed and implemented over the course of months or even years.

As a result, these programs are in a constant state of adjustment and we are hopeful that in the coming days stronger supports for self-employed individuals will come into effect.

Blueprint will continue to provide updates as new information and resources become available. If you’d like to discuss the specific circumstances of your business and options available, please contact us directly to arrange a consultation.


Blueprint’s commitment to help

Many of the small and medium businesses, entrepreneurs and consultants we serve are wondering how to maintain not only their personal health but the health of their businesses and, by extension, their employees during these difficult times.

Blueprint will do everything we can to ensure that businesses have the accurate and up-to-date bookkeeping and financial records they need in order to speed their applications for benefits, financing, and lines of credit.

For businesses struggling to implement the Temporary Wage Subsidy or produce documentation (such as Records of Employment—ROEs) for their workers, we are here to help you do so as fast as possible.

Blueprint is also offering current clients free short-term cash flow forecasting for business owners to make well-informed decisions in the days ahead. Contact us to schedule a cash flow forecasting session or to Ask us about this service and how you can benefit