Please note: the federal government is constantly updating their website as new information is announced. Remember to check Canada’s official coronavirus webpage and CREA’s COVID-19 online hub to stay up to date.
On Friday, July 17, Minister of Finance Bill Morneau announced a redesign of the Canada Emergency Wage Subsidy (CEWS) to help broaden the program’s reach. These proposed changes to the CEWS were debated and approved in the House of Commons on July 21. They include:
- extending the program until December 19, 2020;
- allowing entities that use the cash method of accounting to use accrual-based accounting to compute their revenues;
- making the subsidy accessible to a broader range of employers by including employers with a revenue decline of less than 30% and providing a gradually decreasing base subsidy to all qualifying employers; and
- introducing a top-up subsidy of up to an additional 25% for employers that have been most adversely affected.
CREA has been advocating for changes to the CEWS that would allow more brokerages to access the program. We welcome these much-needed changes. In a written brief to the House of Commons Standing Committee on Finance delivered on May 8, 2020, CREA highlighted the need to allow businesses to demonstrate loss of revenue through accrual accounting. We also pushed for an extension of the CEWS until the end of the year during a Department of Finance consultation in June.
Effective July 5, 2020, the CEWS consists of a base subsidy available to all eligible employers that are experiencing a decline in revenues, with the subsidy amount varying depending on the scale of revenue decline; and a top-up subsidy of up to an additional 25% for those employers that have been most adversely affected by the COVID-19 crisis.
For more information about the varying base rate as a function of revenue decline, consult the Department of Finance’s CEWS backgrounder. If you would like more information, or to apply for the program, visit the CEWS website or call 1-833-966-2099.
The CEWS is part of the Government of Canada’s COVID-19 Economic Response Plan. The government is constantly assessing the evolving situation and is likely to introduce additional measures as it deems necessary. We are monitoring the implementation of existing measures and continue to advocate on behalf of REALTORS® as new initiatives are developed.
On July 18, reports surfaced the Canada Mortgage and Housing Corporation (CMHC) was funding research into a home equity tax. CREA immediately contacted senior government officials to raise concerns about the reported issue. We were assured this was not government policy and senior officials would move swiftly to publicly deny there was any truth to the reporting.
In a tweet, Minister Ahmed Hussen stated “The Government of Canada is not looking at charging capital gains on primary residences. This is not under consideration by our government. Any suggestion otherwise is false.” CMHC also released a statement clarifying the intended purpose of the research as part of their Solutions Labs initiative, while their CEO denounced the initial report as “inaccurate and misleading.”
We continue to monitor the situation closely and work with government officials to drive policies that promote responsible homeownership. Our strong working relationship with CMHC has resulted in an invitation to participate in this Solutions Labs initiative, and we look forward to working toward solutions that will result in improved housing affordability for all Canadians, including homeowners and first-time home buyers.
This article is for information purposes only and is not a substitute for professional advice. If you need professional advice you should consult a lawyer, accountant or other qualified professional.