COVID-19: Updated Federal Response

Federal Update COVID-19 - Clearline CPA

The Government of Canada passed the COVID-19 Emergency Response Act this morning, containing their response plan for individuals and businesses.

Some of the items have changed since they were previously announced.

Here are the latest updates.




Emergency Response Benefit (“Benefit”)

  • The Benefit combines the previously announced “Emergency Care Benefit” and “Emergency Support Benefit”.
  • This Benefit covers both employed and self-employed individuals (who had more than $5,000 of total income in 2019).
  • Individuals must “have ceased working for reasons related to COVID19 for at least 14 consecutive days with a 4 week period” and not receive “income from employment or self-employment”.
  • Those Eligible for the Benefit can receive it for up to 16 weeks.
  • The amount of the Benefit will be determined by the Government by Regulation. No Regulations have been released but the Government has publicly announced that it is $500 a week. 
  • The application process for the Benefit will commence in early April. Payments are expected to be received within 10 days of application and would be paid every four weeks.
  • You are not eligible to receive this Benefit if you are entitled to receive Employment Insurance benefits (i.e. due to being sick or laid off).

We would assume that this Benefit now applies to people that have self-quarantined or closed their businesses (either voluntarily or by order of the government or regulatory body).  Previously there was a requirement that the individual had to be quarantined, sick, or have a family member that was quarantined or sick. We believe that this means more people will be eligible for this Benefit than previous thought.

For self-employed individuals, it is our understanding that you are required to receive zero revenue for the period to qualify for the Benefit. It appears, based on public comments by the Minister of Finance, that any revenue would disqualify you from receiving this Benefit.


Temporary Subsidy Amount (“Subsidy”)

  • Revised definition for Eligible Employers:
    • A Canadian-controlled private corporation (CCPC) eligible for the $500,000 small business deduction;
    • An individual other than a trust (*new*);
    • A partnership of either CCPCs or individuals (*new*);
    • A non-profit organization; or
    • A registered charity.
  • The amount of the Subsidy will be determined by Regulation. No Regulations have been released, but the Government previously announced that the Subsidy was 10% of remuneration paid, subject to maximums of $1,375 per employee and $25,000 per employer.

Note: The legislation includes a number of items that are determined by Regulation.  Regulations can be set by the Cabinet and therefore can be changed easier as they do not require the normal legislative approval.


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