IATSE514 – News

Canada Emergency Response Benefit and incorporated company

Dear member,

We’ve had several questions about incorporated companies. So here are some examples of whether you are eligible for the Canada Emergency Response Benefit (CERB) that the federal government introduced as a result of COVID-19:

  • If, in the last year, you have obtained employment contracts through your company AND you have accumulated enough insurable hours as a result of your contracts as an employee (between 420 and 700 hours, depending on the region where you live), you are entitled to Employment Insurance benefits;
  • If you do contracts through your company AND you have obtained contracts as a self-employed person with an income of at least $5,000.00, you will be entitled to the Canada Emergency Response Benefit.

Many owners of incorporated SMEs are wondering if they will be eligible for support. They are shareholders whose remuneration is only in dividends. What measures are planned for an incorporated self-employed worker who is not entitled to employment insurance and who is not sick or in quarantine, but who is experiencing a slowdown in his or her activities and, consequently, a significant decrease in his or her sales at this time?

Dividends are not part of the income earned in 2019 or in the 12 months prior to the application, one of the criteria to qualify for CERB.

To qualify for CERB, the minimum income you must have earned is $5,000. Does a person who receives dividends have to include them in the calculation of their income?

Many things are considered income: employment income, income received as a self-employed person, Employment Insurance benefits, Quebec Parental Insurance Plan benefits, etc. All of these things are included in the calculation. But dividends, no, they are not part of the income eligible to receive the federal benefit. So, a person who works in a small or medium-sized business and is the sole shareholder of his or her company cannot receive CERB if he or she has opted solely for dividends as remuneration.

If I have accumulated hours as a self-employed person and hours as an employee, what income replacement program am I eligible for?

If you initially qualify for Employment Insurance, you will need to initially apply for this program.

If you do not qualify for Employment Insurance, or if you have exhausted your benefit period, you can apply for the Canada Emergency Response Benefit (CERB), which does not have a minimum number of hours, but rather a minimum income of $5,000.

I own a small business and we have taken steps to keep it open: Work-Sharing and layoffs. I would like to know if the Canada Emergency Response Benefit could then allow me to get $2,000 a month as an owner. My company is incorporated; I am not self-employed, hence my question.

If you are an executive shareholder of your SME and you paid yourself a salary of $5,000 in the last 12 months or in 2019, you are inactive and without income for 14 consecutive days for 4 weeks, you would be eligible.

For more information about Canada Emergency Response Benefit click on this link.

I hope this will help you see things more clearly!

With solidarity,
The IATSE 514 team

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