COVID-19

After the opening of the CERB portal on April 6th, many Canadians were surprised to find two payments of $2,000 in their bank accounts. Some had an EI payment of $2,000 and a CERB payment of $2,000, while others simply had two $2,000 CERB payments. While many hoped this was money they could keep, the reality was a system error and double applications. Many applicants had applied twice because they were unaware of whether they should apply with the CRA or Service Canada, and as such applied with both. Unfortunately, the government had not been able to implement a system that would prevent people from applying twice due to the rapidly evolving situation. 

No, you cannot receive both EI and CERB at the same time. If you are currently on EI and expect your benefits to end before October 3, 2020, then you may apply for the CERB when your EI benefits end and if you meet the other eligibility requirements for CERB. If you’ve applied for EI before March 15th, 2020, then you will only receive your regular EI payments and are not eligible for CERB. If you’ve applied for EI after March 15th, 2020, then your application will be rolled over to CERB automatically, and you will receive $2,000 dollars regardless if you qualified for more or less money with EI. You will receive this amount for up to 4 months after which your regular EI payments will start. If there’s one thing you should take from this is that you should only apply to one benefit. Any extra payments you get from double applications will lead to the government calling you for repayment. 

If you are a student with a part-time job or a seasonal job who’s been affected by COVID-19, you may eligible to apply for the $2,000 CERB. If this does not represent your situation, the Canadian Government has also announced that they are freezing student loan payments for six-months.

If you are able to continue to make your mortgage payments, it is important that you do so. But, if you lost your job because of COVID-19 you may be able to qualify for a mortgage payment deferral directly from your lender. On March 18th, Canada’s big six agreed to help Canadian homeowners by allowing them to defer mortgage payments for up to six months. Right now banks are dealing with homeowners on a case by case basis. If you are in need of a mortgage deferral, you need to get in contact with your lender directly. 

  Yes, interest will accrue during the time you defer your mortgage payments. That interest will then be added to your outstanding balance, which will then be paid off with your monthly payments. Meaning, your monthly payment amount will be slightly higher after the deferral period and you will be paying more interest over the lifetime of your mortgage. Despite the added interest, the deferral will help with short-term cash flow problems. 

Currently, there are no specific measures being taken by the Candian Government to help consumers who rent. While most provinces have frozen evictions, consumers need to get in contact with their landlords to discuss delaying their rent payments. 

The impact of the COVID-19 pandemic on your credit score will depend on how financially stable you are, whether or not you fall behind on your payments, and how you manage any extra financial stress from loss of income. If you lose your job because of COVID-19 and fall behind on your credit card payments without speaking with your credit card provider, this will negatively affect your credit score. 

Technically it should not. If you speak with your mortgage lender and they agree to allow you to defer one or more mortgage payments, they should not report those payments as “missed”. When speaking with your lender, it is important to ask them how they plan to report a deferred payment.

Some banks have been offering cuts in interest rates, while others have been offering payment deferrals. Starting April 4th, Canada’s top banks will be temporarily reducing credit card interest rates by 50%, although this varies based on the bank. This option is available for those consumers who qualify for payment deferrals. If you’re currently struggling to make your credit card payment this month, please get in contact with your financial institution. Depending on your unique financial situation, you may be eligible for a reduced payment or a deferred payment or a cut in interest.  

Unfortunately, if you don’t make your car loan payments, your lender does have the right to repossess your vehicle. But, given the current economic situation, anyone who has lost their income because of COVID-19 should get in contact with their loan provider right away to discuss the options available to them. If your car loan is held by a major bank you should be able to receive a payment deferral. Just keep in mind that you should contact your lender before you miss a payment.

In most cases, your insurer will cancel your insurance when you don’t make a payment. However, given the current circumstances, many insurers are providing their clients with 1-month payment deferrals. However, it is imperative that you call before choosing not to pay as it is not clear how the deferred payment will affect your future rates. You can also call and ask for a rate reduction if you’re not driving to work anymore. Just be sure to call and make certain of all the details before choosing not to pay. 

Yes, whether you defer a mortgage payment, credit card payment, line of credit payment or a loan payment including personal and auto loans, interest will accrue. However, how the interest will be charged is different based on each credit product and the bank’s policy. For more information on how interest will be charged on your personal loan payment deferral, please visit your bank’s website.

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The Canada Emergency Business Account (CEBA) was created to help small businesses who are financially struggling because of COVID-19. Businesses can qualify for loans up to $40,000 to help cover operating costs. You can apply for a CEBA loan through the financial institution where your primary Business Operating Account is held. Applications should be made online. To qualify for a CEBA loan, a business must be registered in Canada and be able to prove that it paid out between $20,000 and $1.5 million in payroll in 2019.  

To apply for BCAP, you must contact your financial institution who will then contact the Business Development Bank of Canada (BDC) or the Export Development Canada (EDC) if you qualify. There is currently no concrete information on the application process, however, if you call your bank, they will provide you with all the necessary information needed to start the process. 

Given the financial strain many businesses are enduring due to the COIVD-19 crisis, the government of Canada has extended the tax deadlines. The extension varies based on the type of business you run. If you are self-employed, a corporation, or a charity, each has its own filing date. Please refer to this page for detailed information on when you should file your business income tax return.