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Farm Financial Planner: COVID-19 farm relief programs

Programs are blessings in bureaucratic disguise, valuable and complex

Not only are the rules complex and professional fees potentially high, but the programs change often.

Federal relief programs for economic losses caused by the COVID-19 pandemic including job losses, business interruption, nonpayment of wages, unemployment and illness are being addressed by a web of federal and provincial programs. Farmers can benefit from several plans, provided they can document losses and, in some cases, pay back some part of subsidies. What follows is a condensed version of program explanations and application directions.

Existing plans for personal relief include, for example, the Guaranteed Income Supplement, which has been in effect to subsidize persons drawing benefits from Old Age Security who do not have sufficient income for their old age. Farm aid plans from the past have been given more money. Thus, the venerable Farm Credit Corporation has increased its loan pool by $5 billion. It is the new emergency programs that offer farmers fresh sources of help.

The list of new programs is like a piñata ready to shower money. It takes study of the programs and, in some cases, accounting help to get the applications right. Let’s start with the programs and then what they entail.


Canada Emergency Business Account (CEBA) is now accessible to farmers who have no payroll, that is, unincorporated farmers. They can now access $40,000 in interest-free loans available under the Canada Emergency Business Account, according to accounting firm Baker Tilly Canada. There is no longer a requirement to have a business account with a bank or credit union. The $40,000 interest-free loan allows forgiveness of 25 per cent of the loan up to $10,000, provided the balance of the loan is repaid by Dec. 31, 2022. A fresh loan of $20,000 is available to business owners who have already used the initial $40,000 loan.

CEBA rules are complex, yet not so onerous when you give them a moment’s thought. The business, a farm in this case, has to have a Canada Revenue Agency (CRA) business number and must have filed tax returns for 2018 or 2019. There must be eligible non-deferrable expenses between $40,000 and $1.5 million. The costs can include rent paid for a field, property taxes, utilities and insurance. Wage subsidies are part of the package of measures, but we’ll deal with them in the next section on the Canada Emergency Response Benefit.


The Canada Emergency Response Benefit (CERB) is for people, including farm workers, who lose their jobs due to the pandemic. The program offers a $2,000 monthly benefit for persons who are self-employed who cease working due to the pandemic. Recipients must be 15 years of age, have at least $5,000 of earned income in 2019 or in the 12-month period before applying for CERB. The CRA has clarified the $5,000 is net self-employment income and not gross income. Thus, a farmer who stops working due to the pandemic might not qualify for CERB because net income was less than $5,000. Using an example of a farm with $20,000 total sales but $16,000 in expenses, the $4,000 would be below the threshold and not qualify, according to Baker Tilly.

Work cessation must be for reasons related to the pandemic for at least 14 consecutive days during the first qualifying period and the applicant must not receive more than $1,000 from earned income during those 14 days. Then, for the subsequent four-week period, applicants must expect their situation to remain unchanged and should not expect to get more than $1,000 from earned income in the period. Someone staying home to care for someone sick with COVID-19 can qualify, as would workers who have to say at home to care for children because of school or daycare facility closure, Baker Tilly notes.

For corporations, the $1,000 monthly income limit is based on wages or dividends paid each month. If a family member is eligible for CERB, the $1,000 salary cap will apply. CERB payments will be taxable income in 2020.


The Canada Emergency Wage Subsidy, CEWS for short, has been extended to June 30, 2021. It can provide a subsidy of up to 75 per cent of pay normally paid to employees to a maximum of $847 per week per employee. There is no upper limit to how much any single employer may seek or receive. The amount of subsidy is based on the average weekly pay excluding periods of seven days or more during which the employee was not paid. The subsidy includes employer-paid contributions to the Canada Pension Plan, the Quebec Pension Plan and the Quebec Parental Insurance plan.

CEWS rules require an employer show some revenue decline. Any amount will do, not just a 30 per cent former limit. The program is thoughtful and sincere in its goals, but shows signs of hasty drafting, including this explanation: “Refund of employer contributions to these plans is only available in respect of employees on leave only.” Huh?

These programs are likely to be extended as needs require, but any farmer who wants assistance under the terms of these plans, which are only a distillation of other even more vaguely drafted rules, should take advice from advisors familiar with farm financial issues. Benefits paid under this plan appear to be non-recoverable, that is, need not be paid back directly.

The process for application of benefits is as complex as the rules. “These programs are helpful,” explains Richard Girouard, senior tax manager for accounting company BDO in Winnipeg. They are also exasperating. Girouard has been working on helping clients, including farmers, apply. “It is not easy to navigate the rules,” he adds. BDO’s fees for the programs range from $1,500 to $5,000. The costs are deductible for corporations, he adds.

Additional programs

Not only are the rules complex and professional fees potentially high, but the programs, such as CEWS, change often. There are also related programs long established that are not part of emergency relief. Don Forbes, head of Forbes Wealth Management Ltd. in Carberry, Man., is both an agronomist and a farm financial advisor with decades of experience helping farmers cope with government rules. He notes that long-standing Farm Credit Corporation benefits have extended to businesses like flour mills and other food processors. But the paperwork is a deterrent, he says.

“None of my clients have applied for FCC benefits. The paperwork is a deterrent and the money paid is a loan, not a grant,” Forbes explains.

Yet farmers and, more generally, agribusiness, are selectively using COVID-19 relief programs. According to Marilyn Braun-Pollon, vice-president for Western Canada and agri-business for the Ottawa-based Canadian Federation of Independent Business (CFIB), 59 per cent of agribusiness members have utilized CEBA and 35 per cent of such members have made use of CEWS.

CFIB has a helpline for small business owners including farmers at 1-888-234-2232. CFIB takes pains to point out that its help is not just for members. It’s for any business owner.

The future of these programs and their tax implications are being invented as I write this. There are programs not directed at farmers but that can be used by farmers; for example, extended Employment Insurance program benefits, the Canada Recovery Sickness benefit of $50 per week and the Canada Recovery Caregiving Benefit. The application process remains challenging.

About the author


Andrew Allentuck’s book, “Cherished Fortune: Build Your Portfolio Like Your Own Business,” written with co-author Benoit Poliquin, was recently published by Dundurn Press.



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