Congregational Finances During the Pandemic 12 - The United Church of Canada L'Église Unie du Canada - United-in-Learning

Congregational Finances
During the Pandemic – 12
           The United Church of Canada
           L’Église Unie du Canada

                                     August 12, 2020
                                      Erik Mathiesen
                                        Clyde Harris

A New Creed
We are not alone,                     We are called to be the Church:
    we live in God’s world.              to celebrate God’s presence
We believe in God                        to live with respect in Creation,
                                         to love and serve others,
    who has created and is creating
                                         to seek justice and resist evil,
    who has come in Jesus
                                         to proclaim Jesus, crucified and risen,
          the word made flesh
                                                 our judge and our hope.
           to reconcile and make
                                      In life, in death, in life beyond death,
           new
                                            God is with us.
    who works in us and others
                                                  We are not alone.
    by the spirit.
                                                               Thanks be to God.
We trust in God.

  EHM ~ The United Church of Canada

What We’ll Cover Tonight August 12
    Latest news
       –   Administration reminders (M&S, assessment, stats)
       –   Church helpdesk CRAhelp@united-church.ca
       –   10% TWS processing and reporting
       –   CEBA and CECRA news and extension
       –   CEWS major changes & extension to December
    Your questions
Information is accurate as at 3:00 p.m. EDT.
Information may be affected by subsequent
announcements.

EHM ~ The United Church of Canada

Moving Targets August 12
    Initially NO, but things evolved so churches are now:
       –    eligible for CECRA rent program (if tenant leases)
       –   eligible for CEBA loans (IF rental/sales revenue)
    All charities with payroll # eligible for 10% TWS but now a new
     reporting requirement
    75% CEWS program MODIFIED and EXTENDED, details
     posted Aug 11.
    T3010 filing deadline extended to Dec 31, 2020
-more important than ever that our ministries obtain proper
CRA online account access
-Same goes for adding online donation capability through
Canada Helps (registrations almost doubled)

EHM ~ The United Church of Canada

gives hope
                    Those who are most
                    vulnerable in Canada and
                    around the world count on
                    Mission & Service gifts and
                    will even more now.
                    Transferring Mission & Service gifts as
                    regularly as
                    possible lets those we serve know how
                    much they can count on our support.

                    If your congregation hasn’t already
                    transferred Mission & Service donations
                    received so far, could you please do so as
                    soon as you are able.
Credit: Our Place

thank you for your
                        dedicated leadership
                             The financial viability of our
                             beloved churches is of
                             utmost concern; We are also
                             concerned about those who
                             are suffering even more
                             now. Our shared Mission &
                             Service can help.

                             Thank you again for
                             faithfully supporting your
                             congregation’s ministry -
                             and our ministry together
                             through
Credit: Massey Centre
                             Mission & Service.

Assessments Due this Fall
 Assessment account statements will be issued in
    September
   Current plan is to add any residual amounts owing at
    year end to the 2021 invoice
   To restore or adjust PAR payments contact
    assessments@united-church.ca
   Mail to General Council office if not paying online
   Reminder: If you haven’t submitted your annual
    statistics report, please do so ASAP

 EHM ~ The United Church of Canada

Help Desk for CRA enrollment

EHM ~ The United Church of Canada

CRA Helpdesk – common problems
    Churches having different payroll numbers and business
     numbers
    Directors/Trustees having end dates so no one is on file
    deeming rule and if it is still going to be applicable going forward
    CEBA – still having some issues with their financial institutions
     saying they do not qualify
    Represent A Client – still hearing frustrations about the delay
    Web Access Code – if you get a code, you need to keep it on
     hand, if you lose it, they have to start the whole process again
    BOOKKEEPING- recommend separate account to track
     subsidies. Need for reconciliations and T3010 (line 4540).

EHM ~ The United Church of Canada

Federal 75% (CEWS) Elections/Attestation

   Boxes 1, 2, 4 may be used by a multi-point pastoral charge depending on the circumstances
    for determining revenue
   Box 3 is ignored
   Box 5 is checked if you are using cash method of accounting as opposed to accrual
   Box 6 is checked if you are using the option of comparing the current revenue to the
    average of January and February 2020
   Box 7 is checked if the pastoral charge elects to exclude government grants from the
    revenue calculations.

EHM ~ The United Church of Canada

10% Subsidy processing
    All church payroll entities eligible for 10% wage
     subsidy (March 18- June 19). Same for other
     ministries
    1,300 pastoral charges will have the rebate
     processing done for them by ADP and the national
     office
    Tools available online for those who choose to do it
     themselves
       –   Temporary Wage Subsidy worksheet
       –   TWSE-TA Form Managed Services

EHM ~ The United Church of Canada

10% Subsidy Processing
 ongoing “clean-up” for the 1,300 pastoral
     charges who signed up to have this done by
     ADP and national payroll team
    Status of individual church account varies:
       –   When signed up, frequency of payroll
           submission, adequacy of “tax bucket”
       –     lots of exception or odd situations
Trust the system. Individual queries slow us
down. Check August payroll register.
EHM ~ The United Church of Canada

10% Subsidy Reporting - PD27
 introduced July 27, 2020 online

To        be signed by employer or authorized officer
figuring             out how we will do this for everyone
who is having this done by ADP

EHM ~ The United Church of Canada

CEBA Clarification - recap
    $40,000 Canada Emergency Business
     Account
    Churches and other ministries are ELIGIBLE

 IF
    Must have payroll >$20,000
    Must have rental revenue on line 4610 or
     sales revenue on line 4640 of T3010
    Repaying the balance of the loan on or before December 31,
     2022 will result in loan forgiveness of 25 percent (up to
     $10,000).
EHM ~ The United Church of Canada

CEBA Clarification - recap
   You have to be able to certify applicant :
    is not a union, charitable, religious or fraternal organization or
     entity owned by such an organization or if it is, it is a registered
     T2 or T3010 corporation that generates a portion of its revenue
     from the sales of goods or services;

It is not a non-profit organization, registered charity,
    union, or a fraternal benefit society or order, or an
    entity owned by such an organization, unless the
    entity is actively carrying on a business in Canada
    (including a related business in the case of a
    registered charity) that earns revenue from the
    regular supply of property/goods or services;

EHM ~ The United Church of Canada

Restrictions on use of CEBA Funds

   The funds from this loan shall only be used by the
    Borrower to pay non-deferrable operating expenses
    of the Borrower including, without limitation, payroll,
    rent, utilities, insurance, property tax and regularly
    scheduled debt service, and may not be used to fund
    any payments or expenses such as
    prepayment/refinancing of existing indebtedness,
    payments of dividends, distributions and increases in
    management compensation.

EHM ~ The United Church of Canada

Applying for CEBA Funds-
Payroll stream
   If you have a business account, can apply online at
    major financial institutions
     –    Attestation is online too
   Talk to your financial institution if online not available.
   If payroll less than $20,000 and/or personal bank
    account used – you probably aren’t eligible anyway
    but you could explore the “non deferrable expenses
    stream”. Erik the pessimist says this is a waste of
    time.

https://ceba-cuec.ca/
EHM ~ The United Church of Canada

CECRA – The Benefit
    Canada Emergency Commercial Rent Assistance (CECRA) for
     small businesses provides relief for small businesses experiencing
     financial hardship due to COVID-19. It offers forgivable loans to
     eligible commercial property owners to:
    reduce the rent owed by their impacted small business tenants
    meet operating expenses on commercial properties

    Property owners must offer a minimum of a 75% rent reduction for
     the months of April, May and June 2020.
    Program now extended for July and August

-    https://www.cmhc-schl.gc.ca/en/finance-and-
     investing/covid19-cecra-small-business
    EHM ~ The United Church of Canada

CECRA - Eligibility
LANDLORD ELIGIBILITY
While the program is titled “Commercial” working with the Ontario
Non Profit Network we have confirmed that Not For Profits and
Charities who have properties that collect rent from eligible small
business owners will be eligible.
    Must have a legal rental or lease agreement
    Must have declared rental income on their 2018 and 2019 tax
     returns (T3010) or make special case
    No longer a requirement to have a mortgage, although it is
     administered via CMHC

    EHM ~ The United Church of Canada

CECRA - Eligibility
TENANT ELIGIBILITY
Tenants must prove a 70% reduction in income-
compared to last year or to Jan/Feb 2020 incomes OR
have ceased operations
Tenants regular rent must be less than 50k per month
Tenants must earn less than $20 million per annum

Tenant must provide their business number for
application. If sole proprietor SIN.

EHM ~ The United Church of Canada

CECRA Process
   Landlords to submit certain documents:
      –   Tenant attestation re revenue
      –   Owner attestation
      –   Rent reduction agreement
   Landlords to keep available
      –   Leases or rental agreements
Application available online.
Need to register first!
https://www.cmhc-schl.gc.ca/en/finance-and-
investing/covid19-cecra-small-business
SEE MAY 27 WEBINAR FOR “HOW TO” DETAILS
EHM ~ The United Church of Canada

CECRA: The Calculation
Who Pays What:
The tenants pays up to 25% (cannot exceed that)
The provincial government pays 50%, retroactively for April,
May, June
The landlord accepts the 25% loss
Example: Tenant one pays $1,000 a month usually
With the CECRA they now pay $250, the government pays
$500 and the landlord forgives $250. This applies for three
months
If the month has passed the reduction can be applied to
future months or refunded
  EHM ~ The United Church of Canada

United Church Emergency Loan-recap

 intended to supplement federal funding programs and
respond to transition from them as federal programs
expire.
   Special case intervention now
Online          now. Application goes automatically to region
for review
eligibility          to be confirmed in consultation with the
region
   needs based and viability based

 THANK YOU United Church Foundation!
EHM ~ The United Church of Canada

United Church Emergency Loan-recap

 This $10,000 loan

       –   will be interest free if paid in full by September 30,
           2021.
       –   if paid by September 30, 2021, $500 is forgiven for
           a total repayment of $9,500.
       –   Interest at 2% starts to accrue on October 1, 2021
       –   Principal and interest will be paid within three
           years from September 30, 2021.
       –   A payment plan will be developed with you.
   dates may change to align with everything changing

EHM ~ The United Church of Canada

Internal governance - recap

    Wage or rental subsidy applications do not
     require region approval
    CECRA is a forgivable loan so for approval
     purposes - a grant!
    Any loan applications REQUIRE
       –   congregation board approval
       –   region approval (perhaps expedited)
       –   Online application by someone authorized
           to “bind the applicant”
EHM ~ The United Church of Canada

Questions so far

EHM ~ The United Church of Canada

Federal Wage Subsidies @June 24

10% - you take it (and defer to ADP)
 https://www.canada.ca/en/revenue-
 agency/campaigns/covid-19-update/frequently-asked-
 questions-wage-subsidy-small-businesses.html

 75% - you apply for it – if eligible
 https://www.canada.ca/en/revenue-
 agency/services/subsidy/emergency-wage-subsidy.html
 Excellent resource now. Be sure to read FAQ.

 EHM ~ The United Church of Canada

CEWS – news Aug 11 July 17 June 24
   Major changes in program design
   Dates extended to November 21 at least
   Most ministries likely to be eligible for some periods
   Safe Harbour provision for periods 5 (July 5 to August 1)
    and/or 6 (August 2 to August 29).
   Period 5 application opens August 17. Updated
    calculators and documentation posted yesterday.
    BOTH HAVE ERRORS
   https://www.canada.ca/en/department-
    finance/news/2020/07/adapting-the-canada-emergency-
    wage-subsidy-to-protect-jobs-and-promote-growth.html
EHM ~ The United Church of Canada

Federal 75% (CEWS) Aug 11 Guidance

EHM ~ The United Church of Canada

(CEWS) – new periods

EHM ~ The United Church of Canada

CEWS new rates – any revenue drop

EHM ~ The United Church of Canada

Federal 75% (CEWS) –top up
The following table illustrates how the top-up subsidy rate is calculated:
(applicable more to camps, and closed outreach agencies)

EHM ~ The United Church of Canada

Federal 75% (CEWS) – phase out

EHM ~ The United Church of Canada

Federal 75% (CEWS) – phase out 2

EHM ~ The United Church of Canada

CEWS – Deeming rule change
    The Deeming Rule:
    As the 30% revenue reduction requirement
    has been replaced for these periods, the
    deeming rule has been changed. An eligible
    employer will now use the greater of its
    percentage revenue decline in the current
    period and the decline in the previous period
    for the purpose of determining its qualification
    for the base CEWS and its base CEWS rate
    in the current period.

EHM ~ The United Church of Canada

Federal 75% (CEWS)
    The CEWS will be processed at the payroll program
     (RP) account level, so you will have to file a separate
     application for each RP account.
    Do a separate version of the CRA online calculator
     and on line application for each RP#
    For cases where some employees on ADP and some
     not, you will need to have separate workpapers and
     consolidate them for your application (depending on
     whether different RP numbers)

EHM ~ The United Church of Canada

75% CEWS processing – calculator
    Separate spreadsheets for periods 1-4 vs 5-9
    Revenue numbers now get input into the calculators
    DON’T USE THE ONLINE CALCULATOR. BETTER TO HAVE
     A SPREADSHEET RECORD (personal opinion)
       –   Download the calculation spreadsheet(s)
       –   Enter the claim period (dropdown menu)
       –   Go to Weekly tab to enter each individual
              •   Monthly salaries x 12 / 52 = weekly salaries
              •   Employee at Arm’s Length must be answered
              •   All pay figures on a weekly basis
              •   All weeks must have an entry even if 0.00
              •   Totals transferred to Instructions and Results

EHM ~ The United Church of Canada

Federal 75% (CEWS)
    There are three ways to apply all online:
       –   My Business Account
       –   Business representatives may apply using
           Represent a Client. (need Level 2 or 3)
       –   If neither are an option for you, use the Web
           Forms application with your web access code
Sign into the Web Forms application
Get a web access code (WAC) 1-800-959-5525

    “help desk” support at CRAhelp@united-church.ca

EHM ~ The United Church of Canada

Cybersecurity - more scams

    COVID-19 related transition tools has
     created opportunity for scammers
    Most recently reports of purported
     messages from national office asking for
     e-payment (followed up with phone call)
    Phishing attempts often use name of
     someone you know.
    Don’t click on links or send info without
     checking.

EHM ~ The United Church of Canada

Insurance matters

    Insurance rate increases of 30% or more
       –   30% for UCC Protect program
       –   Reports of 40% + from others
    UCC Protect relatively flexible on Covid-19
     closing (visits 2x week vs. daily for some)
    Insurance companies have not identified any
     incremental requirements for re-opening

EHM ~ The United Church of Canada

Questions so far

EHM ~ The United Church of Canada

Logging into CRA Accounts or Service Canada

    Can’t avoid having online accounts for a charity anymore
    Reasonably straightforward unless
       –   Your numbers don’t make sense (RP should equal RR)
       –   You have previously been registered but don’t now know the
           contact name
       –   You have inadvertently de-listed your trustees/directors
       –   You maintain payroll “off” ADP

    To help you get there:
 CRAhelp@united-church.ca
Rose, Carla and Clyde will try to help you navigate
any complexity.

EHM ~ The United Church of Canada

Reconciling all this later this year
       –   So much happening at once and changing…..
       –   Inevitable that there will be some duplication or
           errors in claims
       –   Reconciliation in the fall for
              •   Maximization of 10% wage subsidy (max
                  $1,375 per employee or 10% of total wages)
              •   Reconciling 10% adjustment on 75%
       –   Keep books and records substantiating
              •   Eligibility calculations/determinations
              •   Your calculations

EHM ~ The United Church of Canada

Summary of what you need to do for wage
subsidies
       –   Solve the online application challenge
       –   PROCESS the 10% transactions (have ADP/GCO
           do or do it yourself)
       –   Determine your CEWS subsidy eligibility and for
           which periods.
       –   If eligible for the CEWS
              •   Use CRA spreadsheet for overall calculations
              •   Use ADP/church spreadsheet for 10%
                  adjustment
              •   File online by whichever method will work
              •   Keep complete records for each filing
EHM ~ The United Church of Canada

Contacts for action
   Getting set-up or fixed with CRA
          CRAhelp@united-church.ca

   ADP TEWS queries (authorization etc) payroll@united-church.ca
   Deferring/ reinstating assessments assessments@united-church.ca
   Church loan payments mpimpinella@united-church.ca
   Stewardship queries djagger@united-church.ca

   United Church emergency loan
https://www.united-church.ca/community-faith/being-community/united-
church-emergency-supporterosity_in_unprecedented_times.pdf

     EHM ~ The United Church of Canada

Closing

We say "we'll get through this" and yet grieve that so many will not.
We say "we're in this together" and yet know the huge chasms in our
experience.
We say "we'll build back better" and yet feel the tug into familiar grooves of
inequity and excess.
Creator. be with us.
Console us in our losses.
Shelter us in our hopes and intentions.
Embolden us in our dreams and gestures.
Come alongside us as we yearn, confirm and act towards your holy and
beautiful intention of right relations for peoples and our aching wounded earth.
Amen

Jennifer Henry, KAIROS

    EHM ~ The United Church of Canada