COVID-19: Canada's Support for Businesses
Note: the following article was up-to-date as of date-of-publication. Further program changes may have occurred at a later date, which are not necessarily reflected in the summary below
In response to the COVID-19 pandemic, the Canadian federal government has stepped up with a range of programs to help businesses and individuals through the financial impacts of the pandemic fallout. In addition to the CRA declaring their flexibility towards tax filing and payment deadlines, Canada’s stimulus programs for businesses, announced as of March 2020, include the following:
(For a listing of individual related stimulus programs, refer to our COVID-19: Canada's Support for Individuals post).
Work-Sharing Program (“WSP”): WSP agreements enable EI benefits to employees who have agreed to reduce their normal working hours by at least 10%-60% and share it equally with other employees. In response to COVID-19, the stimulus bills have simplified the WSP rules and extended the maximum duration from 36 to 78 weeks
Canada Emergency Wage Subsidy (“CEWS”): subsidy of up to 75% of wages, to a max of $847 per week (ie. first $58,700 earned by employees), paid between March 15, 2020 – June 6, 2020, paid by eligible employers (would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities). To be eligible, must prove at least a 15% decrease in revenues for March 2020 and 30% for April and May. Furthermore, potential 100 per cent refund for certain employer-paid payroll contributions.
Wage Subsidy Program: 10% wage subsidy program that enables employers to reduce income tax remittances by up to a maximum of $1,375 per employee and $25,000 per employer, for payrolls between March 18, 2020 – June 19, 2020
Employer Paid Top Up to EI Benefits: employees may claim EI benefits while employer tops up the employee with an additional amount, where the sum of the two is not greater than 95% of the employee’s regular earnings
Canada Emergency Commercial Rent Assistance (CECRA): Canadian government intends to introduce a program that will assist small businesses with their monthly rent. Details have not been released however, expectation is that the government will provide loans and/or forgivable loans to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April, May and/or June 2020
Business Credit Availability Program: financing and credit insurance solutions available through EDC and BDC includes:
Canada Emergency Benefit Account: limited duration interest-free loans of up to $40,000 (25% of which may be forgiven) to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced. To qualify, must have had a total payroll in 2019 between $20,000 to $1.5 million
Loan Guarantee for Small and Medium-Sized Enterprises: issue new operating credit and cash flow term loans of up to $6.25 million to SMEs
Co-Lending Program for Small and Medium-Sized Enterprises: co-lend term loans to SMEs for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program
Deferral of all GST/HST and import duties: allow businesses, including self-employed individuals, to defer until June 30, 2020 GST/HST payments, as well as customs duties owing. The deferral will apply to GST/HST remittances for the February, March and April 2020 reporting periods for monthly filers; the January 1, 2020 through March 31, 2020 reporting period for quarterly filers; and for annual filers, the amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year
Questions in how the above matter may relate to you? Reach out to Blumenfeld Woznica & Co to see how this matter may impact your specific accounting and/or tax situation.
This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as account/tax opinion or advice.