top of page

COVID-19 RELIEF MEASURES

UPDATED AS OF APRIL 13, 2020


FINANCING OPTIONS FOR BUSINESSES

 

As a part of COVID-19 relief measures, the Federal Government is offering the following:

 

 

1) SMALL BUSINESS LOANS

BDC provides up to $100,000 in small business loans. There is an easy online application process through the website.

Info: https://www.bdc.ca/en/online_financing/pages/loan-application.aspx

They are currently experiencing a high volume of applications and therefore, it is recommended that you apply soon to avoid further delay.

 

2) CANADA EMERGENCY BUSINESS ACCOUNT

The Federal Government announced that interest free loans of up to $40,000 will be made available to small to mid-sized businesses through commercial banks. The loans will be interest free for one year, and $10,000 may be forgivable if the business repays the loan by the end of 2022.

To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.

 

Action NOW:

 

3) BUSINESS CREDIT AVAILABILITY PROGRAM (BCAP)

The BCAP will allow the Business Development Bank of Canada (“BDC”) and Export Development to provide more than $10 billion of additional support to small and mid-sized businesses. Many of our clients are concerned about their working capital and funding requirements during the pandemic. We have been advising our clients to reach out to BDC to see if they may qualify for a loan. Relief measures include:

​

  1. Working capital loans of up to $2 million with flexible terms and payment postponements for up to 6 months for qualifying businesses;

  2. Postponement of payments for up to 6 months, free of charge, for existing BDC clients with total BDC loan commitment of $1 million or less; and

  3. Reduced rates on new eligible loans.

 

Info: https://www.bdc.ca/en/pages/special-support.aspx?special-initiative=covid19

​

​

SUPPORT FOR CANADIAN BUSINESSES

 

1) CANADA EMERGENCY WAGE SUBSIDY (CEWS)

The federal government announced up to 75% wage subsidy for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. This will help businesses to keep and return workers to the payroll. Note that businesses must choose to benefit from only one subsidy, either the CEWS or the Temporary Wage Subsidy (“TWS”) described in the next section below. An employer which qualifies for both will be a reduction in the CEWS by the amount granted by the TWS, which is a subsidy of up to 10% of the remuneration. An application under both programs may be beneficial for cash flow purposes since the TWS subsidy is a reduction of remittances owed, whereas the CEWS is a subsidy paid retroactively.

 

Key notes, as of date of release:

  • It applies to private businesses which are not funded by the government (including sole proprietors, corporations and partnerships), as well as non-profits and charities. Partners in partnerships must consist of eligible employers. Public and foreign owned corporations also qualify for the subsidy;

  • Most Non-Profit Organizations and public sector entities do not qualify.

  • Eligible remuneration for purposes of the CEWS and TWS includes:

    • Salary, wages and other remuneration for which employers are required to withhold and remit amounts to the CRA but does not include severance pay, stock option benefits, or taxable use of business assets (ie. Corporate owned vehicles)

    • The wage subsidy will apply to all non-arm’s length employees who are on payroll before March 15, 2020.

    • For employees that do not deal at arm’s length (ie. Certain family members), the subsidy amount is limited to eligible remuneration paid in any period between March 15 and June 6, 2020, to a maximum benefit of $847 per week or 75% of weekly pre-crisis remuneration.

  • Business must demonstrate a reduction of revenues of at least 1% of their revenue in March 2020 and 30% for April, or May in comparison to “eligible periods” (discussed below). Also, decline must be due to COVID-19.

    • For comparative purposes, revenue means gross revenue from arm’s length sources calculated using the employer’s normal accounting period, and excludes revenues from extraordinary items or amounts on account of capital.

    • The reduction in revenue calculation may be made under an accrual or cash basis. Once a calculation method is determined, it must be used for the duration of the program

​

  • Wage subsidy up to 75% of salaries, on first $58,700 per employee. ($847 per week, per employee).

  • Employers eligible for the CEWS will be eligible for an additional 100% refund of certain employer portions of Employment Insurance and Canada Pension Plan;

  • Every effort must be made to top up the remaining 25%.

  • No restriction for number of employees or size of company.

  • Serious consequences for modifying reporting to take advantage of subsidy.

  • Application is required through My Business Account with CRA, portal still to be announced.

  • Businesses are required to reapply for the subsidy for each month.

  • The Minister of Finance estimates that payments will be processed in three to six weeks being the “worst case scenario”, but the press release indicates that the payments will take up to three months.

  • A portal is expected to come online within the first few weeks of April;

  • Businesses must pay for wages and administer payroll as usual (net of payroll withholding taxes, CPP and EI) and will apply for the subsidy retroactively;

 

Action NOW:

​

2) TEMPORARY WAGE SUBSIDY FOR EMPLOYERS

If you do not qualify for the CEWS, The Temporary Wage Subsidy for Employers is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the CRA. This is available to all eligible small businesses (defined as non-profits or Canadian-controlled private corporations (CCPC) with less than $15 million of taxable capital). Businesses do not need to show a decline in revenue to be eligible for this program.

 

Key notes, as of date of release:

  • The subsidy is equal to 10% of the remuneration you pay from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee and to a maximum of $25,000 total per employer.

  • No need to apply for this subsidy. It is to be calculated and administered when submitting your typical payroll remittance. Talk to your payroll provider.

  • If an employer receives CEWS and do not meet eligibility requirements, the employer will be required to repay the amounts. Penalties may include fines or imprisonment, with a penalty equal to 25% of the value of the subsidy claimed.

  • Any amounts received under TWS will generally reduce the CEWS.
    https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html

 

3) INCOME TAX PAYMENTS FOR ALL TAXPAYERS (INCLUDING CORPORATIONS)

The CRA will allow taxpayers to defer their taxes until after August 31, 2020. The payment of any income tax amounts that become owing on or after March 19, 2020 and before September 2020 will be due September 1, 2020. This relief will apply to income tax balances due, as well as instalments, and no interest or penalties will accumulate on these amounts during this period. It is unclear at this time whether the CRA is intending to waive late-filing penalties. As such, it is recommended that all taxpayers continue to file all other returns by their tax filing deadlines until further notice.

 

4) FEDERAL GOVERNMENT ANNOUNCES BROAD TAX DEADLINE EXTENSIONS

The Federal Government announced additional extensions to many tax-related deadlines. Most federal tax filing deadlines have been extended to June 1, 2020, including the March 31 deadline for T1134 forms and T2s. The filing deadline for the T5013 partnership return and other information that individuals will need to complete their T1 returns (such as T3 Trust Returns and NR4 Statement of Amounts Paid or Credited to Non-Residents) have been extended to May 1, 2020. The deadline for most T1 returns remains June 1, 2020. Note that some returns and payments will still be due at the usual time.

 

5) DEFERRAL OF GST/HST AND CUSTOMS DUTIES ON IMPORTS

Businesses, including self-employed individuals, may defer all Goods and Services/Harmonized Sales Tax (GST/HST) and customs duties owed for imports until June 30, 2020. It is unclear whether GST/HST returns will have to be filed while the deferral is in effect.

 

6) INCOME TAX OBJECTIONS

For any objection request due March 18 or later, the deadline is extended until June 30, 2020.

 

7) DEFERRAL OF B.C. PROVINCIAL TAX PAYMENTS

Effective immediately, B.C. is extending filing and payment deadlines for the following taxes until September 30, 2020:

  • Employer Health Tax;

  • Sales taxes

    • Provincial sales tax (including municipal and regional district tax);

    • Carbon tax;

    • Motor fuel tax; and

    • Tobacco tax

 

8) DELAYED PST BUDGET 2020 TAX CHANGES

The following tax changes will be postponed until further notice:

  • Eliminating the PST exemption for carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners

  • Expanded registration requirements for Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunication services

 

​

SUPPORT FOR CANADIAN WORKERS

 

1) CANADA EMERGENCY RESPONSE BENEFIT (CERB)

The CERB replaces previously announced EI programs and is intended to be simpler and more accessible to Canadians.

 

To support workers and help businesses retain their employees, the CERB is a non-taxable benefit of $2,000 per month payable to workers who lose their income as a result of the COVID-19 pandemic, for a period of up to four months. The CERB applies to the following individuals who are at least 15 years of age, resident in Canada in 2019 and had a total income of at least $5,000 from employment or self-employment in either 2019 or in the 12 months immediately preceding their application:

​

  • Employees that earned a wage;

  • Contractors;

  • Self-employed individuals who would not otherwise be eligible for Employment Insurance (EI); and

  • Workers who are still employed, but are not receiving income because of disruptions to their work due to COVID-19.

 

Individuals eligible for the CERB are those individuals above that:

  • Lost their job;

  • Are sick;

  • Are quarantined;

  • Are taking care of someone that is sick with COVID-19; or

  • Are parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.

 

A person will be eligible if work ceased for at least 14 consecutive days within the four-week application period. Important! The Benefit is only available to individuals who stopped work as a result of reasons related to COVID-19.

If you have stopped working because of COVID-19, you should apply for the Canada Emergency Response Benefit, whether or not are eligible for Employment Insurance. The Benefit is available for the period from March 15, 2020 to October 3, 2020. If you are already claiming EI, there are factors to consider. See CRA link below.

Applications will go live April 6, 2020, with the goal of the CERB payments being received within 10 days from the date of application. The CERB will be paid every four weeks and will be available retroactively from March 15 to October 3, 2020.

 

Action NOW:

 

https://www.canada.ca/en/services/benefits/ei/cerb-application/questions.html

​

2) B.C. EMERGENCY BENEFIT FOR WORKERS

The B.C. Emergency Benefit for Workers will provide a one-time $1,000 payment to people who lost their income because of COVID-19. Those eligible to receive federal Employment Insurance or the CERB are eligible. Applications for the payment will be open soon.

 

3) GOODS AND SERVICES TAX

A one-time special payment will be paid by early May 2020 through the Goods and Services Tax Credit (GSTC). This will double the maximum GSTC payment amounts for the 2019-2020 benefit year. The average amount received for those eligible will be up to $400 for single individuals, and $600 for couples.

 

4) CANADA CHILD BENEFIT (CCB)

The maximum CCB will increase by $300 per child for the 2019-2020 benefit year.

 

5) REGISTERED RETIREMENT INCOME FUNDS (RRIFS)

For 2020, the required minimum withdrawals from RRIFs will be reduced by 25% in recognition of volatile market conditions and impact to retirement plans.

 

6) CLIMATE ACTION TAX CREDIT

Provides a one-time enhancement to the climate action tax credit for low-income to moderate families, paid in July 2020. An adult will receive up to $218 (increase from $43.50) and a child will receive $64.00 (increased from $12.75).

 

7) RENTERS, HOMEOWNERS, AND PEOPLE EXPERIENCING HOMELESSNESS

Legislation still requires that tenants pay rent in full and on time. However, the pandemic temporarily suspends a landlord’s ability to end a tenancy if a tenant does not pay the rent in full and on time. Note however, that a tenant who has not paid rent could face eviction once the pandemic is over.

 

Funding for housing supports will be increased to ensure people can maintain their housing in the event of job or income loss. The new rental supplement will offer up to $500/month toward their rent and will be available to low-to-moderate income renters who are facing financial hardship as a result of the COVID-19 crisis, but do not qualify for existing rental assistance programs. The supplement will be paid directly to landlords..

 

https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/covid-19#temporary-rent

 

8) B.C. STUDENT LOANS

Starting March 30, 2020, B.C. student loan payments are automatically frozen for six months.

 

9) MONTHLY BILLS

 

10) STREAMLINED SERVICES THROUGH EMPLOYMENT AND SOCIAL DEVELOPMENT CANADA

For information pertaining to streamlined services and other matters relating to Employment and Social Development Canada, visit the link:

https://www.canada.ca/en/employment-socialdevelopment/corporate/notices/coronavirus.html#web-notice

bottom of page