Through the Covid response, times are certainly tougher for some than others. Businesses are not immune to the new world order of social distancing and are struggling to stay afloat.
There is support and assistance from the government available, and the information on this support seems to change on a daily basis.
Here is what we have compiled so far:
Business Wage Subsidy
Businesses that had a payroll account on March 18, 2020 with employees employed in Canada may be eligible for a 10% wage subsidy for the three-month period of March 18 – June 19, 2020.
There is a maximum of $1,375 per employee and $25,000 per employer. Manual subsidy calculation by employer, reduces monthly remittance to CRA, the reduction cannot exceed Federal Tax portion of remittance (unused subsidy can be carried forward to next monthly remittance). The wage subsidy received by the employer would be considered government assistance and included in the employer’s taxable income.
Canada Emergency Wage Subsidy
Eligible employers who suffer a drop of arm’s length income of more than 30% in March, April or May 2020 compared to the same month in 2019 can apply through Canada Revenue Agency’s, My Business Account online portal. Subsidy will be on the first $58,700 earned by employees – there will be a special rule restricting the amount available for non arm’s length employees.
Employees who were eligible for the CERB would not be eligible. The wage subsidy received by the employer would be considered government assistance and included in the employer’s taxable income. It is recommended for employers to set up direct deposit to speed the receipt of funds.
All business income tax payments are deferred until after August 31, 2020, the amount of income tax that became owing on or after March 18 and before September 2020 can be deferred. This relief applies to instalments as well as balances owing under part 1 of the Income Tax Act. HST payments as well as customs duty owing on imports that became owing between March 27 and end of May can be deferred until end of June. Returns must still be submitted when due.
Canada Emergency Business Account
Small business and not-for-profit with a 2019 payroll between $20,000 and $1.5 million may qualify for up to $40,000 interest free loan. Repayment of the loan on or before December 31, 2022 will result in loan forgiveness of 25%. Details regarding application process will be provided by financial institutions.
Business Credit Availability Program
The program is targeted to small and medium sized business to further support financing in the private sector through the Business Development Bank and Export Development Canada. Eligible business may obtain incremental credit amounts up to $6.25 million with co-lending through BDC.
Individuals with 2019 income in excess of $5,000 may qualify for the Canada Emergency Response Benefit of $2,000 a month for up to 4 months. Although tax returns due date of June 15, 2020 has not been extended payment date has been extended to September 1, 2020.
If you have not yet applied for assistance and believe you can qualify, please make your intentions known to the government sooner rather than later. The help provided will not get you back to the financial situation you enjoyed prior to this crisis, but it will help.
You can review updates to any support benefits here:
Wishing you and your families well through these difficult times.