Business Support (COVID-19)
COVID-19 Federal Economic Initiatives for Businesses
April 22nd, 2020
**This document is valid at time of writing and subject to change as programs evolve. Please contact MP John Barlow’s office or Canada.ca for updates or changes.**
If you are a business in Foothills:
The Foothills Business Recovery Taskforce was developed by M.P. John Barlow, M.L.A. Roger Reid, and key regional stakeholders to give our business community hope and support through the COVID-19 global pandemic.
The Foothills Business Recovery Taskforce formed to support the business community throughout the journey of the COVID-19 pandemic. We have established a collaborative strategic direction for stakeholders throughout the Foothills region through the development of local community entrepreneurial ecosystems. We are stronger and more impactful together. The Taskforce aims to address the unique challenges that this crisis has imposed on not only the individual businesses but also local and regional business communities.
New Loan Programs for Businesses
Canada Emergency Business Account
To ensure that small businesses have access to the capital they need to see them through the current challenges, the Government of Canada has launched the new Canada Emergency Business Account, which has been implemented by eligible financial institutions in cooperation with Export Development Canada (EDC).
This $25 billion program provides interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus.
This will better position them to quickly return to providing services to their communities and creating employment.
Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).
Small businesses and not-for-profits should contact their financial institution to apply for these loans.
- The Borrower is a Canadian operating business in operation as of March 1, 2020.
- The Borrower has a federal tax registration.
- The Borrower’s total employment income paid in the 2019 calendar year was between Cdn.$20,000 and Cdn.$1,500,000.
- The Borrower has an active business chequing/operating account with the Lender, which is its primary financial institution. This account was opened on or prior to March 1, 2020 and was not in arrears on existing borrowing facilities, if applicable, with the Lender by 90 days or more as at March 1, 2020.
- The Borrower has not previously used the Program and will not apply for support under the Program at any other financial institution.
- The Borrower acknowledges its intention to continue to operate its business or to resume operations.
- The Borrower agrees to participate in post-funding surveys conducted by the Government of Canada or any of its agents.
Business Credit Availability Program (BCAP)
The federal government has established a Business Credit Availability Program (BCAP) to provide $40 billion of additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). BDC and EDC are working with private sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation, exports and tourism.
This program includes two elements, the Loan Guarantee for Small and Medium Sized Enterprises, and the Co-Lending Program for Small and Medium Sized Enterprises.
Loan Guarantee for Small and Medium Sized Enterprises
EDC is working with financial institutions to 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
BDC is working with financial institutions to 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.
These programs will roll out in mid-April and interested businesses should work with their current financial institutions.
New Business Wage Subsidy Programs
The Canada Emergency Wage Subsidy
Goal: To help businesses keep and return workers to their payroll through the challenges posed by the COVID-19 pandemic. This would provide a 75 per cent wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020.
Eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non-profit organizations and registered charities This subsidy would be available to eligible employers that see a drop of at least 15 per cent of their revenue for March or 30% of their revenue in April and May. In applying for the subsidy, employers would be required to attest to the decline in revenue.
Amount of Subsidy
The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:
• 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
• the amount of remuneration paid, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration, whichever is less.
Emergency Wage Subsidy Example: Bruno and Tisha run a floral shop in Burnaby, British Columbia. They have four full time employees, each earning $800 per week, and 6 part-time employees, each earning $400 per week, for a total weekly payroll of $5,600. Bruno and Tisha have closed their shop and are only fulfilling online orders during this challenging period. They are keeping all of their employees on the payroll, paying them their full regular wages, despite their revenues being down by 15 per cent in March (or 30% in April or May). Bruno and Tisha would be eligible for a weekly wage subsidy of $4,200 ($600 for each of their full-time employees and $300 for each of their part-time employees).
Applications for CEWS open on Monday, April 27th.
Canada Emergency Commercial Rent Assistance (CECRA)
The federal government intends to introduce the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses that, will seek to 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 (retroactive), May, and June.
Implementation of the program will require a partnership with provincial and territorial governments who are responsible for property owner-tenant relationships.
What is it?
- The Canada Emergency Commercial Rent Assistance (CECRA) program will provide small businesses, non-profits, and charities a 75% reduction in their rent payments for the months of April (retroactive), May, and June.
- The program will provide forgivable loans to qualifying commercial property owners to cover 50% of the eligible rent payments. The loans will be forgiven if the property owner agrees to reduce the eligible small business tenants’ rent by at least 75% and agrees not to evict the tenant.
Who is eligible?
- Those paying less than $50,000 in monthly rent.
- Those who have temporarily ceased operations or have experienced at least a 70% drop versus pre-COVID-19 revenues.
How to apply?
- Details are yet to be released. The Canada Mortgage and Housing Corporation (CMHC) is administering the program on behalf of the federal, provincial, and territorial governments.
Assisting innovative and early-stage businesses
The Federal Government is investing $250 million to assist innovative, early-stage companies that are unable to access other COVID-19 business supports through the Industrial Research Assistance Program (IRAP).
IRAP provides advice, connections, and funding to help Canadian small and medium-sized businesses increase their innovation capacity and take ideas to market.
Regional Relief and Recovery Fund (RRRF)
The COVID-19 pandemic has already had significant impacts on businesses, workers and communities across the country.
The Government of Canada recognizes this and will be there to support you during and after the crisis. That’s why we have created the Regional Relief and Recovery Fund.
Nearly $1B in support to affected businesses and communities
The Fund will help to:
- mitigate the financial pressure experienced by businesses and organizations to allow them to continue their operations, including paying their employees;
- support projects by businesses, organizations and communities to prepare now for a successful recovery.
This initiative is implemented by the six regional development agencies, which are familiar with their regions’ economic realities and are often the first point of contact for people at the local level.
This initiative includes two components:
- $675 million to support regional economies, businesses, organizations and communities in regions all across Canada;
- $287 million to support the national network of Community Futures Development Corporations, which will specifically target small businesses and rural communities across the country.
Small and medium-sized businesses unable to access other support measures
The Government of Canada is providing $675 million to give financing support to small and medium-sized businesses that are unable to access other COVID-19 business supports, through Canada’s Regional Development Agencies.
Refund for Certain Payroll Contributions (new April 8)
The Government is proposing to expand the CEWS by introducing a new 100 per cent refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. This refund would cover 100 per cent of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim for the CEWS for those employees.
In general, an employee will be considered to be on leave with pay throughout a week if that employee is remunerated by the employer for that week but does not perform any work for the employer in that week. This refund would not be available for eligible employees that are on leave with pay for only a portion of a week.
This refund would not be subject to the weekly maximum benefit per employee of $847 that an eligible employer may claim in respect of the CEWS. There would be no overall limit on the refund amount that an eligible employer may claim.
For greater certainty, employers would be required to continue to collect and remit employer and employee contributions to each program as usual. Eligible employers would apply for a refund, as described above, at the same time that they apply for the CEWS.
Eligibility would generally be determined by the change in an eligible employer’s monthly revenues, year-over-year, for the calendar month in which the period began.
• For example, if revenues in March 2020 were down 50 per cent compared to March 2019, the employer would be allowed to claim the Canadian Emergency Wage Subsidy (as calculated above) on remuneration paid between March 15 and April 11, 2020.
The Government announced on April 8th that all employers would be allowed to calculate their change in revenue using an alternative benchmark to determine their eligibility. This would provide more flexibility to employers for which the general approach may not be appropriate, including high-growth firms, sectors that faced difficulties in 2019, non-profits and charities, as well as employers established after February 2019. Under this alternative approach, employers would be allowed to compare their revenue using an average of their revenue earned in January and February 2020. Employers would select the general year-over-year approach or this alternative approach when first applying for the CEWS and would be required to use the same approach for the entire duration of the program
ABC Inc. is a start-up that started its operations last September. It reported revenues of $100,000 in January and $140,000 in February, for a monthly average of $120,000. In March, its revenues dropped to $90,000. Because revenues in March are 25 per cent lower than $120,000, ABC inc. would be eligible for the CEWS for the first claiming period. To be eligible for the following claiming period, ABC Inc. revenues would have to be $84,000 or less for the month of April (that is, 30 per cent lower than $120,000).
The amount of wage subsidy (provided under the COVID-19 Economic Response Plan) received by the employer in a given month would be ignored for the purpose of measuring year-over-year changes in monthly revenues. For example, if revenues in March 2020 were down 20 per cent compared to March 2019, the employer would be allowed to claim the CEWS (as calculated above) on remuneration paid between March 15 and April 11, 2020.
Alternatively, this employer could use its average revenue from the months of January and February 2020, instead of March 2019, to determine if it is eligible for the CEWS.
Once an approach is chosen, the employer would have to apply it throughout the program period.
How to Apply
Eligible employers would be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. More details about the application process will be made available shortly.
Interaction with 10% Wage Subsidy
On March 18, 2020, the Prime Minister announced a temporary 10% wage subsidy. For employers that are eligible for both the Canada Emergency Wage Subsidy and the 10% wage subsidy for a period, any benefit from the 10% wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period.
Extending the Work-Sharing Program
Extending the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks. The Work-Sharing program is offered to workers who agree to reduce their normal working hours because of developments beyond the control of their employers.
CFIB Supporting Businesses
CFIB is offering advice and assistance to businesses navigating all of this. CFIB has opened their Helpline to all business owners including non-CFIB members for advice on managing COVID-19 situations in the workplace.
To talk to an expert, please call them at 1-888-234-2232.
Mortgage and Loan Deferrals
Financial Institutions have made a commitment to work with personal and small business banking customers on a case-by-case basis to provide flexible solutions to help them manage through challenges such as pay disruption due to COVID-19; childcare disruption due to school closures; or those facing illness from COVID-19.
This support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products.
Individual Canadians or business owners facing hardship are encouraged to contact their bank directly to discuss options that could be available to them.
CRA Deferrals – Income Tax Filing & Payment
Deferral of GST Sales Tax Remittance
Deferral of Goods and Services Tax/Harmonized Sales Tax (GST/HST) remittances and customs duty payments to June 30, 2020.
CRA will extend until June 30, 2020 the time that:
• Monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods;
• Quarterly filers have to remit amounts collected for the January 1, 2020 through March 31, 2020 reporting period; and
• Annual filers, whose GST/HST return or instalment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.
Deferral of Customs Duty and Sales Tax for Importers
Imported goods by businesses are generally subject to the GST, at a rate of 5 per cent, as well as applicable customs duties, which vary by product and country of origin. While most imports enter Canada duty-free, some tariffs remain, especially on consumer goods.
Payment deadlines for statements of accounts for March, April, and May are being deferred to June 30, 2020.
Individuals – Due dates
Filing date for 2019 tax year June 1, 2020 extended
Payment date for 2019 tax year September 1, 2020 extended
Includes the June 15, 2020, instalment payment for those who have to pay by instalments.
Self-employed and their spouse or common law partner – Due dates
Filing date for 2019 tax year June 15, 2020 unchanged
Payment date for 2019 tax year September 1, 2020 extended
Includes the June 15, 2020, instalment payment for those who have to pay by instalments.
Corporations – Due dates
Filing date for current tax year June 1, 2020 extended
Applies to corporations that would otherwise have a filing due date after March 18 and before June 1, 2020.
Payment date for current tax year September 1, 2020 extended
Applies to balances and instalments under Part 1 of the Income Tax Act due on or after March 18 and before September 1, 2020.
Trusts – Due dates
Filing date for current tax year (including the associated T3 information return) May 1, 2020 extended
Applies to trusts with a tax year end date of December 31, 2019 June 1, 2020 extended
Applies to trusts that would otherwise have a filing due date in April or May.
Payment date for current tax year September 1, 2020 extended
Applies to income tax balances and instalments due on or after March 18 and before September 1, 2020
Charities – Due dates
Filing date December 31, 2020 extended
Applies to charities with Form T3010 due between March 18, 2020 and December 31, 2020
Part XIII non-resident tax – Due dates
Filing date for the 2019 NR4 information return May 1, 2020 extended
The 15th of each month following an amount paid or credited by residents of Canada to non-resident persons. unchanged
Payroll remittances – Due dates
See Payroll page for filing deadlines. unchanged
Filing date for the 2019 T5013 Partnership Information Return May 1, 2020 extended
Filing date for the 2019 NR4, Statement of Amounts Paid or Credited to Non-Residents of Canada information return May 1, 2020 extended
Other information returns June 1, 2020 extended
Applies to other information returns that would otherwise be due after March 18, 2020, and before June 2020.
CRA Administrative Measures
In addition to remittance & payment deferrals, CRA has implemented other measures:
• Collections activities on new debts suspended until further notice, and flexible payment arrangements will be made available
• CRA will generally not contact SME businesses to initiate any post assessment GST/HST or income tax audits for the next 4 weeks, and interaction with taxpayers will be limited to high risk and exceptional cases
• Objections related to Canadians’ entitlement to benefits and credits have been identified as a critical service and should not experience any delays
• For objections related to other tax matters filed by individuals and businesses, the CRA is currently holding these accounts in abeyance. No collection action will be taken with respect to these accounts at this time.
• For objections that are due March 18, 2020 or later, CRA is are effectively extending the deadline to June 30, 2020.
• For appeals before the Tax Court of Canada, they have ordered the extension of all timelines prescribed by the rules of that Court while it is closed for business until March 30, 2020. More information can be obtained from the TCC.
• Penalties and interest will not be charged if the deferred payment requirements are met by September 1, 2020.
BDC Oil and Gas Sector Financing
- For Canadian-based oil and gas producers, oilfield service companies and midstream providers
- Funds to be used for operational cashflow and business continuity purposes
- Qualifying businesses must have been financially viable prior to the current economic environment
- Loan size between $15 million and $60 million
- Offered at commercial rates, repayable within 4 years
The temporary changes to the Canada Summer Jobs Program for this year include:
- Increasing the wage subsidy from 50% to 100% of the provincial or territorial minimum hourly wage for each employee.
- Extending the end date for employment to February 28, 2021.
- Allowing employers to adapt their projects and job activities to support essential services.
- Allowing employers to hire staff on a part-time basis.
- Organizations providing essential services and that could provide youth jobs but did not apply for the program this year could be able to participate (details to come).
I have applied. How will the updates affect my business if I am approved in May?
- Private and public sector employers can now receive up to 100% of the provincial or territorial minimum hourly wage for each employee instead of the previous 50%.
- Employers will be allowed to hire staff on a part-time basis
- Agreed upon contract can be extended to February 28, 2021
- I have not applied to this program, but I am an essential service who could really benefit from this program. How will the updates affect my business?
- Local MPs will be able to recommend businesses they deem as an essential service in their communities for consideration to be late applicants into the CSJ Program
- Government has not announced if there will be an application system available to date. If you would like your local MP to consider you, we encourage you to write them a letter explaining your situation as an essential service and how this program could benefit you and your community.
COVID-19 Federal Program Information: https://www.canada.ca/en/department-finance/economic-response-plan.html
Wage Subsidy: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html
CRA Measures: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html
CERB Application: https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html
CERB FAQs: https://www.canada.ca/en/services/benefits/ei/cerb-application/questions.html
Business Credit Availability Program (BCAP): https://www.canada.ca/en/department-finance/programs/financial-sector-policy/business-credit-availability-program.html