The lockdown measures that have been implemented across the globe for COVID-19 currently affect four out of every five workers in the global workforce.
The economic impact of the coronavirus is yet to be seen or fully understood, but Canadian businesses are already struggling. The goods news is that the Government of Canada has taken measures to help employers as best they can.
If you’re a business owner, you should know what measures have already been implemented to help you. Whether you need help with taxes or paying wages, there’s likely a plan in place for you.
Keep reading to learn all about the COVID 19 relief measures for Canadian businesses.
Canada Emergency Wage Subsidy (CEWS)
As of mid-April, the CEWS program will be a 12-week program in place from March 15 to June 6.
Eligible businesses include those that have seen their gross revenues drop by at least 15 percentage points in March and who expect a drop of 30 percentage points in April and May. It includes individuals, taxable corporations, non-profit organizations, registered charities, as well as partnerships with eligible employees.
For these businesses, the Government will subsidize 75% of employee’s wages, to a maximum of $847 per week.
Public bodies are not eligible for this subsidy. That includes municipalities, Crown corporations, universities, colleges, schools, and hospitals.
Temporary Wage Subsidy
The temporary wage subsidy applies to:
- non-profit organizations
- registered charities
- individuals (excluding trusts)
- CCPSs with a taxable capital employed in Canada for the 2019 taxation year less than $15 million
- partnerships with members including individuals (excluding trusts), CCPCs, o registered charities
The subsidy is 10% of the total remuneration paid between March 18 and June 20. The cap on this amount is higher than the CEWS, at $1,375 per employee. Employers are subsidized to a maximum of $25,000.
Extended Work-Sharing Program
COVID-19 has led to a reduction in business activity across many sectors. The Work-Sharing Program helps employers avoid layoffs when this occurs.
This program provides EI to employees who agree to reduce their working hours and share the work that is available during times of low productivity. It also allows employers to retain experienced employees and avoid the cost of training new employees
If you have employees that are eligible for EI and who agree to reduce their working hours, this program is now extended from 38 weeks to a maximum of 76 weeks.
Changes to Canada Summer Jobs Program
The Government has made changes to the Canada Summer Jobs Program that includes an increased wage subsidy. This wage subsidy will give private and public sector employers 100% of the minimum hourly wage for employees employed under this program.
The end date for employment under this program has been extended to February 28, 2021. Staff can also be hired on a part-time basis with adapted job activities and potential projects.
Changes to Tax Law
General Sales Tax (GST) and Harmonized Sales Tax (HST) are taxes paid on almost all goods and services in Canada. These apply to every step of the supply chain, including vendors and retailers.
The Canada Revenue Agency (CRA) expects these payments by the end of March 2020. However, changes to tax law have extended this due date. Businesses and self-employed individuals can defer these payments until June 30, 2020. The customs duty owing to the Canada Border Services Agency has also been extended to this date.
Businesses will also be allowed to defer the payment of income tax until August 31, 2020. This applies to income tax amounts that become owing between March 18 and September of this year. In addition, businesses will not see any interest or penalties accrue on these amounts.
Collections and Audits
The CRA has also made changes in response to COVID-19. They’ve announced that collections activities on any new debts accrued during this time will be suspended. They will also make flexible payment arrangements available to businesses.
In the case that your business cannot comply with a tax obligation, you may also submit a request to the CRA. That request may help you waive any penalties or interest accrued.
New audits will not be taking place during this time either. In fact, any interaction between taxpayers and auditors is temporarily suspended. That includes audits that were in progress before the COVID-19 relief measures were implemented.
Business Credit Availability Program
The Government of Canada is working closely with private sector lenders at this time. They’re trying to create credit solutions for businesses. As a result, they’ve created the Business Credit Availability Program (BCAP).
The BCAP makes $40 billion available through the Business Development Bank of Canada and Export Development Bank. The program begins in mid-April. It includes two specific programs.
There is a loan guarantee for small and medium-sized enterprises that gives operating credit and cash flow term loans to SMEs. These loans can be as much as $6.25 million.
There is also a co-lending program for small and medium-sized enterprises as well. This involves co-lend term loans to improve operating cash flow. Businesses qualifying for these loans can get incremental credit amounts as high as $6.25 million.
Canada Emergency Business Account (CEBA)
For even more loan options, the CEBA program offers interest-free loans. These are as high as $40,000 and they help small businesses and not-for-profits. The loans are intended to help cover operating costs.
The CEBA will start mid-April. To find out if your eligible, you should work with the current financial institution you work with. However, as a general rule, you’ll have to show that you paid between $50,000 and $1 million in payroll in the 2019 working year.
Business Help Beyond COVID 19 Relief Measures
The coronavirus affects many companies across a variety of sectors. Fortunately, the Government of Canada’s COVID 19 relief measures can help businesses of all sizes with everything from wages to paying taxes and covering operating costs. And there may be more help on the way in the coming months.
In this time of uncertainty, reaching your business goals is more difficult than ever. Contact us to find out how we might help.