Since mid-March, many economic measures have been announced in support of Canadian businesses. Some of the details of these programs have changed since their initial announcement and may continue to evolve as the needs of Canadians and Canadian businesses are better understood. The following is a snapshot of Federal and Ontario COVID-19 relief programs as of today, April 6th, 2020, as we currently understand them. We will continue to update you as additional information and clarification is made available.
Canada Emergency Wage Subsidy (CEWS)
CEWS would provide a 75% wage subsidy to eligible employers – up to $847 a week per employee for up to 12 weeks – retroactive to March 15, 2020 and ending June 6, 2020, with no overall employer limit. Eligible employers include individuals, corporations, partnerships, non-profit organizations and registered charities that experience a drop of at least 30% of arm’s length revenue over the reference periods. Employers would need to apply online each benefit period through the CRA’s My Business Account portal. This application is not yet available, but additional details are expected shortly. If you have not yet registered your business and set up direct deposit through the CRA’s My Business Account online portal – this is the time to do so.
Temporary Wage Subsidy
The originally announced Temporary Wage Subsidy (TWS) continues to be available. TWS is manually calculated and equal to 10% of salaries paid – up to $1,375 per employee and a maximum of $25,000 per employer. Once the TWS has been calculated for the applicable pay period, an employer can reduce their payroll remittance by the exact amount of the TWS, to a maximum of $25,000. Note that any amount claimed under the TWS will reduce an employer’s Canada Emergency Wage Subsidy (CEWS) claim.
Business Credit Availability Program (BCAP)
Two BCAP programs are available: the Canada Emergency Business Account and the SME Loan and Guarantee program:
- Canada Emergency Business Account: Provides interest-free loans of up to $40,000 to small businesses and not-for-profits. Organizations will need to demonstrate that they paid between $50,000 to $1 million in total payroll in 2019. Repaying the loan on or before December 31, 2022 will result in loan forgiveness of 25% (up to $10,000).
- SME Loan and Guarantee program:
- EDC may guarantee new operating credit and cash flow term loans issued by financial institutions to SMEs up to $6.25 million.
- The Co-Lending Program will bring the BDC together with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts up to $6.25 million.
BCAP programs will roll out in the three weeks after March 27, and interested businesses will need to work directly with their current financial institutions to apply.
More information on BCAP can be found at: https://www.canada.ca/en/department-finance/programs/financial-sector-policy/business-credit-availability-program.html
Work-Sharing Program Temporary Special Measures
Effective March 15, 2020 to March 14, 2021, the maximum possible duration of a work-sharing agreement has been extended from 38 weeks to 76 weeks, and the mandatory cooling off period has been waived. Eligibility has been expanded to include businesses that have operated for only 1 year (vs. 2 years), and the need to provide sales/production figures has been eliminated. Note that Work Sharing arrangements still require an application to be filed 30 days in advance of the start of the program.
Additional information is available at: https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html
WSIB Ontario – Financial Relief
Ontario businesses are able to defer their WSIB premium reporting and payments for the period starting March 25, 2020 and ending August 31, 2020. All businesses who report and pay monthly, quarterly or annually, are eligible for this deferral. No interest will accrue on outstanding premium payments and no penalties will be charged during this six-month deferral period.
Additional information is available at: https://www.wsib.ca/en/financialrelief
Employer Health Tax Exemption Increasing in Ontario
The Ontario government is proposing to retroactively raise the EHT exemption from $490,000 to $1 million for 2020. The exemption would return to its current level of $490,000 on January 1, 2021.
Full details can be found at: https://budget.ontario.ca/2020/marchupdate/annex.html?_ga=2.63749743.1394078305.1585233394-292096888.1579285868#section-1
CRA filing deadlines
The CRA has extended the majority of tax-related deadlines.
GST/HST and Customs Duties Remittance Deferral
The Minister of National Revenue has extended the payment deadline for GST/HST – and customs duties owing on imports – until June 30, 2020. GST/HST returns still need to be filed on time, but the CRA has stated that it won’t impose penalties where a return is filed late provided that it is filed by June 30th.
Canada Emergency Response Benefit (CERB)
NOTE: CRA will start accepting CERB applications through an online portal on April 6th: https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html
CERB represents a taxable benefit of $500 per week, for up to 16 weeks, for workers who have stopped working because of COVID-19 (and have not voluntarily quit their job) or are eligible for EI regular or sickness benefits. The benefit applies to workers who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application. Certain owner-managers may now also qualify for the CERB if they received dividend income of at least $5,000, paid out of corporate income taxed at the small business rate.
CERB will be paid every four weeks and the initial benefit payment should be received within 5 to 10 days of application. People who are normally eligible for employment insurance (EI) can continue to apply through Service Canada, and they will automatically be enrolled for the CERB.
Full details on the Canada Emergency Response Benefit can be found at: https://www.canada.ca/en/services/benefits/ei/cerb-application.html
S+C Partners is OPEN FOR BUSINESS
S+C Partners is committed to helping our clients, our staff, and our community during this difficult time and our team is ready to assist you with navigating the challenges posed by this crisis.
Please call us at 905-821-9215 or email us at tax@scpllp.com with any questions.