Federal and provincial support for businesses impacted by COVID-19
- April 15, 2020
The global coronavirus pandemic has put a pause on the world’s economy, creating unprecedented concerns for shop owners and their employees. The following is a list of support programs put in place to help keep businesses solvent during this crisis.
TO APPLY FOR FEDERAL PROGRAMS, START AT CANADA.CA. FOR PROVINCIAL PROGRAMS, GO TO THE PROVINCE’S WEBSITE.
Canada Emergency Wage Subsidy
The federal government enacted the Canada Emergency Wage Subsidy (CEWS) to support employers and protect jobs. The subsidy lasts 12 weeks (March 16 to June 6) and covers 75 per cent of an employee’s wages—up to $847 per week—for employers of all sizes and across all sectors who have suffered a drop in gross revenues of at least 15 per cent in March 2020, and 30 per cent in April and May.
CEWS applies to individuals, taxable corporations and partnerships consisting of eligible employers, non‑profit organizations and registered charities. Employers eligible for the CEWS may receive a 100-per-cent refund for employees who are on leave with pay for certain employer contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan.
Temporary 10 per cent Wage Subsidy
This three-month measure allows eligible employers to reduce the amount of payroll deduction required to be remitted to the Canada Revenue Agency (CRA). To be eligible for this program you must be one of the business types in the list below and pay salary, wages, bonuses, or other remuneration to an eligible employee, and you have an existing business number and payroll program account with the Canada revenue Agency. Eligible employers include:
- individuals (excluding trusts)
- non-profit organizations
- registered charities
- Canadian-controlled private corporations eligible for the small business deduction
Canada Emergency Business Account
The new Canada Emergency Business Account provides interest-free loans of up to $40,000 to help cover operating costs for small businesses and not-for-profits during a period where their revenues have been temporarily reduced. To qualify, organizations must demonstrate they paid between $50,000 to $1 million in total payroll in 2019. Apply for this support through your current bank or credit unions.
Access to credit
The Business Credit Availability Program (BCAP) makes available $40 billion 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 the Loan Guarantee for Small and Medium-Sized Enterprises, which is operated by EDC along with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to small and medium sized companies. The Co-Lending Program for Small and Medium-Sized Enterprises is operated by BDC along with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements. Eligible businesses can access incremental credit amounts of up to $6.25 million. Businesses in need of this program must start this process with their current financial institutions.
Deferred tax payments
All businesses are able to defer payment of any income tax amounts owed “on or after March 18 and before September 2020” until after August 31, 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these deferments.
Summer Jobs Program
The Canada Summer Jobs program will be in full swing, with some changes. The wage subsidy has been increased so employers will receive up to 100 per cent of the provincial or territorial minimum hourly wage for each employee. The employment end date was extended to February 28, 2021 and you can hire students on a part-time basis.
For your employees
The federal government has provided a taxable benefit of $2,000 a month for up to four months to eligible workers who have lost their income due to COVID-19. Your employees can begin the application process at Canada.ca, where they will answer a few simple questions to channel them to the service option.
Provincial Support for Businesses
- Reducing electricity bills for small business consumers through a $1.5 billion increase in electricity cost relief compared to the 2019 Budget. Electricity prices for time-of-use customers kept at off-peak price for 45 days
- Five-month interest and penalty-free period to make payments against many provincially administered taxes
- Employer Health Tax (EHT) exemption increased from $490,000 to $1 million for 2020, meaning more than 90 per cent of private-sector employers would not pay EHT in 2020.
- Workplace Safety and Insurance Board (WSIB) is allowing employers to defer payments for six months
- Emergency aid program for small and medium-sized enterprises provides up to $50,000 and is determined on the basis of justified and reasonable expenses when companies face a substantial reduction in the capacity to deliver products or have supply chain problems. Businesses must demonstrate that cash flow problems are caused by the lockdown.
- The Incentive Program to Retain Essential Workers (IPREW) adds to the Canada Emergency Response Benefit (CERB) and eligible workers can apply for the program online beginning on May 19. The program provides $100 each week dated back to March 15, 2020 and extending for a maximum of 16 weeks. Payments are made bi-weekly starting May 27, 2020.
- Corporate income tax balances and instalment payments due between March 18, 2020 and August 31, 2020 are deferred until August 31, 2020. Due dates for filing corporate income tax returns due after March 18, 2020 and before June 1, 2020 have been extended to June 1, 2020.
- Small, medium and large private sector employers can defer WCB premium payments until 2021. For small and medium businesses, the government will cover 50 per cent of the 2020 premium when it is due in 2021. Large employers will have their 2020 WCB premium payments deferred until 2021, at which time their premiums will be due.
- One-time $1,000 payment for B.C. residents whose ability to work has been affected due to COVID-19
- Extending filing and payment deadlines until September 30, 2020 for the Employer Health Tax, Provincial sales tax, Carbon tax, Motor fuel tax and Tobacco tax, while Carbon tax rates will not increase until further notice.
- $1.5 billion in economic stimulus once the pandemic has passed
- The Saskatchewan Small Business Emergency Payment (SSBEP) provides a one-time grant for small and medium-sized enterprises directly affected by government public heath orders related to COVID-19. Grants will be paid based on 15 per cent of a business's monthly sales revenue, to a maximum of $5,000.
- Businesses unable to pay PST will have three-month relief from penalty and interest
- Public utilities will allow zero-interest bill deferral for up to six months
- No interest or penalties for Manitoba Hydro, Centra Gas, Workers Compensation Board and Manitoba Public Insurance (MPI) and no disconnections from utilities.
- No interest on education property tax deferrals
- Commercial landlords could be eligible for up to a maximum of $50,000 per landlord and $15,000 per tenant if you can’t recover rent deferred due to implications of the COVID-19 public health crisis
- Up to 100 per cent of the cost to a maximum of $2500 to engage a professional business consultant for advice on how to adapt or recover from the lockdown.
- Workers may receive a one-time lump sum payment of $750 of taxable emergency income replacement.
- A Special Situation fund for business that have experienced urgent income loss as a result of COVID-19 and are not eligible for other federal and provincial funding support.
- Small businesses, non-profits, charities and social enterprises may be eligible for a one-time grant equal to 15 per cent of revenue from sales, either from April 2019 or February 2020, up to a maximum of $5,000
- Payments deferred until June 30 for all government loans, small business fees.
- Small businesses which supply the government will be paid within five days instead of 30 days
Other notable programs
- N.B. is offering businesses capital loans to assist employers with working capital loans up to a maximum of $1 million
- Eligible Yukon businesses which have faced a minimum of 30 per cent loss in gross revenue from March 23, 2020, to May 22, 2020 will receive between 75 and 100 per cent of their fixed costs up to a maximum of $30,000 per month
- The Northwest Territories is offering low interest loans to businesses to help offset up to one month of COVID-19 impacts, as well as deferrals of any NWT Business Development and Investment Corporation (BDIC) loan payments for up to three cumulative months between April 1, 2020 and September 30, 2020, with no penalty or additional interest charges