How the Government is Helping Businesses During COVID-19

Published on April 17, 2020

The Team at KBFP Chartered Professional Accountants would like to provide some information on what businesses are doing in response to the current health crisis, and also provide and update on information that has been released to date.

Businesses are faced with tough decisions these days and find themselves having to pivot and reinvent themselves quickly. Preservation of cash is necessary. CRA tax measures will assist during this stressful time bit its also important to review historical financials statements. For instance reviewing expenses the other day with a client we discussed having employees stop the use of the 407 ETR, for a while any way, as roads are not congested. A 5 year review of your financials is recommended. We can provide you with a 5 year summary if necessary. Another exercise would be to do a 6 month cash flow to highlight short term cash needs.

Businesses and individuals should be connected to government through the CRA portals. This allows you to update direct deposit information so receipt of funds is faster.

The following is a list of measures provided by all levels of government. These may or may not be applicable to your specific situation.

Temporary Wage Subsidy

The subsidy will be a 10% deduction when submitting payroll deductions
Most payroll providers have updated and are putting this into effect

For further information on the wage subsidy follow this link.

Canada Emergency Wage Subsidy

The subsidy will cover 75% of salary up to the first $58,700 earned by an employee up to $847 a week.
Businesses who have seen at least a 30% decrease in gross revenue

For further information on the Wage Subsidy follow this link.

Business Credit Availability Program

Canada Emergency Business Account

The new Canada Emergency Business Account will provide interest-free loans of up to $40,000 to small businesses and not-for-profits,
To qualify, these organizations need to demonstrate they paid between $20,000 to $1,500,000 in total payroll in 2019.

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 be available three weeks after March 27 and interested businesses should work with their current financial institutions. Some will be ready the week of April 6th.

The Business Development Bank (BDC) can assist you if you are either an entrepreneur or a small business with these three options. To contact the BDC, either reach them at their financing request page or through their toll-free contact number at 1-877-232-2269 (Monday to Friday, from 7:30 a.m. to 8:00 p.m. Saturday and Sunday from 9:00 a.m. to 5:00 p.m.).

The Export Development Canada is designed to assist exporting companies with relief options. You can reach them by emailing tradeadvisor-conseiller@edc.ca, calling 1-800-229-0575 between 9 a.m. and 5 p.m. ET, or submitting an inquiry online.

Employment Insurance

The Government of Canada has announced a monthly Canada Emergency Benefit. The Canada Emergency Response Benefit (CERB) is a taxable benefit that will provide:

CERB provides $2,000 a month, for up to four months, for workers who lose their income as a result of the COVID-19 pandemic.
This program is specifically aimed at workers who would not normally be eligible for EI.
Visit the government website to learn more about dates etc CERB.

Tax Assistance

Deferral of Sales Tax Remittance
Businesses, including self-employed individuals, can now to defer the following until June 30, 2020

Payments of the Goods and Services Tax/Harmonized Sales Tax (GST/HST)
Customs duties owing on their imports.
The deferral will apply to GST/HST remittances for the February, March and April 2020 reporting periods for monthly filers;
The January 1, 2020 through March 31, 2020 reporting period for quarterly filers;
For annual filers, the amounts collected and owing for their previous fiscal year and installments of GST/HST in respect of the filer’s current fiscal year.
For GST and customs duty payments for imported goods, the deferral will include amounts owing for March, April, and May.

Deadline Extensions

The 2020 tax deadline has been extended to June 1st, 2020.
Payment deadline for those who owe taxes has been deferred until after September 1, 2020.

The Government of Canada has launched a dedicated page for Canadian businesses to provide them with the information and resources to navigate the challenges of COVID19 which can be accessed here.

Additional resources:

The Government has changed rules on the Work-Sharing Program. Details here
Cutting taxes for employers through a temporary increase to the Employer Health Tax (EHT) exemption.
WSIB deferral of payments here
Most all municipalities have deferred personal and commercial property taxes so check their websites.

There is a lot of information out there and so recommend to attend online information sessions and continue to ask questions. This is the time we all look for guidance and will continue to support each other. If you are interested in online sessions please let us know and we will add you as they come up.

Please reach to anyone on our team and we will get you the answers you need.

On behalf of our entire team, we hope that you and your family continue to stay safe.