Last updated May 25, 2020

These resources have been summarized and full details are available from https://www.canada.ca/en/department-finance/economic-response-plan.html

Business Resources

As the government response is taking form and more details are made available, it looks like the application and management for a number of benefits will be done online.

We recommend that you set up the applicable government online accounts we have listed below.

For most of these accounts, the registration process involves the government mailing you a confirmation number before you can get access to all the features.

CRA My Account for Business (all businesses)

You'll be able to manage direct deposit on this online account.

You'll also be able to file returns (GST, T4, T5, etc.) electronically.

ROE Web (all businesses)

This allows you to file ROE electronically and also manager third party service provider who you want to do ROE for your organization.

Note that ROE's are due very quickly after an employee is laid off or terminated (5 days), and if you don't file an ROE on time, (a) your employee may not be able to apply for EI and may face unnecessary hardship, and (b) your business may be exposed to penalties up to $2,500 by Service Canada.

IMPORTANT


We have done our best to summarize all the programs available below. 

 

Given how quickly things evolve, we cannot guarantee that our summary below reflect the
latest information released by the government. 

For that reason, you'll find as part of each summary a the link to the most direct and complete official
government website available at the time of writing, and which should have the latest details for
each program. Please rely on those for full details.

Summary of Government Support for Business

The Canada Emergency Wage Subsidy (the 75% one) (Federal)


Official details and calculator here The federal government has legislated the new Canada Emergency Wage Subsidy that would cover 75 per cent of salaries for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. Employers of all sizes and across all sectors of the economy would be eligible with the exception of public sector entities. The application for this subsidy will open on April 27th. The government will start processing them on May 4th and start issuing payments on May 5th. 3,000 auditors have been assigned to review claims. You will be able to apply via CRA My Business Account or via a separate online application form (which will open on April 27th). Alternatively, if we are authorize as your representative, we'll be able to assist you and submit the application for your business. In the meantime, the government has provided a calculator (see link above) that you can use now to determine how much your business is eligible to receive in subsidies. Eligible Employers 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% of their revenue for the March 2020, and
  • 30% of their revenue for April and May 2020.
  • see Eligible Periods details below.
Once an employer meets the criteria in respect of a revenue decline, they would automatically meet the revenue decline criteria for the next period of the program. For example, an employer with a revenue drop of more than 15% in March would qualify for the first and second periods of the program, covering remuneration paid between March 15 and May 9. Calculating Revenues An employer’s revenue for this purpose would be its revenue from its business carried on in Canada earned from arm’s-length sources (that means revenue earned from unrelated, third party). Revenue would be calculated using the employer’s normal accounting method, and would exclude revenues from extraordinary items and amounts on account of capital. The government clarified that employers would be allowed to calculate their revenues under the accrual method or the cash method, but not a combination of both. Employers would select an accounting method when first applying for the CEWS and would be required to use that method for the entire duration of the program.
Special rules for the computation of revenue are provided to take into account certain non-arm's length transactions, such as where an employer sells all of its output to a related company that in turn earns arm's length revenue. As well, affiliated groups are able to compute revenue on a consolidated basis. Eligible Periods Eligibility would generally be determined by the change in an eligible employer’s monthly revenues:
  • Compared to year-over-year, for the calendar month in which the period began.
  • Compared to the average of 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. The amount of wage subsidy 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, 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.
  • If revenues in March 2020 were down 50% compared to March 2019; or
  • If revenue in March 2020 were down 50% compared to the average revenue earned for January and February 2020.
The table below outlines each claiming period and the period in which it has a decline in revenue for the year-over-year method (will update with the month-over-month method as soon as it is published). 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:
  1. 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
  2. The lower of:
    1. amount of remuneration paid, up to a maximum benefit of $847 per week; or
    2. 75% of the employee’s baseline (aka pre-crisis) weekly remuneration, whichever is less.
Even I, a CPA, need to go through an example to make sense of this. Let's say an employee was paid $1,000 per week pre-crisis, but agreed to reduce his weekly remuneration to $800 during the crisis. So greater of: 1. $600 (that 75% of $800 actually paid during the crisis), and 2. Lower of: a) $800 (that the remuneration actually paid during the crisis), and b) $750 (that's 75% of $1,000 pre-crisis weekly remuneration) The lower of $800 and $750 is $750 The greater of $600 and $750 is $750. So the subsidy would be $750 on $800 of weekly remuneration (gotta love how they write tax law). So, in effect, employers may be eligible for a subsidy of up to 100 per cent of the first 75 per cent of pre-crisis wages or salaries of existing employees. These employers would be expected where possible to maintain existing employees’ pre-crisis employment earnings. The baseline (aka pre-crisis) remuneration for a given employee means the average weekly eligible remuneration paid to the eligible employee by the business during the period that begins on January 1, 2020 and ends on March 15, 2020, excluding any period of seven or more consecutive days for which the employee was not remunerated. Eligible remuneration includes salary, wages, and other remuneration like commissions, fees and taxable benefits. These are amounts for which employers would generally be required to withhold or deduct amounts to remit to the Receiver General on account of the employee’s income tax obligation. However, it does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle. The subsidy is A special rule will apply to employees that do not deal at arm’s length with the employer (e.g. shareholder-manager, their spouse and children, and such). The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration. In other words, it's going to be the greater of 1) and 2.b) above. Employers will also be eligible for a subsidy of up to 75 per cent of salaries and wages paid to new employees. There would be no overall limit on the subsidy amount that an eligible employer may claim. Eligible employees An eligible employee is an individual who is employed in Canada. Eligibility for the CEWS of an employee's remuneration is available to employees other than those who have been without remuneration for 14 or more consecutive days in the eligibility period, i.e., from March 15 to April 11, from April 12 to May 9, or from May 10 to June 6. This rule replaces the previously announced restriction that an employer would not be eligible to claim the CEWS for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit. Refund for Certain Payroll Contributions 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. 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. Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly. *** It's not clear that you will be able to get a representative to apply for you, so please register for My Business Account now if you don't have this already. Interaction with 10 per cent Wage Subsidy For employers that are eligible for both the Canada Emergency Wage Subsidy and the 10 per cent wage subsidy for a period, any benefit from the 10 per cent 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. Interaction with Work-sharing EI Benefit The 75% subsidy is reduced for EI amounts received by the employees under the Work-sharing benefit. Interaction with CERB and 75% Wage Subsidy No subsidy is available for an individual who is without remuneration by the eligible entity in respect of 14 or more consecutive days in the qualifying period. The Department of Finance backgrounder (updated April 11, 2020) noted that the Government will consider implementing an approach to limit duplication. This could include a process to allow individuals rehired by their employer during the same eligibility period to cancel their CERB claim and repay that amount. This would have to implemented in the future Anti-avoidance Multiple Employers in a Group The maximum subsidy that may be claimed in respect of an individual that is employed by multiple non-arm’s length employers, is limited to a claim that would be made as if they had one employer. Manipulation of Remuneration or Revenue There are anti-avoidance rules that prevent artificial increases in remuneration eligible for the subsidy. In addition, several rules have been proposed to target revenue manipulation that would entitle employers to the subsidy. Severe penalties will apply to the few who may seek to abuse the program. This includes a new 25% penalty for employers manipulating their revenues, as well as existing penalty of 50% of an excessive claim for false statements or gross negligence, or as much as a 200% fine and five years’ imprisonment for fraud/tax evasion. Government Assistance The usual treatment of tax credits and other benefits provided by the government would apply. As a consequence, the wage subsidy received by an employer would be considered government assistance and be included in the employer’s taxable income. Information to Be Communicated The government may communicate or otherwise make available to the public, in any manner that it considers appropriate, the name of any person or partnership that makes an application under the 75% wage subsidy.




Canada Emergency Business Account (CEBA) (the $40,000 interest free loan) (Federal)


Official details and updates here The CEBA loans program has been expanded to:

  • Sole owner-operators;
  • That depend on contractors; and
  • That are family businesses that pay employees by dividends rather than payroll.
In addittion, the CEBA will be modified to be available to new businesses (that have never filed a tax return) and businesses which do not have "business accounts" at the bank. Applicants with payroll of lower than $20,000 would need:
  • A business operating account at a participating financial institution
  • A CRA business number, and to have filed a 2018 or 2019 tax return; and
  • Eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses include costs such as rent, utilities and property taxes.
The new Canada Emergency Business Account ('CEBA') will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs that cannot be deferred and where their revenues have been temporarily reduced. The funds from the loan shall only be used by you to pay your non-deferrable operating expenses including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation. To qualify, these organizations will need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019. You'll also need to have a business chequing account with your financial institutions. You can only apply with one financial institution. 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 major banks are providing the detailed terms and conditions on their respective websites, some of the highlights being:
  • The application will need to be made online.
  • The purpose of the loan is to pay for operating costs that you are not able to defer as a result of Covid-19.
  • If the loan is not repaid by December 31, 2022, it will be extended for an additional 3-year term bearing an interest rate of 5% per year.
  • The loan can be prepaid at any time without penalty.
Further, as of April 9th, the following bank and credit unions have started accepting online applications: Please note that, as of April 18th, the CEBA application is not open yet for a number of Credit Unions. Some of the larger credit unions do have it and it continues being rolled out every day. Please visit your credit union's website for updates.




Extension to Work-Sharing Program (the work-some, collect-EI-some) (Federal)


Official details, update and application here The federal governent is 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. The measure provides income support to employees eligible for Employment Insurance (EI) benefits who work a temporarily reduced work week while their employer recovers.




More Time to Pay Income Taxes (the August 31, 2020 extension) (Federal)


Official details and updates here The federal government is allowing all businesses to defer, until August 31, 2020, the payment of any income tax amounts that become owing on or after March 18 and before September 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 amounts during this period.




Temporary Wage Subsidy (the 10% one) (Federal)


Official details and updates here The Temporary Wage Subsidy for Employers is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA). Eligible employers You are one of the following:

  • Individuals
  • Partnerships (Partnerships are only eligible for the subsidy if their members consist exclusively of individuals, registered charities, or Canadian-controlled private corporations (CCPCs) eligible for the small business deduction).
  • Non-profit organizations
  • Registered charities
  • Canadian Controlled Private Corporations who are eligible for the small business deduction
AND (1) you have an existing business number and payroll program account with the CRA on March 18, 2020 and (2) you pay salary, wages, bonuses, or other remuneration to an eligible employee (i.e. an individual who is employed in Canada). How much is the subsidy? The subsidy is equal to 10% of the remuneration you pay from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee and to a maximum of $25,000 total per employer. How is the subsidy paid? You do not need to apply for the subsidy. You will continue deducting income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums from salary, wages, bonuses, or other remuneration paid to your employees, as you currently do. The subsidy is calculated when you remit these amounts to the CRA. Once you have calculated your subsidy, you can reduce your current payroll remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy. IMPORTANT - You cannot reduce your remittance of CPP contributions or EI premiums. You must continue remitting the CPP contributions and EI premiums that you deducted from your employees, as well as your share of CPP contributions and EI premiums, to the CRA. For example, if you deducted $2,500 of income tax from your employees’ pay and calculated a subsidy of $2,050, you would reduce your current payroll remittance of federal, provincial, or territorial income tax by $2,050. You would remit $450 of income tax to the CRA. The remaining $2,050 that you keep would represent your subsidy. You could continue reducing the income tax on future payroll remittances, up to $1,375 for each eligible employee and to a maximum of $25,000 total per employer, for all remuneration paid on or before June 19, 2020. If the income taxes you deduct are not sufficient to offset the value of the subsidy in a specific period, you can reduce future payroll remittances to benefit from the subsidy. This includes reducing remittances that may fall outside of the application period for the wage subsidy (after June 19, 2020). When can I start reducing payroll remittances? You can start reducing payroll remittances of federal, provincial, or territorial income tax in the first remittance period that includes remuneration paid from March 18, 2020 to June 19, 2020.




Business Credit Availability Program (Federal)


When These programs will roll out in the three weeks after March 27 How Interested businesses should work with their current financial institutions. Who and What There are two sides to this program: Co-Lending Program for Small and Medium-Sized Enterprises To provide additional liquidity support for Canadian businesses, the Co-Lending Program will bring the Business Development Bank of Canada (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 BDC’s portion of this program is up to $5 million maximum per loan. Eligible financial institutions will conduct the underwriting and manage the interface with their customers. The potential for lending for this program will be $20 billion. New Loan Guarantee for Small and Medium Enterprises Small and medium-sized enterprises (SMEs) may be particularly vulnerable to the impacts of COVID-19. To support their operations, EDC will guarantee new operating credit and cash flow term loans that financial institutions extend to SMEs, up to $6.25 million. The program cap for this new loan program will be a total of $20 billion for export sector and domestic companies.




Deferral of Sales Tax Remittance (the GST/HST extension to June 30th) (Federal)


Official details and updates here The federal government will allow businesses, including self-employed individuals, to defer until June 30, 2020 payments of the Goods and Services Tax / Harmonized Sales Tax (GST/HST), as well as 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; and for annual filers, the amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year. For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May. These amounts were normally due to be submitted to the Canada Revenue Agency and the Canada Border Services Agency as early as the end of this month. Note that the deadline to file the GST/HST return is unchanged. Those who are able to, should continue to file their GST/HST returns on time reporting their net tax for the reporting period to help facilitate tax compliance and administration. However, recognizing the difficult circumstances faced by businesses, the CRA won’t impose penalties where a return is filed late provided that it is filed (and paid) by June 30th.




Deferral of Tax Payment (the PST & EHT extension to September 30th) (BC)


Official details and updates here B.C. is extending filing and payment deadlines for, among other, Provincial Sales Tax (PST) and Employer Health Tax (EHT) until September 30, 2020. Also, the following tax changes announced in Budget 2020 will be postponed until further notice:

  • Eliminating the PST exemption for carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners
  • Expanded registration requirements for Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunication services




BC Hydro Payment Deferral and Relief Fund (BC)


This is two separate programs offered by BC Hydro Payment Deferral Official details and updates here The COVID-19 Customer Assistance Program provides customers the option to defer bill payments or arrange for flexible payment plans with no penalty. Customers are encouraged to call BC Hydro's customer team at 1 800 BCHYDRO (1 800 224 9376) to discuss bill payment options. Relief Fund Official details and updates here If you own a small business that needed to close due to COVID-19, you may be eligible to have your business' electricity use charges waived for up to three months. The application is not open yet, but we expect it to open the week of April 13. Once it opens, there is no rush to apply. Eligible business customers can apply any time before June 30, 2020 to have their business' bills waived for April, May and June.




Canada Emergency Commercial Rent Assistance (CECRA) (Federal)


CECRA provides relief for small businesses experiencing financial hardship due to COVID-19. It offers unsecured, forgiveable loans to eligible commercial property owners to:

  • Reduce rent owed by their impacted small business tenants
  • Meet operating expenses on commercial properties
Property owners must offer a minimum of a 75% rent reduction for the months of April, May and June 2020. As part of the application, you must provide rent reduction agreement(s) and landlord tenant attestations. Once again, the government is staggering applications in order to manage the volume. They are asking property owners to register on the following days: Why should you apply for the CECRA for small businesses?
  • Your property depends on the sucess of your tenants.
  • If you have to replace a tenant, you end up paying a lot of the cash out
  • With CECRA, you still collect a portion of your gross rent
What do you need to apply? Attestations
  • Tenant or Sub-tenant’s Attestation:
    Property owners must have each of their eligible commercial small business tenants and/or subtenants sign an attestation. Tenants are responsible for attesting to their eligibility with the program requirements.
  • Property Owner’s Attestation:
    Property owners must sign an attestation confirming the information relating to the property owner and the property provided in the application is correct and attest to their eligibility with the program requirements.
Agreement
  • Rent Reduction Agreement:
    All application documents will be accessible on May 25, 2020. Property owners must enter into a legally binding rent reduction agreement with each impacted tenant to confirm the rent reduction in accordance with the program terms and conditions. This agreement is conditional upon final approval of the application for CECRA for small businesses.
  • Forgivable Loan Agreement:
    Property owners must agree to the terms and conditions in the application and outlined in the forgivable loan agreement.
Property owner and Tenant information
  • Property information including: property address, property type, property tax statement, latest rent roll for each property and the number of commercial units
  • Applicant information includes: banking information (including bank statement), property owner contact information, co-ownership information and contact details for co-owners
  • Tenant information includes: tenant contact information, registered business name, number of employees, consolidated revenues, lease area and the monthly gross rent for the period of April, May and June 2020
Who is eligible for the CECRA? To qualify for CECRA for small businesses, the commercial property owner must:
  • own commercial real property* which is occupied by one or more impacted small business tenants
  • enter (or have already entered) into a legally binding rent reduction agreement for the period of April, May and June 2020, reducing an impacted small business tenant’s rent by at least 75%
  • ensure the rent reduction agreement with each impacted tenant includes: a moratorium on eviction for the period during which the property owner agrees to apply the loan proceeds, and a declaration of rental revenue included in the attestation
The commercial property owner is not and is not controlled by an individual holding federal or provincial political office. CECRA will not apply to any federal-, provincial-, or municipal-owned properties, where the government is the landlord of the small business tenant. Exceptions
  • Where there is a long-term lease to a First Nation, or Indigenous organization or government, the First Nation or Indigenous organization or government is eligible for CECRA for small businesses as a property owner.
  • Where there are long-term commercial leases with third parties to operate the property (for example, airports), the third party is eligible as the property owner.
  • Also eligible are post-secondary institutions, hospitals, and pension funds, as well as crown corporations with limited appropriations designated as eligible under CECRA for small businesses.
How does it work? The program offers assistance for the months of April, May and June 2020.
  • Property owners can apply later and the program will be applied retroactively.
  • Propertyowners may still apply for assistance once the 3-month period has ended if they can prove eligibility during those months. The end date for applications is August 31, 2020.
  • Property owners must use the funds from CECRA for small businesses to refund amounts in excess of 25% paid by the small business tenant for the period or at the option of the impacted tenant apply rent paid in excess of 25% to future rent owing by the impacted tenant.*
*If rent has been collected at the time of approval, a credit to the tenant for a future month’s rent (i.e. July for April) is acceptable — if the tenant chooses this option. This can be a flexible 3-month period. Deadline The deadline to apply is August 31, 2020. CMHC (Canada Mortgage and Housing Corporation) will provide forgivable loans to eligible commercial property owners. Funds will be transferred to the property owner’s financial institution.
  • The loans will cover 50% of the monthly gross rent owed by impacted small business tenants during the 3-month period of April, May and June 2020.
  • The property owner will be responsible for no less than half of the remaining 50% of the monthly gross rent payments (paying no less than 25% of the total).
  • The small business tenant will be responsible for no more than half of the remaining 50% of the monthly gross rent payments (paying no more than 25% of the total)
Loan forgiveness CECRA for small businesses loans will be forgiven if the property owner complies with all applicable program terms and conditions — including to not recover forgiven rent amounts when the program is over.





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