1. Deferred Payments
(1) More Time to Pay Income Taxes
The Government of Canada is allowing all
businesses to defer, until after 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.
(2) Deferral of Sales Tax Remittance and Customs Duty Payments
The Government of Canada is allowing businesses, including self-employed individuals, to defer until June 30, 2020 payments of the GST/HST, as well as customs duty owing on their imports.
Any GST/HST payment that becomes owing from March 27 until the end of May can be deferred until the end of June. 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 (CRA) and the Canada Border Services Agency as early as the end of March 2020.
2. Wage Subsidy
(1) Canada Emergency Wage Subsidy (CEWS)
The Canada Emergency Wage Subsidy (CEWS) supports employers that are hardest hit by the pandemic and protect the jobs Canadians depend on.
The subsidy generally covers 75% 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% in March, and 30% in April and May. The program will be in place for a 12-week period, from March 15 to June 6, 2020.
Please note that for employers that are eligible for both the
CEWS and the 10% Temporary Wage Subsidy for a period, any benefit from the
Temporary 10% Wage Subsidy for remuneration paid in a specific period will
generally reduce the amount available to be claimed under the CEWS in that same
(2) Temporary 10% Wage Subsidy
The Temporary 10% Wage Subsidy is a
three-month measure that will allow eligible employers to reduce the amount of
payroll deduction required to be remitted to the Canada Revenue Agency (CRA). You are an eligible employer
if you are a (n):
(a) individual (excluding trusts),
registered charity, or
Canadian-controlled private corporation (including a cooperative corporation) eligible for the small business deduction;
(b) have an existing business number and payroll program account with the CRA on March 18, 2020; and
(c) pay salary, wages, bonuses, or other
remuneration to an eligible employee.
Note: Partnerships are only eligible for the subsidy if their members consist exclusively of individuals (excluding trusts), registered charities, or Canadian-controlled private corporations eligible for the small business deduction.
3. Access to Credit
(1) Business Credit Availability Program (BCAP)
The Government of Canada established a Business
Credit Availability Program (BCAP) to provide additional support through the
Business Development Bank of Canada (BDC) and Export Development Canada (EDC).
This program includes:
(a) Loan Guarantee for Small and Medium-Sized Enterprises
Through the Business Credit Availability Program, Export Development Canada (EDC) is working with financial institutions to guarantee 80% of new operating credit and cash flow term loans of up to $6.25 million to small and medium-sized enterprises (SMEs).
This financing support is to be used for operational expenses
and is available to both exporting and non-exporting companies.
(b) Co-Lending Program for Small and Medium-Sized Enterprises
Through the Business Credit Availability Program, Business Development Canada (BDC) is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements. The program offers differing maximum finance amounts based on business revenues.
Financed amount is 80 % provided by BDC and 20 % provided by
your financial institution. This support is available until or before September
(2) Canada Emergency Business Account (CEBA)
The 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 during a period where their revenues have been temporarily reduced.
To qualify, these organizations will need to demonstrate they
paid between $20,000 to $1.5 million in total payroll in 2019. Business owners
can apply for support from the Canada Emergency Business Account through their
banks and credit unions.
(3) Canada Emergency Commercial Rent Assistance (CECRA)
The Government of Canada reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. This program will lower rent by 75 per cent for small businesses that have been affected by COVID-19.
The program will provide forgivable loans to qualifying commercial property owners to cover 50% of three-monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.
The loans will be forgiven if the mortgaged property owner agrees to reduce the small business tenants’ rent by at least 75% under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25% of the rent.
Impacted small business tenants are businesses paying less
than $50,000 per month in rent and who have temporarily ceased operations or
have experienced at least a 70% drop in pre-COVID revenues. This support will
also be available to non-profit and charitable organizations.
It is expected that CECRA will be operational by mid-May, and further details will be announced soon.