Below we have provided details and links for several of the more relevant Canadian government assistance programs related to COVID-19.
We would encourage you to review the details below and then give your Roth Mosey contact a call to develop a plan to access these programs, in order to both prepare yourself and your business for the challenges in the coming months, and also be positioned well for the opportunities that will undoubtedly follow this crisis.
List of Topics Covered
- Tax Payment and Filing Extensions
- Wage Subsidies
- EI Work-Sharing Program
- Canada Emergency Response Benefit (CERB)
- Financing - Canada Emergency Business Account (CEBA)
- Ontario Regional Opportunity Investment Tax Credit
- Canada Emergency Commercial Rent Assistance (CECRA)
In addition to the above, numerous other federal and Ontario tax measures have been introduced, with details available here: https://www.canada.ca/en/department-finance/economic-response-plan.html and https://news.ontario.ca/mof/en/2020/3/ontarios-action-plan-responding-to-covid-19.html
Please also consider contacting your insurance provider. Your existing insurance policies may provide some coverage for business interruption. The ability to make a claim will vary depending on the nature of your policy and the specifics of your circumstances.
COVID-19: Tax Payment and Filing Extensions
Many tax filing deadlines and tax payment deadlines have been extended.
For up to date income tax filing and payment deadlines, please visit: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html
Please note that:
- Tax payment extensions only apply to income tax owing under Part I of the Income Tax Act. Certain refundable taxes applicable to dividends earned by private corporations are not subject to this deferral. Income tax due date extensions do not apply to installments and balances that were due before March 18, 2020. If you have an outstanding tax balance from before March 18, 2020, please contact your Roth Mosey advisor to discuss your options.
GST/HST payments due on or after March 27, 2020 and before June 2020 are now due on June 30, 2020. For more information, please visit: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-gst-hst.html
Many other tax payment deferrals have also been announced recently, including, but not limited to customs duty payments, EHT, WSIB, Ontario retail sales tax, and certain property taxes.
The Ontario Government has also increased the employer health tax exemption to $1 million for 2020. For more information, please visit: https://www.fin.gov.on.ca/en/bulletins/eht/eht-exemption-2020.html
If you have an upcoming personal or business government tax remittance due and are uncertain as to whether or not to pay the amount, please contact your Roth Mosey advisor to discuss whether a payment deferral may be available. We’re here to help!
COVID-19: 10% Temporary Wage Subsidy
The 10% 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. For corporations to qualify, they must be a Canadian-controlled private corporation eligible for the small business deduction.
The subsidy is equal to 10% of the remuneration paid from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee, and a maximum of $25,000 total per employer.
For more information, including a full list of eligible employers, please visit: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html
The following template may assist you in calculating and tracking this wage subsidy: https://www.taxtemplates.ca/wage-subsidy/
Please reach out to a member of the Roth Mosey team if you have any questions. We’re here to help!
COVID-19: 75% Canada Emergency Wage Subsidy (CEWS)
The Canada Emergency Wage Subsidy provides a subsidy for 75% of an employee’s pre-crisis remuneration up to a maximum benefit of $847 per week. This program is generally available when an employer’s arm’s length revenue decreased 15% in March or 30% in April to August when comparing to same month in 2019, or the average of January and February 2020 revenue. This subsidy is generally available to all employers, with the exception of public bodies.
A 100% refund for employer-paid contributions to Employment Insurance (EI) and the Canada Pension Plan (CPP) is available for eligible employees that are on leave with pay.
To learn more about this program, please visit https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html
Applications for this program will be available on April 27, 2020 and must be completed by September 30, 2020.
COVID-19: EI Work-Sharing Program
Work-Sharing is a program that helps employers and employees avoid layoffs when there is a temporary decrease in business activity beyond the control of the employer. The program provides Employment Insurance (EI) benefits to eligible employees who agree to reduce their normal working hours and share the available work while their employer recovers. Work-Sharing is an agreement between employers, employees and the Government of Canada, with employee and government approval required.
Please note, for employers and employees that are participating in a Work-Sharing program, EI benefits received by employees through the Work-Sharing program reduce the benefit that their employer is entitled to receive under the Canada Emergency Wage Subsidy.
For more information and temporary measures for the EI Work-Sharing Program during COVID-19, please visit: https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html#h4.01
The EI Work-Sharing fact sheet for employers regarding EI Work-Sharing can be found here: https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus/employers-factsheet.html
COVID-19: Canada Emergency Response Benefit (CERB)
The Canada Emergency Response Benefit provides a benefit of $2,000/month ($500/week) for individuals who have ceased working due to COVID-19.
For more information, and to determine whether you qualify, please visit: https://www.canada.ca/en/services/benefits/ei/cerb-application/questions.html
In order to apply for the CERB, please visit: https://www.canada.ca/en/services/benefits/ei/cerb-application.html
If you or your staff return to work and want to repay CERB payments that they were not entitled to, they can do so by following the instructions at the bottom of this link https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html
If you are an owner manager and believe you may be eligible for both the Canada Emergency Response Benefit and the Emergency Wage Subsidy please contact your Roth Mosey advisor to discuss which program may be right for you. We’re here to help!
COVID-19: Canada Emergency Business Account (CEBA)
The Canada Emergency Business Account is a $40,000 interest-free loan to pay for immediate operating costs such as payroll, rent, utilities, insurance, property tax, or debt service. It is available to many Canadian employers with $20,000 to $1.5 million in total payroll in 2019, with forgiveness of up to $10,000 of the loan available if repaid by December 31, 2022.
For more information on this and other lending programs, please visit: https://ceba-cuec.ca/
Expanded eligibility criteria has been added for applicants with payroll lower than $20,000, who would need:
- a business operating account at a participating financial institution;
- a Canada Revenue Agency 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 could include costs such as rent, property taxes, utilities, and insurance.
To apply, please contact your primary lender.
Alternatively, please contact your Roth Mosey advisor to discuss the financing options available to you. We’re here to help!
COVID-19: Ontario Regional Opportunity Investment Tax Credit
The Ontario government is proposing to introduce a new 10 per cent refundable corporate income tax credit for investment in constructing, renovating or acquiring eligible commercial and industrial buildings and other eligible assets.
This tax credit would be available for Canadian controlled private corporations investing in specified regions of Ontario.
For more information, please visit: https://budget.ontario.ca/2020/marchupdate/annex.html#section-3
COVID-19: Canada Emergency Commercial Rent Assistance (CECRA)
The Canada Emergency Commercial Rent Assistance Program (CECRA) will be providing forgivable loans to qualifying commercial property owners to cover 50% of April, May, and June 2020 rent payments that are payable by eligible small business tenants.
- The property owner needs to agree to reduce the eligible small business tenants’ rent by at least 75% for April, May, and June 2020 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.
- The small business tenant needs to be paying less than $50,000 per month in rent and have temporarily ceased operations or have experienced at least a 70% drop in pre-COVID-19 revenues.
- This support will also be available to non-profit and charitable organizations.
- A rent forgiveness agreement would be required between the property owner and tenant.
Of note, while a 75% forgiveness of rent is required to qualify for CECRA, only a 50% forgivable loan is available. Therefore, property owners are committing to a 25% net reduction in rental revenue as a result of utilizing this program.
Applications portal will open up May 25th and must be filed by August 31, 2020
More information on the CECRA can be found here: https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business