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
- Wage Subsidies
- Canada Emergency Rent Subsidy (CERS)
- EI Work-Sharing Program
- Financing - Canada Emergency Business Account (CEBA)
- Ontario COVID-19 Response
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: 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
You are required to submit a self-identification form if you were eligible to receive the Temporary Wage Subsidy (even if you did not claim the subsidy). See this website for more details. https://www.canada.ca/en/revenue-agency/services/subsidy/temporary-wage-subsidy/tws-reporting.html
Please reach out to a member of the Roth Mosey team if you have any questions. We’re here to help!
COVID-19: Canada Emergency Wage Subsidy (CEWS)
The Canada Emergency Wage Subsidy provides a subsidy to employers who have seen a drop in revenue due to COVID-19. This subsidy is available from March 15th and varies depending on the amount of revenue decline for each period.
Various elections are available which may be used to maximize your subsidy claim.
To learn more about this program visit https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-frequently-asked-questions.html
The CRA has provided a calculator to assist in calculating the subsidy, which can be found here https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-calculate-subsidy-amount.html
Applications for this program are due the later of January 31, 2021 or 180 days after the end of the qualifying period.
Canada Emergency Rent Subsidy (CERS)
- A subsidy that provides rent and mortgage support from September 27, 2020 depending on the revenue decline.
- Is calculated using similar calculations to that of the Canada Emergency Wage Subsidy ("CEWS") and offers certain elections that can be filed to maximize the claim.
- A top-up Canada Emergency Rent Subsidy of 25 per cent for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65 per cent subsidy.
- To learn more about the program visit - https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-rent-subsidy.html
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/services/work-sharing/notice-covid-19.html
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 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 to:
- Have eligible non-deferrable expenses between Canadian $40,000 and Canadian $1,500,000. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities and insurance. Expenses will be subject to verification and audit by the Government of Canada.
- Filed an income tax return with the CRA with a tax year ending in 2019 or, if its tax return for 2019 has not yet been submitted, 2018.
An additional interest-free loan of up to $20,000 will be available (in addition to the original CEBA loan of $40,000). Half of this additional financing would be forgivable if repaid by December 31, 2022.To apply, please contact your primary lender.
- Deadline December 31, 2020
Alternatively, please contact your Roth Mosey advisor to discuss the financing options available to you. We’re here to help!
COVID-19: Ontario COVID-19 Response
Ontario Regional Opportunity 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
- The government proposes to permanently change the EHT Exemption limited from $490,000 to $1,000,000 for 2020 and going forward.
Introduction of the Ontario Senior's Home Safety Tax Credit
- This temporary personal income tax credit would be refundable to provide support to eligible claimants whether or not they owe income tax for 2021. This credit would support seniors who stay in their homes by assisting with improvements that make their homes safer and more accessible.
- More details can be found here - https://budget.ontario.ca/2020/annex.html#section-2