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Government Programs to assist Businesses and Employers during the COVID-19 Pandemic
09/04/20

Last updated on April 7, 2020

RGD highlights the programs introduced by the Government of Canada to assist businesses and employers as they cope with the economic impact of the current crisis.

 

Canada Emergency Wage Subsidy

The Emergency Wage Subsidy provides wage subsidies of up to 75% on the first $58,700 of an employee’s wage, back-dated to March 15, 2020, with no per-employer maximum, to any business that is not publicly-funded and has experienced a decrease in gross revenues of at least 30% as compared to the same month in 2019. 

 

The subsidy will expire after three months and employers are required to re-apply for the subsidy on a monthly basis and in doing so will have to show again that its revenues are 30% less than the same month in 2019.

 

Employers will not be able to claim the Canada Emergency Wage Subsidy in respect of remuneration paid to an employee in a week that falls within a four-week period for which the employee is eligible for the Canadian Emergency Response Benefit.

 

Temporary Wage Subsidy

Temporary Wage Subsidy of 10%, capped at $1,375 per employee and $25,000 per employer was announced prior to Canada Emergency Wage Subsidy. Employers who do not qualify for the Canada Emergency Wage Subsidy may still qualify for and avail themselves of the Temporary Wage Subsidy for Employers.  

 

Employers that qualify for both subsidies will have their Canada Emergency Wage Subsidy reduced by the amount paid under the Temporary Wage Subsidy for Employers in the same period. 

 

Canada Emergency Business Account

The Canada Emergency Business Account 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 the organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.
 
Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).
 
This program will roll out in mid-April. Small businesses and not-for-profits should contact their financial institution to apply for these loans.
 

A New Co-Lending Program for Small and Medium Enterprises

Through the co-lending program, Business Development Bank of Canada (80%) together with financial institutions (20%) will provide term loans to SMEs for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts up to $6.25 million.
 
 

A New Loan Guarantee for Small and Medium Enterprises

EDC will provide guarantee of up to 80%, on loans extended by financial institutions to SMEs as operating credit and cash flow term loans up to $6.25 million
 

Income tax

For corporations, the tax return filing date has been extended to June 1, 2020. This is applicable to corporations that would otherwise have a filing due date after March 18 and before June 1, 2020. 

 

For self-employed people (and their spouse or common law partner), the tax return filing date remains unchanged from June 15, 2020.

 

Penalties and interest will not be charged if the deferred payment requirements are met by September 1, 2020. 

 

For filing dates for  individuals, trusts, charities, partnerships and others, click here. 

 

GST/HST

GST/HST payments can now be made until June 30, 2020

  • Monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods
  • Quarterly filers have to remit amounts collected for the January 1, 2020 through March 31, 2020 reporting period
  • Annual filers, whose GST/HST return or instalment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.

 

Sources: WeirFoulds LLP, Editors Canada, Government of Canada Website

 

Stay tuned for our next article where we will highlight Government Programs to assist employees, freelancers and self-employed business owners.

 

This article is purely informational in nature and should not, in anyway, be construed as expert advice. Please contact your lawyers, accountants or relevant government institutions for any queries.

 

Our legal partners, WeirFoulds LLP have established a COVID-19 resources portal. 

 

You can also call Ontario’s Stop the Spread Business Information Line at 1-888-444-3659. 

 

Learn about additional business support from the Canadian government.