Resources for Small Businesses impacted by COVID-19

Updated: May 19, 2020

NOTE:

  1. On July 17, the government announced changes to the Canadian Emergency Wage Subsidy (CEWS). Key changes are:
    1. CEWS extended until December 19, 2020;
    2. CEWS to apply to companies that experienced LESS THAN a 30% decline in revenues;
    3. An additional top-up of up to 25% for employers who were hit especially hard. Additional program details can be found here.
  2. Tax Templates has released a really great calculator to help you calculate the CEWS, access it here.

The remainder of this article has NOT been updated since the original CEWS was released.


We ware entering uncharted territory together and many small business owners are worried about the future of their business and their ability to support their employees. We want to make sure that private company owners are aware of the assistance that is available to them, as well as their obligations during these trying times.

So here is our list of available resources for Private Company and Small Business owners who are trying to navigate the uncertainty that the Coronavirus is bringing.

We are right here with you and will try to help you however we can. If you need someone to talk to, please don’t hesitate to call us at 403-271-3106. No obligations, just people looking after people.

NOTE: We’re trying our best to keep this up-to-date, however, things are changing daily. Please refer to the links included in this blog for the most up-to-date information.

Here’s a list of what Canada’s entrepreneurs need to know during the Coronavirus Pandemic:

  • Federal Government Support for Private Companies:
    • 10% wage subsidy, up to $1,375 / employee, $25,000 / employer (accessed by reducing payroll withholding remittances)
    • 75% Canadian Emergency Wage Subsidy (CEWS)
    • Canada Emergency Business Account 
      • $40k, Government Guaranteed Loan delivered through your bank
      • For “Qualifying Businesses”
      • Interest-free for 1-year
      • Up to $10k (25%) if which is eligible for complete forgiveness if it is repaid before December 31, 2022.
      • If it can’t be repaid by December 31, 2022, it converts into a 3-year term with interest at 5%.
      • Operating company registered in Canada
      • Accessed through the bank that holds your primary operating account, company must have a business account at a participating financial institution:
      • May 19, 2020: there is no longer a threshold of salaries which must be paid.
      • May 19, 2020 companies must have ‘eligible, non-deferable expenses between $40k-$1.5< (per annum? or which they need help covering with a loan? Need more details on this).
      • Launched June 26, 2020: “To qualify under the expanded eligibility rules, CEBA applicants with payroll lower than $20,000 will need:
        – A business operating account at a participating financial institution;
        – A Canada Revenue Agency business number;
        – A 2018 or 2019 tax return; and
        – Eligible non-deferrable expenses of between $40,000 and $1.5 million.” https://www.canada.ca/en/department-finance/news/2020/06/more-small-businesses-can-soon-access-the-canada-emergency-business-account.html?fbclid=IwAR1cunTTMhAeX8TVB6AQTr9cUsUMFcaqEPax6XB1s_HD_KozRyxhScq5Ks8
    • Canada Emergency Commercial Rent Assistance
      • Operational by mid-MAY, for April, May and June 2020 Rent.
      • Eligible small businesses pay less than $50k/month in rent AND have had at least a 70% drop in ‘pre-COVID” revenues or have ceased operations Not sure what this means, possibly similar to CEWS revenue test? This is a big % drop. If you’re not effectively shut down – you’re out on this one). Also, what about OpCosts / NNN?
      • The landlord must agree to reduce rent by at least 75% for three corresponding months
      • The landlord’s (mortgage) lender will issue ‘loan’ for 50% of the rent, meaning Tenant pays 25%, Landlord pays 25%, 50% is loaned to Landlord, which is forgiven (covered) by the Government. So if I’m a landlord and have no mortgage? Looks like you *might be* out of luck which will have adverse impacts on some tenants in those buildings -unfortunately.
      • ‘no eviction’ terms will be attached during the ‘term’ of the loan
      • Program is administered through the CMHC
    • Western Economic Diversification Canada – Regional Relief and Recovery Fund (RRRF)
      • Funding requests under $40k
        • Canadian incorporated companies with < 500 employees
        • Were denied funding under the CEBA
        • Suffered financially due to COBID
        • Operational at March 1, 2020
        • Similar repayment and forgiveness terms to the CEBA (above)
      • Funding requests over $40k and up to $1M
        • For Canadian incorporated companies with revenues < $10M, or a VC Funded startup;
        • Fewer than 500 employees
        • Must have applied for funding elsewhere like the BDC or the CDC’s credit program.
        • Targeted for companies with operations in Western Canada, and those that intend to continue there.
        • No principle repayments until 2023, then the loan assumes a 3-year term.
        • No forgiven amounts
    • Access to capital via the Business Development Bank of Canada (BDC):
      • Government Guaranteed Operating credit (term-loans) up to $6.25M
      • Small Business Loan: Up to $100,000 can be obtained online.
      • A working capital loan up to $2 million: Get extra funds to bridge cash flow gaps and support everyday operations.
      • Purchase Order Financing: Increase your cash flow to fulfill domestic or international orders with very flexible terms.
      • Flexible payment terms, principle deferrals of up to 6-months for existing BDC clients.
      • No GST/HST Post-assessment reviews or Audits for the next 4-weeks (ending April 15th)
      • Generally – CRA Audit interaction will be temporarily suspended
      • $65 Billion in emergency business loans (including the CEBA)
      • Expanding the work-sharing program to 76-weeks from 36-weeks. Apply here. Here is a link to a great article explaining the program. (Thank you, Hugh Neilson, of Video Tax News).
      • No announcement of GST filing deadline extensions (as of March 18, 2020)
    • Canada Summer Jobs Program is being changed to (based on PM announcement April 8 – still need details):
      • Subsidize 100% of student wage – hire a student!
      • Part-time work will now be allowed
      • Job end date will be pushed into the winter. Currently ends August 28.

“If you have stopped working because of COVID-19, you should apply for the Canada Emergency Response Benefit, whether or not are eligible for Employment Insurance. The Benefit is available for the period from March 15, 2020 to October 3, 2020.

Starting April 6, 2020, there will be a single portal to assist you with the application process.

Until then, Canadians who are eligible for Employment Insurance and who have lost their job can continue to apply for Employment Insurance.

If you applied for EI regular or sickness benefits on March 15, 2020 or later, your claim will be automatically processed through the Canada Emergency Response Benefit.

In addition, for other EI benefits, including maternity, parental, caregiving, fishing and work sharing, you should also continue to apply.” 

    • Top up to Canada Child Tax Benefits ($300 / child) paid in May 2020. This is based on 2018 income tax amounts, so there is no need to rush your 2019 personal tax return for this benefit
    • One-time (automatic) payment by early May 2020 through the Goods and Services Tax credit for low- and modest-income families. The average additional benefit will be ~$400 for single individuals and ~$600 for couples, extra ~$150 for each child < 19 years of age who lives with you. This payment is based on your 2018 income tax amounts, so there is no need to rush your 2019 personal tax return for this credit
    • Student loan repayment holiday. This is a 6-month, interest-free, moratorium on federal student loans (same for Alberta student loans)
    • Mortgage payment protection: The Canada Mortgage and Housing Corporation (CMHC) is working with lenders to help people who have trouble paying their mortgage. This might include:
      • Deferred mortgage payments
      • Capitalization of interest
      • Special payment arrangements

 

  • Tax filing deadline extension:
    • Canada (link): Individual Tax Return (T1) deadline is extended to June 1 (if you have business income on your T1 your deadline appears to be unchanged and is June 15).
    • Canada (link): Trust Tax Returns (T3) with a taxation year ending on December 31, 2019, will be extended to May 1, 2020.
    • NEW: T5013 Partnership returns and NR4 Non-resident tax withholding forms are extended to May 1, 2020
    • NEW: T2 Corporate tax returns due between March 18, 2020 and June 1, 2020 are extended to June 1, 2020
    • United States (link): The 2019 income tax filing and payment deadlines for all taxpayers who file and pay their Federal income taxes on April 15, 2020, are automatically extended until July 15, 2020. Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. You will automatically avoid interest and penalties on the taxes paid by July 15.
  • Tax payment holiday (All TAXPAYERS – individuals, trusts and corporations): 
    • All income taxes that become due between March 18, 2020, and September 1, 2020, will have until September 2020, to pay those balances.
    • This includes Income Tax (Part 1 tax) and Instalments.
    • GST payments deferred until June (waiting on details March 27)
    • No announcement to defer Part IV tax (as of March 18, 2020)
    • No announcement to defer Part XIII withholding taxes (as of March 18, 2020)

 

 

 

  • Government of Alberta measures (link)
    • Changed the Employment Standards Code to include 14-day job-protected leave for employees who are required to self-isolate.
    • NOW CLOSED – For individuals who do not have access to EI (such as self-employed individuals and private company owners) and must self-isolate or care for a dependent who is required to self-isolate. This is a one-time payment of $1,146. Eligibility criteria and application details are listed here (link)
    • Corporate tax and Installment payments are deferred until August 31
    • Residents, agri-business and small business can defer utility payments for the next 90-days
    • WCB premiums are deferred until early 2021. When the balance becomes due, the government will cover 50% of it.
    • Student loan repayment holiday. This is a 6-month, interest-free, moratorium on Alberta student loans (same for federal).
    • Residential education property tax rates will be frozen at 2019 rates (as opposed to the planned 3.4% increase).
    • ATB Customers can apply for a deferral for their Loans, Lines of Credit, and Mortgages for up to 6-months.
    • Emergency Financial Assistance (link): Financial assistance for unexpected emergencies is available through the Emergency Needs Allowance. Here is a summary of the allowance rates. This allowance can cover costs for:
      • food
      • clothing
      • child care
      • transportation
      • damage deposit
      • temporary accommodation
      • utility arrears (once only)
      • eviction payments (once only)

The government of Canada has also posted a toolkit for private businesses here.

As we find more useful resources, we’ll add them to this list.

As always, please feel free to get in touch to talk about your small business or anything else that is troubling you.

We're in it with you. Let's talk