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COVID-19: Quick Guide To Canadian Government Programs For Businesses

Photo by Nevin Thompson

Note: The information about government programs below is not comprehensive, and may change. Accordingly, please exercise due diligence.

 

As a result of the ongoing COVID-19 crisis, the federal government has launched a variety of resources for Canadian businesses. This page curates available information about COVID-19 for employers as of March 24, 2020. Updates to these programs will be made when possible, as well as links to resources for businesses and employers.

Federal Package for COVID-19 (So Far)

As of March 24, 2020, the federal government’s Canada COVID-19 Economic Response Plan outlines a variety of support businesses in Canada. A backgrounder provides a high-level summary of the plan for businesses.

 

The federal response so far can be sorted into several distinct “buckets”. Two of these buckets are generally aimed at employers, with other programs aimed at employees:

 

  1. Supports for Small Business
  2. Cash Flow and Loan Support (for businesses)
  3. Employee retention and expanded Employment Insurance

1. Federal Supports for Small Businesses

The federal fiscal package includes several supports for small businesses, including:

 

  • 10% wage subsidy (capped)
  • Deferral of taxes until later in 2020

 

Temporary Wage Subsidy

The 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 (CRA).

 

The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Read more >>

 

Note: This wage subsidy will be financed by allowing companies to reduce their remittance of income taxes (more below).

 

Business Tax Deferral Programs

No businesses will be contacted by The Canada Revenue Agency (CRA) regarding GST/HST or Income Tax audits until at least mid-April, 2020.

 

In addition, CRA will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. No interest or penalties will accumulate on these amounts during this period. Read more >>

Suspension of Requirements to PAY (RTP)
In addition to business tax referrals, effective immediately, the CRA will not be sending any RTP to employers:

  • For RTPs currently in place, remittances are not required, until further notice.
  • The CRA also requests that any RTPs that you may receive this week not be actioned.

Updated business tax filing deadlines can be found on the Canada Revenue Agency website.

2. Cashflow and Loan Support for Businesses

The federal fiscal package includes cash flow and loan support for businesses.

The Business Credit Availability Program (BCAP) will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses. Read more >>

 

BCAP (from Business Development Bank of Canada)

Under the Business Credit Availability Program (BCAP) new relief measures for qualified businesses include:

 

  • Working capital loans of up to $2 million with flexible repayment terms such as principal postponements for qualifying businesses
  • Postponement of payments for up to 6 months, free of charge, for existing BDC clients with total BDC loan commitment of $1 million or less
  • Reduced rates on new eligible loans

 

Businesses seeking support through BCAP should first contact their financial institutions for an assessment of their situation. Read more >>

3. Employee Retention and EI Support

To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months.

 

The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Read more >>

 

Federal COVID-19 Support for Employees

For employees who have been laid off, Employment Insurance has been tweaked in several ways:

 

  • Waiting periods have been waived.
  • Doctor notes for sick leave are waived.
  • For new EI programs, an application website in early April
  • Simple attestation checkbox on website; no documents or verifications will be necessary

 

More support for people facing unemployment can be found at the Canada’s COVID-19 Economic Response Plan page.

 

Sources:

Canada Revenue Agency

Canada’s COVID-19 Economic Response Plan

Business Development Bank of Canada (BDC)

Kevin Milligan, associate professor (Economics), University of British Columbia

Financial Post

IT World Canada

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