Understanding legislative impacts in Canada during COVID-19
The Canadian government has implemented many legislative changes, grants, incentives, and extensions to ease the strain on business. The following are the current benefits offered. Your company can use their self-assessment tool to determine which applies to your business.
Income Tax Deferral
Businesses may defer income tax balances due and instalments until after August 31, 2020 without interest or penalty.
Sales Tax & Customs Duty Deferral
All businesses, including self-employed individuals, can defer GST, HST, and customs duty owing for March, April and May until June 30, 2020.
Canada Emergency Wage Subsidy (CEWS)
This subsidy will be available April 27, 2020 to all businesses, regardless of sector or business size providing their revenues have dropped at least 15% in March, and 30% in April and May.
It provides 75% of employee wages up to a maximum of $847 per week until June 6, 2020. Eligible employers are also eligible for a 100% refund on specific employer contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan as they apply to the employee.
Temporary 10% Wage Subsidy
This three-month measure reduces the amount of payroll tax remittance for qualifying businesses registered with the Canada Revenue Agency. The subsidy applies to salaries, wages, bonuses, or other remuneration to eligible employees.
Benefits for this subsidy reduce the amount available under the CEWS. More information is available here.
Canada Emergency Response Benefit (CERB)
Self-employed individuals who do not qualify for Employment Insurance may qualify for a taxable benefit of $2,000 every 4 weeks for up to 16 weeks.
Extended Work-Sharing Program
The Work-Sharing program has been extended to 76 weeks. It helps employers avoid layoffs due to the impact of COVID-19 on their business by providing income support to employees eligible for Employment Insurance who agree to reduce their normal working hours. More information is available here.
Canada Emergency Business Account (CEBA)
This program offers interest-free loans of up to $40,000 to small businesses and not-for-profits for operating costs during the COVID-19 pandemic. Qualifying organizations must have made payroll payments on between $20,000 and $1.5 million in 2019.
Loans repaid by December 31, 2022 qualify for a 25 per cent reduction (maximum $10,000). Any balance will be converted to a three-year term loan at 5 per cent interest. Contact your lender for more information.
Canada Emergency Commercial Rent Assistance (CECRA)
This program was announced on April 24, 2020 and applications are not available yet. It will lower rent by 75 per cent for small businesses, non-profits and charitable organizations negatively affected by COVID-19.
Benefits include forgivable loans to qualifying commercial property owners to cover 50 per cent of three monthly rent payments for April, May, and June. Property owners must agree to reduce the rent of qualifying small business tenants by a minimum of 75 percent for these months and cannot evict tenants while the agreement is in place. Tenants must pay the remaining 25 percent.
Business Credit Availability Program (BCAP)
This program provides additional credit solutions through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Options include credit and cash flow loans, guaranteed for small and medium-sized businesses, and co-lend term loans. Contact your lender for more information.
The Northern Business Relief Fund (NBRF) provides short term support, in the form of a non-repayable grant, for ongoing operational costs to small- and medium-sized territorial businesses impacted by economic disruptions due to COVID-19. More information is available here.
Funding is available for small and medium-sized Indigenous businesses through Aboriginal Financial Institutions, in partnership with Indigenous Services Canada.
Additional Support for Business
Small and medium-sized businesses unable to access other support measures may access capital through your local Regional Development Agency. You can find contact information here.
The Government of Canada also offers many sector-specific supports for agriculture, agri-food, aquaculture, fisheries, cultural, heritage, sports, air transportation, tourism, and energy, as well as non-profits and charitable organizations. More information is available here under “Support for Sectors”.
The Government of Canada offers several programs to spur innovation towards COVIS-19 solutions. These include a procurement program for small and medium-sized businesses through the Industrial Research Assistance Program (IRAP) to increase innovation capacity and to bring ideas to market. Other programs include funding for pandemic response and bio-manufacturing. More information is available here.
While this information is correct at the date of publishing, we recommend you contact us for assistance. Our in-country-experts are tapped into the regulatory and governmental pipeline. Let us help you overcome your business challenges during these unstable times.