Is there any tax and business relief for businesses in Canada with the COVID-19 pandemic? Updated March 30th.
The government makes new announcements daily. Many of the announcements are made before the related money or programs are ready. Thus, the confusion and “clarification” later. The best place to get the latest on the federal programs is Government and COVID-19 and Canada’s COVID-19 Economic Response Plan.
The plans for personal relief are the next FAQ; this is the business relief FAQ.
1. Canada Emergency Wage Subsidy
The government of Canada has announced an up to 75% wage subsidy for qualifying businesses, for up to 12 weeks, retroactive to March 15, 2020. This will help businesses to keep and return workers to the payroll.
This subsidy would be available to eligible employers that see a drop of at least 30% of their revenue during this period compared to the prior year.
At this page: The Canada Emergency Wage Subsidy
If you do not qualify for this subsidy, please check if you are eligible for the next subsidy below.
2. Temporary Wage Subsidy
The subsidy is equal to 10% of the remuneration you pay from March 18, 2020, to June 19, 2020, up to $1,375 for each eligible employee and to a maximum of $25,000 total per employer.
Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
At this page: FAQs – Temporary Wage Subsidy for Employers
3. Delay of tax payments to August 31, 2020
“The Canada Revenue Agency 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. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.”
At this page: Income tax filing and payment dates: CRA and COVID-19
4. British Columbia Deferred Tax Payments
Effective immediately, B.C. is extending filing and payment deadlines for the following taxes until September 30, 2020:
- Employer health tax
- Provincial sales tax
- Carbon tax
- Motor fuel tax
- Tobacco tax
At this page: COVID-19 Action Plan – Provincial Tax Changes
5. Deferral of GST and Customs Duty Payments
“To support Canadian businesses in the current extraordinary circumstances, the Minister of National Revenue will extend until June 30, 2020 the time that:
- 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; and
- 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.
“Imported goods by businesses are generally subject to the GST, at a rate of 5 per cent, as well as applicable customs duties, which vary by product and country of origin. Payment deadlines for statements of accounts for March, April, and May are being deferred to June 30, 2020”
6. Temporary suspension of audits
“The Canada Revenue Agency will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.”
At this page: Changes to taxes and benefits: CRA and COVID-19
7. Business Credit Availability program (BCAP)
“Through this program, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will provide more than $65 billion in direct lending and other types of financial support at market rates to businesses with viable business models whose access to financing would otherwise be restricted. By working in close cooperation with financial institutions, this program will fill gaps in market access and leverage additional lending by private sector institutions
Businesses seeking support through BCAP should contact the financial institutions with whom they have a pre-existing relationship, so that the financial institutions may assess the client’s financial request. If the needs of the client exceed the level of support the financial institution is able to provide, the financial institution will work alongside BDC or EDC to access additional resources the Government has made available under BCAP.”
At this page: Business Credit Availability Program overview (BCAP)
8. Work Share EI Program
An old program that has been revived to allow partial layoffs and for EI to partially cover employee wages. For example, you could go to an 80% work week and EI would cover 20%. The information is still referring to old programs in lots of places.
Update March 19th, 2020: a new link for the work share program
9. Canada Account EDC
This only applies to large businesses. It will help Small and Medium businesses through trickle down benefits,
“Supporting Canadian Business through the Canada Account
The government is changing the Canada Account so that the Minister of Finance would now be able to determine the limit of the Canada Account in order to deal with exceptional circumstances. The Canada Account is administered by Export Development Canada (EDC) and is used by the government to support exporters when deemed to be in the national interest. This will allow the government to provide additional support to Canadian companies through loans, guarantees or insurance policies during these challenging times.”
At this page: EDC’s guide to the Canada Account
And this page: Canada’s COVID-19 Economic Response Plan
10. Canada Emergency Business Account
“The new 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, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.”
Please check with your financial institution as they will be administering the loans. Up to $10,000 is forgivable is loan is repaid on time.
At this page: Support for Businesses
11. Small and Medium-sized Enterprise Loan and Guarantee program
The announcement is here:
Details so far are here:
We at Gilmour Group Chartered Professional Accountants Inc. are familiar with government systems and programs and the differences between announcements and actual programs in place. Contact us below if you have questions.