🙏Covid-19 - Small Business Subsidies and Support
My heart goes out to the many small businesses that have been forced to lock their doors and wait out the storm, not knowing how long the storm will last. There have been daily updates from the Federal and Provincial governments, resulting in many changes to Canadians’ individual and business taxes and available subsidies to businesses.
Updates for Business:
GST: The CRA will allow all businesses to defer, until the end of June 2020, any GST/HST payments or remittances that become owing on or after March 27, 2020, and before June 2020. This means that no interest will apply if your payments or remittances are made by the end of June 2020.
Payroll: The 10% subsidy on gross wages is still available - Temporary wage subsidy for employers.
Eligible employers (individuals (excluding trusts), certain partnerships, non-profit organization, registered charity, or Canadian-controlled private corporation eligible for the small business deduction) who pay salary, wages, or taxable benefits to employees, between March 18, 2020 and June 19, 2020, can reduce payroll remittances of income tax by the amount of the subsidy. This measure is only applicable to remittances made to the CRA.
Corporate Income tax: More time to pay income taxes Businesses can defer, until August 31, 2020, the payment of any income tax amounts that become owing on or after March 18 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.
CEWS – Canada Emergency Wage Subsidy – measure to help avoid laying off your employees- covers 75% of salaries for qualifying business, for up to 3 months (retroactive to March 15) if your business has declined in gross sales of 30% compared to the comparative month in the previous year. You will need to establish your eligibility each month you claim the subsidy. If you don’t qualify for this subsidy, you can take advantage of the 10% subsidiary previously mentioned.
From what I hear as of now, this 75% subsidy will be available in 6 weeks, but don’t hold me to the fire on that statement.
Access to credit:
BCAP – Business Credit Availability Program
Canadian Emergency Business Account – provides interest-free loans of up to $40,000 to small business and NFP’s to help cover operating costs. To qualify, your business must have paid between $50,000 - $1,000,000 in payroll in 2019.
Small business loans – the BDC is working with lenders to co-lend term loans to small/medium sized businesses for their operation cash flow requirements.
Business owners and others:
CERB – Canada Emergency Response Benefit – if you don’t qualify for EI, starting April 6, you can apply for this benefit which will pay you up to $2,000 a month for up to 4 months.
Stay Healthy and Safe 🤓