COVID Relief for Canadian Business Owners

COVID Relief for Canadian Business Owners

RMP’s helpful guide to the Federal Government’s most recent announcements

We at RMP recognize that we are in uncharted territory at the moment and we want to do our very best to help our clients in their time of need.  Our responsibility to you is to help equip you with as much information as possible so that your personal and business finances can withstand the uncertainty that we all face over the next few months.

The Government of Canada has responded to the economic impacts of the COVID-19 pandemic by enacting new financial benefits and support for business owners and taxpayers during these unprecedented times. RMP is continuing to monitor all measures that have been announced to help Canadian businesses and taxpayers navigate these difficult times.

We are committed to helping Canadian business owners and taxpayers access the invaluable benefits and support that they need during these uncertain times. We will continue to do our best to offer updates and advice as the situation changes. Now more than ever, you need a trusted partner to help you navigate the rough waters that we are expected to face over the next three to six months. Just remember, the COVID-19 outbreak will pass, it’ll just take some time.

COVID-19 Economic Response Plan

COVID-19 benefits and services issued by the Government of Canada include measures to address the needs of Canadian business owners:

https://www.canada.ca/en/department-finance/economic-response-plan.html

Most benefits listed in this page can be applied for via CRA My Account and My Service Canada Account. If you don’t have an account on either platform, register for one as soon as possible:

CRA My Account: https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html

My Service Canada Account: https://www.canada.ca/en/employment-social-development/services/my-account.html

Social distancing and self-isolation have negatively impacted businesses, large and small, across the country. In certain scenarios, some are able to maintain operations by implementing wide-scale work-from-home policies, while others face total shut down and significant losses of income. This threatens their ability to keep workers employed and operations afloat. Below, we’ve compiled a brief summary of the benefits and support that the government has offered to all Canadian business owners.

For businesses that are struggling to retain employees, the government has:

  • Provided a three-monthTemporary Wage Subsidy for small businesses equal to 75% of remuneration paid during that time retroactive to March 15, 2020. This will help businesses to retain and ensure workers remain on payroll.

More details on eligibility criteria will start with the impact of COVID-19 on sales and will be shared in the coming weeks. As of right now, a minimum revenue drop of at least 30% is reported to be one of the key criteria. 

  • Extended the eligibility of EI Work-Sharingagreements to 76 weeks, eased eligibility requirements, and streamlined applications. The Work-Sharing Program provides EI benefits to workers who make an agreement with their employer to reduce their regular working hours.

 

For businesses that NEED CREDIT OR FINANCING, the government has: 

The new Canada Emergency Business Account will provide interest-free loans to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.

What is it?

  • A $40,000 interest-free, government-guaranteed loan to help you pay for operating costs that you’re not able to defer as a result of COVID-19.
  • $10,000 (25%) of the $40,000 loan is eligible for complete forgiveness if $30,000 is fully repaid on or before December 31, 2022.
  • If the loan cannot be repaid by December 31, 2022, it can be converted into a 3-year term loan charging an interest rate of 5%.

 

Who is eligible for the loan?

Businesses or not-for-profits, will be eligible to apply for the loan if they have:

  • An operating company registered in Canada
  • Annual payroll of $50,000 to $1 million (based on your 2019 T4 Summary of remuneration paid)

The loan program will be available the week of April 6th. Interested businesses should work with their existing financial institutions to apply.

For businesses that HELP PAYING THEIR TAXES, the government has:

  • The government will allow businesses, including self-employed individuals, to defer until June 30, 2020 payments of the Goods and Services Tax / Harmonized Sales Tax (GST/HST), as well as customs duties owing on their imports. The deferral will apply to GST/HST remittances for the February, March and April 2020 reporting periods for monthly filers; the January 1, 2020 through March 31, 2020 reporting period for quarterly filers; and for annual filers, the amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year. For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May.

These amounts were normally due to be submitted to the Canada Revenue Agency and the Canada Border Services Agency as early as the end of this month.

  • More time to pay income taxes. The government is allowing all businesses to 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.
  • Some municipal and provincial governments have instituted land and property tax deferments to assist business owners.
  • The Canada Revenue Agency will temporarily suspend post assessment GST/HST and income tax audits on small and medium businesses.
  • Mortgages and Debt Relief

The Canada Mortgage and Housing Corporation (CMHC) has permitted lenders to allow payment deferrals on homeowner CMHC-insured mortgage loans. Canadian banks have stated their commitment to helping their customers manage financial hardship during the COVID-19 pandemic by offering deferrals of up to six months on mortgage payments or other credit products; however, relief is offered on a case-by-case basis.

 

RMP’S Commitment to help

 

Many of the small businesses, entrepreneurs, and self-employed individuals we serve are wondering how to maintain not only their personal health but the health of their businesses and, by extension, their employees during these difficult times. Our reminder to you is that we are by your side during these uncertain times. Remember, these uncertain times, will pass.

RMP will do everything we can to ensure that businesses have the accurate and up-to-date bookkeeping and financials records they need in order to speed up their applications for benefits, financing, and lines of credit.

If you have any questions about the benefits and support measures noted above, please free to call us.