Government’s COVID-19 relief measures: What businesses need to know
To support businesses facing revenue losses, and to help prevent lay offs, the Government of Canada has recently announced measures that help support businesses dealing with the economic impacts of the coronavirus outbreak.
If you’re a business owner, we know these are challenging times for you and your business. To help you navigate any immediate challenges, we’ve rounded up a list of the current government relief measures that may be available to you.
To support businesses that are facing revenue losses and to help prevent lay offs, the government has implemented a temporary wage subsidy for qualifying businesses, for up to three months. The subsidy will be equal to 75% of remuneration paid during the 12-week period from March 15 to June 6, 2020 and will be capped based on a maximum annual wage of $58,700, up to a maximum of $847 a week per employee. This subsidy will be backdated to March 15, 2020.
This subsidy will be available to employers – big and small – who can show their March 2020 revenues have fallen by at least 15% due to the pandemic when compared to revenues realized in January and February 2020. Small businesses that do not qualify under the new rules may still qualify for the previously announced wage subsidy of 10% of remuneration.
The government will also be working with non-profit organizations and registered charities to ensure the definition of revenue is appropriate to their circumstances. They are also considering additional support for these groups, particularly those involved in the front-line response to COVID-19. Further details will be announced in the near term.
The Canada Emergency Response Benefit (CERB) is a taxable benefit of $2,000 a month for up to 4 months for Canadians – whether employed or self-employed – who must stop working for reasons related to COVID-19. Canadians will be able to access the benefit if they have lost their income or can’t earn an income because they are sick or quarantined. Seasonal workers, Canadians who have recently exhausted their EI benefits, those caring for someone with COVID-19, or those who have had to stop working in order to care for children who are either sick or home from school and daycare, will also be eligible.
Canada Emergency Commercial Rent Assistance
The Canada Emergency Commercial Rent Assistance (CECRA) program will help small businesses offset rent in April, May and June 2020. Further details about these loans, which includes some forgivable loans, are promised to follow as the implementation of this program will require a partnership between the federal government and provincial and territorial governments – as these bodies are responsible for property owner-tenant relationships.
The Canada Emergency Business Account is a new $25 billion program that will offer small businesses interest-free loans of up to $40,000. It is intended to help cover their operating costs during a period when their revenues have been temporarily reduced due to the COVID-19 crisis. Businesses that repay $30,000 of the loan on or before December 31, 2022 will also be forgiven the remaining $10,000.
Already Filed Paper Returns
The CRA has implemented a temporary measure, which will allow an electronic filer to submit an electronic return for their client, even if a paper return has already been submitted for that tax year but has not yet been processed.
Defer Tax Filing
For businesses, the federal government has deferred the payment of any income tax amounts owing after March 18, 2020 and before September 1, 2020 without interest or penalties. The same applies to balances owing prior to March 18th; they will be deferred until September 1, 2020, as well – four months later than the usual April 30 deadline. For Quebec companies, the payment of instalment payments and tax amounts owing is also suspended until September 1, 2020. The government will also be deferring GST, HST, and customs duties until June 30, 2020.
If you have any questions about the impact of these changes on you and your taxes, H&R Block Tax Experts are here to help. Visit here for the latest information on how we’re making ourselves available to our clients during the COVID-19 crisis and how we can best serve you.
Click here to see a handy infographic outlining the changes that may affect you.