In light of the COVID-19 pandemic, we understand that businesses of all sizes in Canada have been affected. Our aim is to assist you and your business in recovering and thriving once again COVID-19 Relief Measures. This article provides a comprehensive list of resources and information to support you on your journey.
COVID-19 Relief Measures: Canada Emergency Business Account (CEBA) Interest-free Loans
To provide further support to small businesses and not-for-profit organizations, the CEBA has been expanded. Now, an additional interest-free loan of up to $20,000 is available in addition to the existing $40,000. Repaying the new loan on or before December 31st, 2022, allows for 50% of the loan to be forgiven. Furthermore, if the original loan is repaid by the same date, up to 25% (up to $10,000) can be forgiven.
It’s important to note that the forgiven portion of the CEBA loan is considered business income. However, you have the flexibility to choose whether to report this income on the year you received the loan or the year you used it to cover your business expenses. For instance, you can opt to report the income on your next year’s return if you are also deducting your expenses at that time, which can help reduce your overall taxable income.
To apply for CEBA, businesses can reach out to their banks or credit unions. The application deadline for this loan was June 30, 2021.
Canada Emergency Rent Subsidy (CERS)
The Canada Emergency Rent Subsidy (CERS) has replaced the Canada Emergency Commercial Rent Assistance (CECRA) Program and no longer requires the participation of your landlord.
CERS directly supports businesses and other organizations by providing rent and mortgage support. The subsidy is calculated based on the percentage of eligible expenses and how businesses have been affected by COVID-19 Relief Measures. This support is available until October 23rd, 2021. Between August 29 and September 25, 2021, businesses can claim 40% of their expenses. From September 25 to October 23, 2021, they can claim 20% of their expenses. Additionally, organizations temporarily closed due to a local public health decision can qualify for an additional 25% of their expenses. It’s also possible to claim this support retroactively for previous periods.
When reporting your business income on your return, it is necessary to include the subsidy received. However, this amount will be offset by the expenses claimed, which means it may not significantly impact the total taxes owed COVID-19 Relief Measures.
Canada Recovery Benefit (CRB)
To learn more about the Canada Recovery Benefit (CRB), you can find detailed information in this blog post.
Canada Recovery Sickness Benefit (CRSB)
For comprehensive information about the Canada Recovery Sickness Benefit (CRSB), refer to this blog post.
Also read: Tax Impact of Ride and Accommodation Sharing
Canada Emergency Wage Subsidy (CEWS)
Under the CEWS initiative, the federal government is providing financial assistance to help cover a portion of employee wages. Businesses that have experienced a decline in revenue due to COVID-19 Relief Measures are eligible to apply, including those needing support for employees who were unpaid for 14 days or more.
The CEWS program is divided into five groups of claim periods: Periods 1-4 (March 15th to July 4th, 2020), Periods 5-9 (July 5th to November 21st, 2020), Periods 10-13 (November 22nd, 2020 to March 13th, 2021), Periods 14-16 (March 14th to June 5th, 2021), and Periods 17-20 (June 5th to September 25th, 2021).
It’s important to note that the amount of subsidy a business can receive varies depending on the extent of their revenue decline. For example, companies that have experienced a revenue drop of over 50% now qualify for an additional 35% subsidy under the updated CEWS program for COVID-19 Relief Measures. To estimate the potential subsidy amount and apply for the program, you can use the provided calculator.
For the periods between March 13th, 2021, and June 5th, 2021, the weekly wage subsidy for furloughed employees is calculated as the lesser of:
- $500, or
- 55% of their pre-crisis wage, up to a maximum of $595.
Note that employees on vacation leave, maternity leave, sick leave, or sabbatical are not considered “furloughed.” The availability of the furloughed employee’s subsidy extends until August 28th, 2021 for COVID-19 Relief Measures.
The CEWS initiative will continue to be available until at least October 23rd, 2021, with the application deadline set for August 12th, 2021.
Insurance and Pension Plan Refunds
As part of the original CEWS program, employers are eligible to receive a 100% refund of their contributions to Employment Insurance, Canada and Québec Pension Plans, and the Québec Parental Insurance Plan for the period when employees were receiving payment while off work.
Temporary Wage Subsidy for Employers (TWS)
Under the TWS program, businesses can receive a subsidy equal to 10% of their total payroll between March 18th and June 19th, 2020, up to a maximum of $1,375 per eligible employee. The maximum available for employers is $25,000.
Unlike other financial assistance programs, you don’t need to apply for the TWS. Instead, you need to calculate the subsidy amount manually before submitting your payroll remittance to the Canada Revenue Agency (CRA) and report the TWS amount to the CRA.
Some businesses may be eligible for both the CEWS and TWS. This article provides an explanation of how these two programs work together.
Regional Relief and Recovery Fund (RRRF)
The RRRF program allocates $962 million to Canada’s six Regional Development Agencies (RDAs). These RDAs can distribute this funding as they deem necessary, providing loans or implementing programs through Community Futures Development Corporations to assist small businesses across Canada COVID-19 Relief Measures. Some RDA programs may complement government COVID-19 relief measures, while others may support businesses that were denied government relief programs. Learn more about how this fund can apply to your situation.
Temporary Concerted Action Program for Businesses (PACTE)
The Temporary Concerted Action Program for Businesses (PACTE) enables eligible small businesses in Québec, including non-profit organizations, to benefit from a loan guarantee of at least $50,000 to address cash flow shortages.
Programme actions concertées pour le maintien en emploi (PACME)
The PACME initiative was launched by the Québec government to help companies implement teleworking measures or develop the skills of their employees who are currently working from home COVID-19 Relief Measures. Eligible companies can be reimbursed for up to 100% of their eligible expenses, with a maximum amount of $100,000. These expenses can include trainer’s fees, equipment purchases, or human resources activities.
Also read: Are you at risk of being penalized with the Underused Housing Tax?
Caisse de dépôt funding
The Caisse de dépôt et placement du Québec (CDPQ) has allocated $4 billion to support Québec businesses that have been impacted by COVID-19. Businesses seeking more than $5 million in financial support, with a profitable pre-pandemic track record and promising growth prospects in their industry, may be eligible for this funding for COVID-19 Relief Measures.
Indigenous businesses
$306.8 million in short-term, interest-free loans, and non-repayable contributions are available for First Nations, Inuit, and Métis businesses, as well as the COVID-19 Relief Measures Aboriginal financial institutions that support these businesses. An additional $133 million will also be provided to assist Indigenous businesses and micro-businesses in their recovery efforts.
GST/HST
Since December 6th, 2020, face masks or shields are exempt from GST/HST. These supplies will remain exempt from the tax until public health officials declare that they are no longer necessary in the fight against the COVID-19 Relief Measures pandemic.
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FAQ
What if I'm not eligible?
If your business does not meet the eligibility criteria for CEWS, you may be eligible for the Temporary Wage Subsidy for Employers (TWS) program.
