Canada Announces Measures To Support Businesses, Canadians In COVID-19 Crisis
The government of Canada has put several policies in place to support businesses and its citizens in response to the COVID-19 pandemic. Canadian Finance Minister Bill Morneau has said emergency funds should be flowing in two to three weeks. Promotional Product Professionals of Canada has shared a summary of the government policies and the benefits available to Canadians.
For employers and self-employed Canadians:
Extended Income Tax Payments
- Canada Revenue Agency (CRA) will defer tax payments until after August 31, 2020, to help businesses with cash flow, owing on or after March 18 and before September 2020. This extension also applies to tax balances due, as well as tax installment payments.
Temporary Business Wage Subsidy
- Provide eligible small businesses a 10-percent wage subsidy for the next 90 days, up to a maximum of CA$1,375 per employee and CA$25,000 per employer. Employers will receive this wage subsidy immediately as they can reduce the amount of income tax that has been withheld before transmitting payroll deductions to the CRA. The CA$1,375 maximum per employee means that the maximum is reached for employees earning more CA$54,000 per year.
Business Development of Canada (BDC) held a webinar on March 25. “How to Cope with the Impacts of COVID-19 on Your Business” shares short-term economic perspectives and advises on how to manage through the crisis. A recording of the webinars is available here.
Launch Business Credit Availability Program
- This will increase the credit available to small- and medium-sized Canadian businesses, although details are not yet available. It is a program to provide additional support to businesses experiencing cash-flow challenges through private lenders, the Business Development Bank of Canada (BDC) and Export Development Canada (EDC)
Relief measures for qualified businesses include: working capital loans of up to CA$2 million with flexible terms and payment postponements for up to six-months; postponement of payments for up to six-months, free of charge, for existing BDC clients with total BDC loan commitments of CA$1 million or less; reduced rates on new eligible loans; and additional details regarding the Business Credit Availability Program (BCAP) measures, including industry-specific support to be announced soon.
The Export Development Corporations has a growing number of articles on “how business can cope with CODIV-19.”
Business Develop Bank of Canada’s (BDC) Small Business Loans
- BDC has a Small Business Loan program and loans of up to CA$100,000 can be applied for online. The interest rate on this type of loan is BDC’s base rate [now 5.05 percent], plus one percent to 12 percent.
Changes to Work Share Program
- The maximum duration of Work Sharing agreements is extended to 76 weeks from 38 weeks.
Québec Administrative Extensions
- The Province of Québec will harmonize with the Government of Canada’s tax filing and tax extensions, as detailed above.
- The new Temporary Aid for Workers’ Program (PATT COVID-19) offers financial assistance to meet the needs of workers who cannot earn all of the work income due to COVID-19 and are not eligible for other Québec financial assistance programs.
For individuals, families and workers:
Emergency Care Benefit
- Workers who need to stay home because of COVID-19 but are not eligible for Employment Insurance (EI) may qualify for a new Emergency Care Benefit, which provides up to CA$900 every two weeks for up to 15 weeks. It will be available to individuals, including the self-employed, who fall ill with COVID-19, are placed in quarantine or are caring for a family member who is ill. The benefit will also be provided to parents with children who require care or supervision due to school closures and are unable to earn employment income. The CRA will administer the benefit and eligible individuals will be able to apply online or by phone for the benefit starting in April 2020.
Canadians can apply for the emergency care benefit through the Canada Revenue Agency MyAccount secure portal, through a My Service Canada account or by calling 833-381-2725 for an automated application process.
Applicants will not have to provide a medical certificate but will have to re-attest that they meet the eligibility requirement every two weeks to reconfirm eligibility.
Emergency Support Benefit
- Provide funding to recently unemployed Canadians who do not qualify for EI. Further details, including the size of individual payments, will be announced in the coming days.
Income Tax Returns
- Taxpayers will not have to file their returns this year until June 1. Tax payments will be deferred until after August 31.
Enhanced Canada Child Benefit
- Increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-2020 benefit year, by CA$300 per child.
Increased GST Credit
- Provide additional assistance to individuals and families with low and modest incomes with a special top-up payment under the GST Credit Program. On average, the increase will be CA$400 for single individuals and CA$600 for couples, beginning in May.
Improved Access of Employment Insurance
- For a minimum of six months, waive the mandatory one-week waiting period of Employment Insurance (EI) benefits for workers who have either an imposed quarantine or who are self-isolating. No medical certificate will be required.
Deferred Mortgage Payments
- Mortgage insurers will permit lenders to allow payment deferral, effective immediately.
Registered Retirement Income Funds
- Previously calculated minimum withdrawals from Registered Retirement Income Funds (RRIFs) for 2020 have been reduced by 20 percent.
Canada Student Loan Payment Extension
- There will be a six-month interest-free moratorium on Canada Student Loan payments.
This information is current as of 2 pm, March 19 and is intended to provide general information and does not constitute legal, tax, accounting or other professional advice.