Government Assistance

Dear members,

As an update to our previous communications regarding the Provincial and Federal Government’s programs for businesses and individuals affected by COVID-19, please review the information below. New programs or existing programs that have been updated since our last communication are highlighted in red.

Please be advised that due to the rapid evolution of legislation and government announcements, information shared with you previously may no longer be applicable-please follow the links in this email to the authoritative source for government information recognizing that if there has been a recent announcement and there may be a slight delay in having it added to the government website. As always, members should speak to their own professional accountants and lawyers about how the federal and provincial economic packages apply to your specific situation.

 For Business:

 Wage Subsidy Programs

The Government is proposing two wage subsidy programs:

  • Canada Emergency Wage Subsidy (CEWS) – A 75% wage subsidy provided to the businesses that can prove a 15% decline in revenue for March 2020 and 30% decline in revenue for eligible months thereafter. You must apply for this subsidy through your “My CRA Business” account with Canada Revenue Agency each period. Applications are already open.
  • Temporary Wage Subsidy (TWS) – A 10% wage subsidy for all other businesses with no requirement to qualify a loss of revenue and no need to apply.  The period covered by this program is March 18th – June 19th, 2020. Employers may simply deduct the subsidy amounts from their regular source deduction remittance.

When you apply for the (CEWS), there is a calculation spreadsheet available to help you estimate the amount of your wage subsidy. Before using this calculator, make sure you are eligible to apply. After you apply for the wage subsidy, your claim will be subject to verification.

The Government announced on May 15, 2020 that the CEWS would be extended by an additional 12 weeks, to August 29, 2020. The eligibility criteria will apply for the current period (period 4). Any potential changes would commence as of periods 5 (July 5 to August 1) and/or 6 (August 2 to August 29). More information about the announced CEWS extension to August 29 will be coming soon.

For more information on specific requirements, maximums, reporting periods and qualifications please visit the following link:

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

 SUB (Supplemental Unemployment Benefit)

 This program is a top-up program. The high points are:

  • Employees go on EI and get their 55% of regular pay
  • Employer can apply to Service Canada for permission to top-up the employees, so they are receiving up to 95% of their regular pay
    • It doesn’t need to reach 95%, but it cannot be over
    • Employees would get a reduced pay cheque from their employer, and their EI benefits
    • It can be a flat amount or %. Example, you commit to paying everyone $300 bi-weekly to supplement their EI benefits, provided the total of the two payments does not exceed 95% of their regular employment earnings.
    • Using this program will help keep your employees paid closer to their regular earnings while utilizing EI to supplement the first 55%

 You will need to apply and submit a plan for the group of employees.

 Extended Work Sharing Program

  • For this program, businesses must apply to Service Canada to share similar work among a group of employees.
  • Would presumably only apply where there is a group of workers with very similar jobs

These programs are evolving rapidly, and new programs may be announced, for more information about the extended work-sharing program or to determine your businesses eligibility please visit:

 https://www.canada.ca/en/department-finance/economic-response-plan/covid19-businesses.html#extending_workshare_programs

 

Access to credit

This program includes:

Canada Emergency Business Account

The new Canada Emergency Business Account will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced. $10,000 of the $40,000 of CEBA loans will be forgivable if paid back by 2022.

Prime Minister, Trudeau, has announced an expansion to the eligibility criteria for the Canada Emergency Business Account (CEBA) to include many owner-operated small businesses. The changes to the CEBA will allow more Canadian small businesses to access interest free loans that will help cover operating costs during a period when revenues have been reduced.

To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:

  • a business operating account at a participating financial institution
  • a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return.
  • eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.

Expenses will be subject to verification and audit by the Government of Canada. Funding will be delivered in partnership with financial institutions. More details, including the launch date for applications under the new criteria, will follow in the days to come.

https://ceba-cuec.ca/

Business Credit Availability Program (BCAP)

 

Loan Guarantee for Small and Medium-Sized Enterprises

EDC is working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million.

https://www.edc.ca/en/solutions/working-capital/bcap-guarantee.html

Co-Lending Program for Small and Medium-Sized Enterprises

BDC is working with financial institutions to co-lend term loans for operational cash flow requirements. Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.

https://www.bdc.ca/en/pages/co-lending-program.aspx

Businesses should work with their current financial institutions to apply.

Income Tax Deferral

  • Tax returns that would be due between March 18, 2020 and August 31, 2020 are now all due on June 1, 2020.  Payment does not have to be made until September 1, 2020 and no interest will be charged.
  • The monthly corporate installment for March, April, May, June, July and August will all be due on September 1.

For more information as it becomes available please visit:

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html

GST/HST Deferral

  • Payment of HST collected by quarterly filers for January to March of 2020 is not due until June 30, 2020.
  • Monthly filers do not have to pay HST collected in February, March and April until June 30, 2020
  • Annual filers with returns due in March, April or May of 2020 have until June 30, 2020 to pay.

For more information or to follow for updates please visit:

https://www.canada.ca/en/department-finance/economic-response-plan/covid19-businesses.html#deferral_sales_tax_remittance_customs_duty_payments

 

Canada Emergency Commercial Rent Assistance (CECRA)

The federal government has reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. This program will lower rent by 75 per cent for small businesses affected by COVID-19.

  • The program will provide forgivable loans to qualifying commercial property owners to cover 50 per cent of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.

  • The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75 per cent for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25 per cent of the rent.

  • Impacted small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.

Applications will be accepted through the Canada Mortgage and Housing Corporation website beginning on May 25.

https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business

Nova Scotia is contributing $9 million to the Canada Emergency Commercial Rent Assistance for Small Businesses. The program, in partnership with the federal government, will provide rent relief for commercial small businesses that have temporarily ceased operations or lost at least 70% of revenue because of the COVID-19 pandemic. Landlords who register for the program can get a forgivable loan to cover half of the rent in April, May and June if they lower the rent by 75% over that period.

You can apply for the program on the Canada Mortgage and Housing Corporation’s website.

Nova Scotia Government – Changes to Payments

  • Government will defer payments until June 30 for all government loans
  • Government will defer the payment of small business fees until 30 June. This includes registration renewal fees and workers’ compensation premiums. A full list of deferred fees will be available later.
  • The Small Business Loan Guarantee Program, administered through 16 provincial credit unions, will defer principal and interest payments until 30 June 2020. The Small Business Loan Guarantee Program continues to provide access to credit for eligible businesses up to $500,000.
  • Small businesses which do business with the government will be paid within five days instead of the standard 30 days.

For more details as they become available, please visit:

https://novascotia.ca/coronavirus/support/

Nova Scotia COVID-19 Small Business Credit and Support Program.

This is a new temporary program for small businesses. It includes a loan, a grant, and business advice and support.

Eligible small businesses can get a loan of up to $25,000 through participating provincial credit unions. The loan application will be available from 29 April to 30 June 2020.

http://www.novascotia.coop/programs/small-business-loan-guarantee-program/

Small Business Reopening and Support Grant

  • a one-time grant of up to $5,000 to help businesses safely reopen
  • business continuity voucher of up to $1,500 for advice and services to help your business adapt to and become more resilient in a COVID-19 world.

For more details on eligibility and how to apply please visit the webpage below:

https://novascotia.ca/coronavirus/small-business-reopening-support-grant/

 For Individuals:

 There are two federal programs available for people experiencing a disruption in employment:

  • Employment Insurance Benefits (EI)
  • Canadian Emergency Response Benefit (CERB)

The new Canada Emergency Response Benefit (CERB)

To Provide a taxable benefit of $500 a week for up to 24 weeks to workers:

  • Residing in Canada, who are at least 15 years old;
  • Who have stopped working because of COVID-19 or are eligible for Employment Insurance regular or sickness benefits:
  • Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application
  • Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment income.

Service Canada is now opening applications for CERB and is requesting individuals apply on certain days that correspond to the month of birth of the applicant to help manage the flow of incoming applications:

If you were born in the month of Apply for CERB on
January, February or March Mondays
April, May, or June Tuesdays
July, August, or September Wednesdays
October, November, or December Thursdays
Any month Fridays, Saturdays and Sundays

If your employees have already applied for EI then they do not have to do anything for CERB. It seems that CERB is replacing normal EI benefits for a 24-week period and then regular EI benefits will start if they are still not working at that time.

In order to be eligible for CERB, you must have earned $5,000 or more of employment income or self-employment income in 2019. This does include dividends.

To help more Canadians benefit from the CERB, the government will be changing the eligibility rules to:

  • Allow people to earn up to $1,000 per month while collecting the CERB.
  • Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their usual seasonal work as a result of the COVID-19 outbreak.
  • Extend the CERB to workers who recently exhausted their EI regular benefits and are unable to find a job or return to work because of COVID-19.
  • The government will work with provinces and territories through a new transfer to cost-share a temporary top-up to the salaries of workers deemed essential in the fight against COVID-19, who make less than $2,500 a month.

Recipients must reapply for CERB every 4 weeks as unemployment continues in order to continue receiving benefits if you applied through CERB directly. If you applied for EI and benefits were switched to CERB then you must continue doing EI reports as required.

Recipients should be aware that these payments, as of right now, are a taxable benefit and will be considered taxable income on your 2020 tax return. CERB is paid gross, without withholdings unlike typical employment income which you receive net of income tax deductions. The amount of tax recipients will owe will depend on their own personal tax situation.

https://www.canada.ca/en/services/benefits/ei/cerb-application/questions.html

Please refer to the question at the bottom of the FAQ section for clarification on dividends.

For more detail of how and when to apply, or for more information please visit the following link:

https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html

For more information on or to apply for employment insurance please visit:

https://www.canada.ca/en/department-finance/economic-response-plan/covid19-individuals.html#apply_employment_insurance

 

NOVA SCOTIA WORKER EMERGENCY BRIDGE FUND

The Worker Emergency Bridge is a one-time payment of $1,000 for Nova Scotians who are laid off or out of work because of COVID-19, who don’t qualify for Employment Insurance, and earn between $5,000 and $34,000. It can be combined with the Canada Emergency Response Benefit (CERB). The payment counts as taxable income and you’ll need to include it on your 2020 tax return.

  • The Worker Emergency Benefit is for each worker who qualifies
  • When you apply, you’ll need to provide documentation about your income and your employment

For more information on eligibility or to apply please visit:

https://novascotia.ca/coronavirus/worker-emergency-bridge-fund/

Every day there are changes to these programs and deadlines. Here are a few websites which are being updated frequently so you can stay up to date:

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

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update.html

https://novascotia.ca/coronavirus/#support