Are you a small business that has been disrupted by COVID-19? At Locorum London, we’re all about supporting local. In light of non-essential businesses having to close their doors, we want to do what we can to help keep the small businesses we love informed. We’ve made a list of initiatives and resources that the Government of Canada has put in place to help small businesses navigate this tough time. Bookmark this page and check back often for the most up to date information.
Canada To Boost COVID-19 Tax Response
In response to COVID-19, the Canadian government has rolled out a series of targeted tax and fiscal relief with the intention to support individuals and businesses. Many of these measures were passed into law March 25, 2020. The CRA has also announced a delay in tax filing deadlines for individuals to June 1, 2020 and for trusts May 1, 2020.
What does this mean for small businesses?
- An increase in temporary wage subsidy to 75%
- Deferral of GST/HST
- Deferral of custom duties and GST for those who import
To check out the full details and criteria for these initiatives, click here:
UPDATE: The Canadian Government has released further details for the proposed wage subsidy component.
- The 75% Wage Subsidy Program will be available to all businesses regardless of their size
- To qualify a business must be able to support a drop of at least 30% of revenues
- The wage subsidy will provide 75% of each employee’s pre-crisis salary and will apply to the first $58,700 of an employee’s salary to provide up to $847 per week
This program will be using the Canada Revenue Agency System and businesses will be able to apply through a new portal soon.
For complete details, please visit this website:
Loans For Businesses
Canada Emergency Business Account
With the closure of non-essential businesses, the Canadian government has rolled out specialized loans for eligible businesses to help with operating costs during the COVID-19 disruption.
Eligible small businesses and not-for-profits may be eligible to receive interest-free loans of up to $40,000 under the new Canada Emergency Business Account. These loans are available to businesses that paid between $50,000 and $1 million total payroll in 2019.
How can you apply for the Canada Emergency Business Account?
- Loans will be implemented by eligible financial institutions in cooperation with Export Development Canada (EDC)
- Small businesses and not-for-profits should contact their financial institution to apply for these loans
When the Prime Minister announced this program, he did indicate that these loans would be interest-free for the first year, and there are incentives for those who are able to repay the loan by or on December 31, 2022 in the form of loan forgiveness of up to 25%.
For more details, check out this resource:
UPDATE: The CEBA is the Canada Emergency Business account and is providing loans of $40,000 to businesses. The requirement has changed. In order to qualify, a business must how have payroll costs in 2019 of $20,000 to $1.5 million. This amount is determined by Line 14 of your T4Sum. This represents a substantial change from the original $50,000 minimum requirement.
Relief for Small to Medium Businesses
If you are a small to medium-sized business, the government has also established initiatives to help you during this time.
What kind of relief can you expect?
- New operating credit and cash flow terms given to an SME from a financial institution of up to $6.25 million guaranteed by the EDC
- These loans will be 80% guaranteed by the EDC, to be paid within one year
- A new Co-Lending Program that brings the Business Development Bank of Canada (BDC) together with financial institutions to co-lend term loans to an SME of up to $6.25 million
Please refer to these resources for further details and insights:
UPDATE to Business Rent Assistance: The government has announced the start of the CECRA – Canada Emergency Commercial Rent Assistance – this will be instituted to help businesses with their rent for April, May and June. This is an ongoing project at both the Federal and Provincial level. Details to follow.