Measures Announced to Respond to COVID – 19 for Businesses

Measures Announced to Respond to COVID – 19 for Businesses

Updated April 10, 2020

As the situation surrounding COVID – 19 continues to evolve, the government has introduced many new measures to support businesses through these challenging times. For your reference, we have summarized the announcements made as of April 3, 2020 below: 

Measures Announced to Respond to COVID – 19 for Businesses

Canada Emergency Wage Subsidy (CEWS):

What is it? A 75% wage subsidy available to eligible employers for up to 12 weeks. Any benefits received under this program will be included in the calculation of taxable income for your business.  

Who Is eligible? 

  • Eligible employers include individuals, corporations, partnerships, non-profit organizations and registered charities.
  • The employer needs to have experienced a revenue drop as outlined in the chart below during the eligible periods from arms-length sources (see reference period below).

Updated April 10Claiming PeriodRequired Reduction in Revenue Reference Period for Eligibility
Period 1March 15 – April 1115 %March 2020 over:
– March 2019 or
– Average of January and February 2020
Period 2April 12 – May 930% April 2020 over:
– April 2019 or
– Average of January and February 2020
Period 3May 10 – June 630%May 2020 over:
– May 2019 or
– Average of January and February 2020

How is it calculated?

  • The subsidy is equal to the greater of 

i) 75% of remuneration paid to an employee, to a weekly maximum of $847, or

ii) 75% of weekly remuneration paid to an employee pre-crisis, up to the same maximum.

  • For employees that do not deal at arm’s length with employers (ie. generally would be considered to be the business owners or persons that are related to the business owners,) the subsidy amount will be limited to the actual eligible remuneration paid in any pay period between March 15 and June 6, 2020. 
  • Eligible remuneration may include salary, wages or other remuneration.
  • There will be no overall limit to the subsidy per employer but any payments from the Temporary Wage Subsidy (TWS) would reduce the amount available to be claimed under the CEWS for the same period. 

How do you apply? Apply through the CRA’s My Business Account.  If you have not already set this up and expect you may qualify for this program, please go online to the CRA website and begin the process to create your ‘My Business Account’ as this process can take a few weeks.

Temporary Wage Subsidy (TWS): 

What is it? A three month measure to allow eligible employers to reduce the amount of payroll deductions required to be remitted to the CRA. Similar to the CEWS, any amount received is included in the calculation of taxable income for your business. 

Who is eligible? An eligible employer includes an individual, partnership, non-profit organization, registered charity or Canadian-Controlled Private Corporation.

How is it calculated? The Subsidy is equal to 10% of remuneration that you pay from March 18, 2020 to June 19, 2020 up to $1,375 for each eligible employee, to a business maximum of $25,000.

How do you apply? The subsidy is calculated manually by whoever makes the payroll remittances. Once you have calculated your subsidy, you can reduce your current payroll remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy. Note – You cannot reduce CPP or EI remittances by the subsidy.

Other Measures Announced to Help Businesses: 

Access to credit:

  • Canada Emergency Business Account (CREB)
    • Created to provide up to $40,000 interest-free loans to small businesses. If the loans are repaid by December 31, 2022, up-to 25% (ie. up to $10,000) will be forgiven. After December 31, 2022 the loans will convert to interest bearing loans. More information will come from the financial institution that you have your operating account with.  All applications will be processed directly online through your business’ financial institution.
  • Business Credit Availability Program (BCAP)
    • A program created to provide $40 billion of additional support through loans administered by the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to businesses. 

Tax payment extensions:

  • All businesses are permitted to defer any income tax payments that become payable between March 18, 2020 and September 2020 until after August 31, 2020 without interest or late payment penalties. 
  • Businesses and self- employed individuals can defer all GST/HST payments until June 30, 2020 depending on your filing period:

    • February, March and April remittances for monthly filers
    • January – March reporting period for quarterly filers
    • 2019 amounts payable for annual filers

Provincial measures announced by the Province of Ontario 

  • Retroactive to January 1, 2020, the Employer Health Tax (EHT) exemption is increasing from $490,000 to $1 million for the 2020 tax year. Note – if your business no longer needs to make instalments or no longer needs to file an EHT return due to the new exemption limit, you do not need to notify the Ministry. 
  • Workplace Safety and Insurance Board (WSIB) allows businesses to defer premium reporting and payments until August 31, 2020. Businesses are eligible for this deferral regardless if they report and pay monthly, quarterly or annually. The following payments can be deferred: 

    • Monthly: March 31, April 30, May 31, June 30, July 31, Aug 31
    • Quarterly: April 30, July 31
    • Annually: April 30

At SRJ Chartered Professional Accountants we are here for you. Through a cloud infrastructure, we are able to remain operational remotely. Please contact us if you have any questions in relation to navigating your way through the measures above.  Thanks and stay safe!