As the situation surrounding COVID – 19 continued to evolve, the Canadian government introduced many new measures to support businesses through these challenging times. Even after two years into post-COVID, businesses are still finding an anchor to re-establish their bases. Therefore for the Canadian economy to perform at its best, it is imperative to incorporate businesses and allow them to expand through new avenues. The COVID era has revolutionized the professional sector on a global scale by altering the workforce dynamic. The effects of COVID, therefore, have left a long-lasting mark for years to come, and to learn from these times would be the sole pragmatic thing to do in order to gain success in the long run. For your reference, we have summarized the announcements made since present date, below:
Measures Announced to Respond to COVID – 19 for Businesses
Canada Emergency Wage Subsidy (CEWS):
What it was? Canada Emergency Wage Subsidy or CEWS was a 75% wage subsidy available to eligible employers for up to 12 weeks. Any benefits received under this program were included in the calculation of taxable income for your business.
Who Is eligible? The individuals eligible to obtain benefits from CEWS
- 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 10||Claiming Period||Required Reduction in Revenue||Reference Period for Eligibility|
|Period 1||March 15 – April 11||15 %||March 2020 over:|
– March 2019 or
– Average of January and February 2020
April 12 – May 9
|April 2020 over:|
– April 2019 or
– Average of January and February 2020
May 10 – June 6
May 2020 over:
– May 2019 or
– Average of January and February 2020
How is it calculated?
- The subsidy was equal to the greater of
i) 75% of the 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 (i.e., generally would be considered to be the business owners or persons that are related to the business owners,) the subsidy amount was limited to the actual eligible remuneration paid in any pay period between March 15 and June 6, 2020.
- Eligible remuneration included salary, wages, or other remuneration.
- There was no overall limit to the subsidy per employer. Still, any payments from the Temporary Wage Subsidy (TWS) reduced the amount available to be claimed under the CEWS for the same period.
How could you have applied? Any business owners were able to apply through the CRA’s My Business Account. If they had not already set up the account, they had to visit the CRA website to begin their registration.
Temporary Wage Subsidy (TWS):
What was it? A three-month measure that allowed eligible employers to reduce the number 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 their businesses.
Who was eligible? An eligible employer included an individual, partnership, non-profit organization, registered charity, or Canadian-Controlled Private Corporation.
How was it calculated? The Subsidy is equal to 10% of the remuneration you pay from March 18, 2020, to June 19, 2020, up to $1,375 for each eligible employee, to a maximum of $25,000. The Wage Subsidy Calculator is available online; hence, it can be easily calculated. How did you apply? The subsidy was 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 subsidy amount. Note – You cannot reduce CPP or EI remittances by the subsidy.
measures above. Thanks and stay safe!
Canada Emergency Wage Subsidy Extension for 2023
Currently, there is no extension provided to the CEWS program. However, there was an extension provided until 2021. Currently, the government is not scaling the operation for CEWS extension in 2023.
What is the CRHP?
The Canada Recovery Hiring Program (CRHP) is developed to allow subsidies in the efforts of supporting employers by offering a 50% incremental remuneration to employees who are considered to be eligible for this aid. The CRHP was offered until May 7, 2022, as an unreasonable decline in the revenue generated for their salaries during the COVID era was observed. Programs such as CRHP and CEWS helped develop options to cater to problems regarding generating salaries for individuals during a pandemic. This subsidy is one example of how the Canadian government played its role in helping its people during tough unmanageable times.
Kindly keep visiting SRJ Chartered Professional Accountants for more information regarding these subsidies and public programs.
Other Measures Announced to Help Businesses:
Access to credit:
- Canada Emergency Business Account (CEBA)
- Created to provide up to $60,000 in interest-free loans to small businesses. If the loans are repaid by December 31, 2022, up to 25% (i.e. up to $20,000) will be forgiven. After December 31, 2023, the loans will convert to interest-bearing loans. More information will come from the financial institution in which you have your operating account. All applications will be processed directly online through your business’ financial institution.
- Applications for CEBA have now been closed.
- 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.
- Applications for BCAP have been closed.
Tax payment extensions:
- All businesses were permitted to defer any income tax payments that became payable between March 18, 2020, and September 2020, until after August 31, 2020, without interest or late payment penalties.
- Businesses and self-employed individuals couples opt to defer all GST/HST payments until June 30, 2020, depending on their 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 increased from $490,000 to $1 million for the 2020 tax year until 2028. Note – You do not need to notify the Ministry if your business no longer needs to make installments or file an EHT return due to the new exemption limit.
- Small businesses were exempt from paying certain taxes and were given a relief to help them stay afloat during the testing times.
- Physicians that were employed with the Ministry of Health were part of the COVID-19 Advance Payment Program.
- Workplace Safety and Insurance Board (WSIB) allows businesses to defer premium reporting and payments. 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 can remain operational remotely. Please contact us if you have any questions about navigating the measures above. Check out our COVID-19 updates here.
How much COVID subsidy was provided by the Canadian Government?
The Government of Canada developed and introduced several social security and financial aid programs during the COVID-19 era. An estimated $82 billion package specified as economic aid was rolled out by Canadian Prime Minister Justin Trudeau in 2020.
What programs are replacing CEWS?
In October 2021, the Canadian Government stated that the Canada Emergency Rent Subsidy known as (CERS) and Canada Emergency Wage Subsidy (CEWS) were being halted due to the global world finally entering a post-COVID-era.
However, the Canadian government also strategized and developed two other programs that would now be implemented, replacing CERS and CEWS. The new programs will however continue to provide wage support to businesses that are eligible for such tax breaks. The proposed plans are called
- HHBRP – The Hardest Hit Business Recovery Program
- THRP – The Tourism and Hospitality Program
How to return a wage subsidy payment?
To return your wage subsidy payments, log in to My Business Account (MyBA) and check the existing balance owing to make a repayment.
Open your My Business Account (MyBA) and go under the section of Payroll, then tap the hiring subsidy balances followed by the proceed to payment option. After doing that, you will be provided with payment options and you can opt for the method of your liking via Visa Debit, Debit MasterCard, Interac Online, etc. Use credit cards that have been authorized by the Canadian government. Follow the highlighted prompts to finalize the payment. You can also opt for My Payment options through the institution you are currently employed at.
Will Canada emergency wage subsidy be extended?
The Canadian Government rolled out these subsidies during the pandemic, during March 2020 and May 2022. As of now, the government has halted the emergency wage subsidy program, and therefore no one applies to avail of these.