Navigating Covid-19 Financial Support.

Current as of April 8, 2020

Page Contents

The following information is current as of April 8, 2020.  The summary is intended to be a general overview of the programs - specific details should be reviewed.  This should be read in conjunction with the complete newsletter which can be downloaded here:

Support available for businesses

 

1. Payroll

 

10% Temporary Wage Subsidy

What is it?

This subsidy is a 3-month measure targeting employers that are small businesses (including incorporated and unincorporated businesses), non-profit organizations and registered charities. Eligible employers will receive a wage subsidy accessible by reducing remittances of income taxes withheld as source deductions from their employees' remuneration.

How much is it worth?

The subsidy is equal to 10% of the remuneration paid from March 18 to June 19, 2020, capped at the lesser of $1,375 x the number of eligible employees and $25,000.

Application process

No need to apply - the employer calculates the subsidy when they remit payroll to CRA.

75% Canada Emergency Wage Subsidy

What is it?

This subsidy is a 3-month measure which will permit employers experiencing a significant revenue decline (announced as 30%) to receive a subsidy for employee remuneration paid. This subsidy will be paid by the government to the employer. Eligible employers are to include businesses (both incorporated and unincorporated), non-profit organizations and registered charities, but not public sector entities. As of April 8, 2020, negotiations as to the final form of the subsidy were still being held.

How much is it worth?

The general principal is to encourage the employer to maintain workers at their pre-COVID-19 compensation levels. In general, the subsidy is intended to cover 75% of wages paid, with the employer covering the remaining 25%.

Application process

Applications will be taken through CRA's My Business Account portal and a web-based application. Businesses not already registered for the My Business Account service may wish to do so to be prepared when the application process becomes available.

Employment Insurance Work-sharing Program

What is it?

This existing program provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers.

How much is it worth?

Reduce payroll costs by 10% to 60%.

Application process

Application required prior to commencing participation. Details online at https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus/employers-factsheet.html.

2. Loans

 

Canada Emergency Business Account

What is it?

Interest-free loans to small businesses and not-for-profits to help cover their operating costs during a period where their revenues have been temporarily reduced. To qualify, organizations will need to have paid between $50,000 and $1 million in total payroll in 2019. 

How much is it worth?

Up to $40,000 loans. 25% of the loan will be forgiven where it is repaid by December 31, 2022.

Application process

Contact your lending institution.

Loan guarantee and co-lending program

What is it?

Loans supported by Export Development Canada and the Business Development Bank of Canada will become available.

How much is it worth?

Up to $6.25 million in loans available from each of the two programs.

Application process

Contact your lending institution.

3. Deferral of Tax

 

Deferral of corporate income tax

What is it?

Payment of balances and instalments under Part 1 of the Income Tax Act due on or after March 18 and before September 1, will be due on September 1, 2020. No interest will accumulate on these amounts during this period.

How much is it worth?

Variable based on outstanding tax amount.

Application process

No need to apply - done automatically.

GST/HST & customs deferral

What is it?

Payment of GST/HST payments, instalments or remittances due on March 27 and up to June 2020, will be due on June 30, 2020.

Custom duties and GST on imports due for March, April and May 2020, will be due on June 30, 2020

No interest will accumulate on these amounts during this period.

How much is it worth?

Variable based on outstanding amount.

Application process

No need to apply - done automatically.

Support available for individuals

 

1. One-time payments

 

Special GST Credit payment

What is it?

A one-time payment through the GST credit will be made on April 9.

How much is it worth?

Amount will double the maximum annual GST credit, resulting in an average payment for those benefitting by close to $400 for single individuals and close to $600 for couples. Some whose income was too high to qualify for regular payments will be eligible for this one-time payment.

Application process

No need to apply - based on tax returns filed for 2018.

Special Canada Child Benefit (CCB) payment

What is it?

An additional one-time payment in May under the CCB program.

How much is it worth?

$300 per child for those currently receiving CCB payments. A reduced amount may be available to those whose income is too high to receive regular CCB payment.

Application process

No need to apply - based on tax returns filed for 2018.

2. Deferral of Tax

 

Deferral of personal income tax

What is it?

Income tax amounts that become due on or after March 18, 2020 (also including instalments) and before September 2020 are deferred to September 1, 2020. No interest will accumulate on these amounts during this period.

How much is it worth?

Variable based on income tax outstanding.

Application process

No need to apply - done automatically.

3. Support for Lost Income

 

Employment insurance (EI) sickness benefit

What is it?

EI regular or sickness benefits are still available. The one-week waiting period for EI sickness has been waived for claimants who have been quarantined, as has the requirement to provide a medical certificate.

How much is it worth?

Unchanged from the past. If eligible for both EI and CERB, CERB will be paid first (regardless of whether it is higher or lower than EI) for the respective period. If still eligible for EI at the end of the CERB eligibility period, EI will be available as normal.

Application process

Applications for EI regular or sickness benefits for periods commencing on or after March 15 are being processed through CERB.

Canada Emergency Response Benefit (CERB)

What is it?

A taxable benefit for eligible workers who have lost their income due to COVID-19.

How much is it worth?

$2,000/4 week period for up to 4 periods (16 weeks). Benefit is available from March 15 to October 3, 2020, divided into 7 periods.

Application process

Online through CRA's My Account portal or by automated phone service (1-800-959-2019 or 1-800-959-2041 if you have filed a tax return in the past) or call 1-800-959-8281, CRA's Enquiries Line, if you have never filed a tax return).

4. Other Support

 

Mortgage support

What is it?

Case-by-case support to assist with mortgage payments, including the possibility to defer up to six monthly mortgage payments (interest and penalty).

How much is it worth?

Variable based on outstanding mortgage.

Application process

Contact your lending institution.

Emergency Loan Program for Canadians Abroad

What is it?

An emergency repayable loan to Canadians abroad in need of immediate financial assistance to return home or to temporarily cover their life-sustaining needs while they work toward their return.

How much is it worth?

Up to $5,000.

Application process

Go to https://travel.gc.ca/assistance/embassies-consulates, call Global Affairs Canada’s 24/7 Emergency Watch and Response Centre in Ottawa at +1 613-996-8885 (collect calls are accepted where available), or email sos@international.gc.ca.

Student loans

What is it?

Loan repayments and interest under the Canada Student Act, Canada Student Financial Assistance Act, and Apprentice Loans Act are suspended until September 30, 2020.

How much is it worth?

Variable based on outstanding loan.

Application process

No need to apply - done automatically. Borrowers should check with their provincial or territorial student loan provider to see if payment is required on the provincial or territorial portion.

Minimum RRIF withdrawal

What is it?

The minimum withdrawal from a RRIF or a money purchase pension plan for 2020 (computed as a percentage of its value on January 1, 2020) will be reduced by 25%.

How much is it worth?

Tax on 25% reduction deferred until funds are withdrawn in the future.

Application process

Contact your financial institution for process to reduce withdrawals.

Have more Questions?

The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.

 

No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

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