Supports for Small Businesses
The federal government has launched a Business Resilience national hotline, operated by the Canadian Chamber of Commerce, where entrepreneurs can seek business advice if they have pressing financial needs.
Call-in number: 1-866-989-1080 (toll-free) seven days a week, from 8 a.m. to 8 p.m. (EDT).
information on reopening
Emergency Commercial Rent Assistance
On April 24th, the federal government announced that they have 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 that have been affected by COVID-19.
UPDATE (JUNE 30): The federal government has extended the Canada Emergency Commercial Rent Assistance (CECRA) program by one month. The program was initially intended to support small businesses during the months of April, May, and June. It will now continue into July.
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.
The federal Canada Mortgage and Housing Corp. will administer and deliver the program.
The application portal is open, here.
Canada Emergency Business Account (CEBA)
This program is designed for small businesses to have access to capital. It will be implemented by eligible financial institutions in cooperation with Export Development Canada (EDC).
If you are a qualifying small business customer, the CEBA provides access to a $40,000 loan:
♢ 0% interest until December 31, 2022.
♢ No principal payments until December 31, 2022.
♢ Principal repayments can be voluntarily made at any time without fees or penalties.
♢ $10,000 loan forgiveness is available, provided outstanding balance is $40,000 at December 31, 2020, and $30,000 is paid back between January 1, 2021 and December 31, 2022.
♢ If any part of the balance is not paid by December 31, 2022, the remaining balance will be converted to a 3-year term loan at 5% annual interest, paid monthly, effective January 1, 2023.
♢ The full balance must be repaid by no later than December 31, 2025.
Canadian-operated businesses that have federal tax registration and a payroll in the 2019 calendar year of between $50,000 and $1-million, verifiable by Canada Revenue Agency documentation (a T4 summary of remuneration paid, or T4SUM), are eligible.
On May 20th, the federal government announced an expansion to the eligibility criteria for the Canada Emergency Business Account (CEBA) to include many owner-operated small businesses.
The program will now be available to a greater number of businesses that are sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll.
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. To date, over 600,000 small businesses have accessed the CEBA, and the government will work on potential solutions to help business owners and entrepreneurs who operate through their personal bank account, as opposed to a business account, or have yet to file a tax return, such as newly created businesses.
Who doesn’t qualify?
Businesses that were behind on their payments for an existing loan on March 1 of this year are not eligible for CEBA loans.
Businesses owned by a government body or an elected official cannot receive a CEBA loan.
Most union, charitable, or religious organizations are not eligible under the CEBA program.
How do you apply?
Qualifying businesses apply online through the bank or financial institution that holds their primary business operating account.
Applicants need their T4SUM document from the Canada Revenue Agency, as well as their 15-digit CRA business number or employer’s account number. Bank account information is also required.
Banks such as Toronto-Dominion Bank, Bank of Montreal and Canadian Imperial Bank of Commerce require those applying to have online business banking set up.
Business Credit Availability Program (BCAP)
The federal government has established a Business Credit Availability Program (BCAP) to provide $40 billion of additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).
BDC and EDC are working with private sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation, exports and tourism.
- Small Business Loan: Up to $100,000 can be obtained online.
- Working capital loan: For loans over $100,000 and can support everyday operations.
- Purchase Order Financing: Loans to fulfill domestic or international orders.
If you have specific questions about applying for funding, BDC can be reached at the toll-free number: 1-877-232-2269 Monday to Friday, from 7:30 a.m. to 8:00 p.m. (Eastern Time) and Saturday and Sunday from 9:00 a.m. to 5:00 p.m. (Eastern Time). They also have an online assessment tool.
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 to SMEs.
Co-Lending Program for Small and Medium-Sized Enterprises
BDC is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements.
Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.
These programs will roll out in mid-April and interested businesses should work with their current financial institutions.
New Business and Wage Subsidy Programs
Canada Emergency Wage Subsidy Provides Help to Employers by covering 75% of wages
On March 18, the Government announced a 10% wage subsidy up to $25,000. After Conservatives and business leaders pointed out that 10% just was not enough to help businesses struggling with shut-downs and huge declines in revenue, the government increased its wage subsidy to 75% on April 8.
When you apply for the Canada Employment Wage Subsidy (CEWS), you will be asked to enter amounts such as the number of eligible employees and gross payroll. You can determine these amounts and preview your subsidy claim, based on information you enter. The calculator is a tool to help you estimate the amount of your wage subsidy.
Before you calculate your subsidy, make sure you are eligible to apply by clicking here.
After you apply for the wage subsidy, your claim will be subject to verification.
You can calculate your total wage subsidy amount here.
Applications for the Canada wage subsidy opened on April 27th. You can apply here.
How much does the new wage subsidy provide?
Between March 15, 2020 and June 6, 2020, the government will provide a wage subsidy for each employee that is 75% of remuneration up to $847 per week. Employers are expected to make “best efforts” to pay employees their full earnings, where possible, and there is no maximum overall limit on the total subsidy that an employer can claim.
Eligible remuneration may include salary, wages, and other remuneration like taxable benefits. However, it does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.
A special rule will apply to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of the lesser of $847 per week and 75 per cent of the employee’s pre-crisis weekly remuneration. The subsidy would only be available in respect of non-arm’s length employees employed prior to March 15, 2020.
There would be no overall limit on the subsidy amount that an eligible employer may claim.
Who is eligible?
Employers who experience a reduction in gross revenues of at least 15% in March and 30% in April or May will be able to access the subsidy. Employers have the choice between two methods to show the drop in revenues. They can compare their revenue of March, April and May 2020 to that of the same month of 2019, or they can compare it to an average of their revenue earned in January and February 2020. Employers are also allowed to measure revenues either on the basis of accrual accounting (as they are earned) or cash accounting (as they are received)
The subsidy is available to individuals, corporations, partnerships of eligible employers, as well as non-profit organizations and charities. Public sector entities are not eligible. The Government also announced that it will offer additional flexibility to charities and non-profit organizations on how they calculate the declines in revenue, and they can exclude government funding from those calculations.
How do I apply?
Eligible employers can apply for the CEWS through the Canada Revenue Agency’s My Business Account portal. The government expects to have the portal running some time in May. Employers should keep records to verify the decline in revenues and the remuneration paid to employees.
Emergency Wage Subsidy Example: Bruno and Tisha run a floral shop in Burnaby, British Columbia. They have four full‑time employees, each earning $800 per week, and 6 part-time employees, each earning $400 per week, for a total weekly payroll of $5,600. Bruno and Tisha have closed their shop and are only fulfilling online orders during this challenging period. They are keeping all of their employees on the payroll, paying them their full regular wages, despite their revenues being down by 30 per cent. Bruno and Tisha would be eligible for a weekly wage subsidy of $4,200 ($600 for each of their full-time employees and $300 for each of their part-time employees).
Eligibility would generally be determined by the change in an eligible employer’s monthly revenues, year-over-year, for the calendar month in which the period began.
For example, if revenues in March 2020 were down 50 per cent compared to March 2019, the employer would be allowed to claim the Canadian Emergency Wage Subsidy on remuneration paid between March 15-April 11, 2020.
The table below outlines each claiming period and the period in which it has a decline in revenue of 30 per cent or more.
|Periods for CEWS Calculation|
|Claiming period||Required reduction in revenue||Reference period for eligibility|
|Period 1||March 15
|15%||March 2020 over:
|Period 2||April 12
|30%||April 2020 over:
|Period 3||May 10
|30%||May 2020 over:
An eligible employee is an individual who is employed in Canada.
Eligibility for the CEWS of an employee’s remuneration, will be limited to employees that have been without remuneration for more than 14 consecutive days in the eligibility period, i.e., from March 15-April 11, from April 12-May 9, and from May 10-June 6.
This rule replaces the previously announced restriction that an employer would not be eligible to claim the CEWS for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit.
Interaction with 10% Wage Subsidy
On March 25, 2020, the COVID-19 Emergency Response Act, which included the implementation of a temporary 10 per cent wage subsidy, received Royal Assent. For employers that are eligible for both the CEWS and the 10 per cent wage subsidy for a period, any benefit from the 10 per cent wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the CEWS in that same period.
Interaction with the Work-Sharing Program
On March 18, 2020, the Prime Minister announced an extension of the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks for employers affected by COVID-19. This measure will provide income support to employees eligible for Employment Insurance who agree to reduce their normal working hours because of developments beyond the control of their employers.
For employers and employees that are participating in a Work-Sharing program, EI benefits received by employees through the Work-Sharing program will reduce the benefit that their employer is entitled to receive under the CEWS.
Refund for Certain Payroll Contributions
The Government is proposing to expand the CEWS by introducing a new 100 per cent refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. This refund would cover 100 per cent of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim for the CEWS for those employees.
In general, an employee will be considered to be on leave with pay throughout a week if that employee is remunerated by the employer for that week but does not perform any work for the employer in that week. This refund would not be available for eligible employees that are on leave with pay for only a portion of a week.
This refund would not be subject to the weekly maximum benefit per employee of $847 that an eligible employer may claim in respect of the CEWS. There would be no overall limit on the refund amount that an eligible employer may claim.
For greater certainty, employers would be required to continue to collect and remit employer and employee contributions to each program as usual. Eligible employers would apply for a refund, as described above, at the same time that they apply for the CEWS.
$5,000 to help with relaunch costs
Alberta will give small and medium-sized businesses a one-time payment of 15 per cent of their monthly revenue to help with the cost of relaunch.
Businesses with fewer than 500 employees that were forced to close or had their revenues severely cut because of the COVID-19 pandemic will be eligible for the grant, capped at $5,000. The funds are to help businesses purchase non-medical personal protective equipment, pay wages, rent, or other supplies needed to reopen.
GST/HST Remittance Deferral
The GST/HST applies to sales of most goods and services in Canada and at each stage of the supply chain. Vendors must collect the GST/HST and remit it (net of input tax credits) with their GST/HST return for each reporting period.
Vendors with annual sales of more than $6 million remit and report monthly, and those with annual sales of $1.5 million to $6 million are able to remit and report on a quarterly basis (or monthly if they choose to). Small vendors can report annually.
The GST/HST amounts collected are generally due by the end of the month following the vendor’s reporting period: e.g., for a monthly filer, the GST/HST amounts collected on its February sales are due by the end of March.
To support Canadian businesses in the current extraordinary circumstances, the Minister of National Revenue will extend until June 30, 2020 the time that:
- Monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods;
- Quarterly filers have to remit amounts collected for the January 1, 2020 through March 31, 2020 reporting period; and
- Annual filers, whose GST/HST return or instalment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.
Businesses in need of information about their particular obligations may contact the Canada Revenue Agency or refer to its website.
Where can I find information about federal work-sharing including eligibility and applications?
Information for Alberta employees and employers
Coronavirus and small business: keeping you and your employees safe
Coronavirus disease (COVID-19): Resources for Canadian businesses
Support for entrepreneurs impacted by the coronavirus COVID-19