To our clients,
As you are likely aware over the last few weeks the federal government has made announcements concerning a number of different financial relief programs, they are in the process of rolling out. This update will attempt to summarize and provide links to some of the main programs affecting individuals and businesses.
There are three main programs. See this link for more details:
- Increases to the Canada Child Benefit – an extra $300 per child
- A special one-time GST/HST credit payment starting April 9th
- Extended deadline for filing personal tax returns – as discussed in previous updates, currently the April 30th deadline has been pushed back to June 1st and payment deadlines have been pushed to August 31st.
FOR PEOPLE FACING UNEMPLOYMENT / WHO ARE UNABLE TO WORK / WHO ARE SICK, QUARANTINED OR IN SELF-DIRICTED ISOLATION:
The main program the federal Government has introduced is the Canada Emergency Response Benefit (CERB). Information on the CERB can be found here:
https://www.canada.ca/en/services/benefits/ei/cerb-application.html including how to apply for this benefit. Basic eligibility requirements include:
- Residing in Canada and being at least 15 years old,
- You have stopped working because of COVID-19 and have not voluntarily quit your job,
- You had income of at least $5,000 in 2019 or in the 12 months prior to date of application, and
- You are expected to be without employment/self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, you expect to have no employment income.
Please review the eligibility guidelines provided by Service Canada and compare with regular EI benefits if you have been laid off.
There are a number of suggested programs coming online through various levels of government and financial institutions, however here are three most likely to be of benefit:
(1) The Canada Emergency Wage Subsidy
This is the 75% wage subsidy program recently announced. Details continue to emerge about who will qualify and how to apply, however a good starting point for information can be found here:
The key eligibility requirements for this program are that (a) you continue to pay your employees (including business owners); and (b) you can demonstrate a decrease in revenue for March 2020, of at least 30% as comparted to March 2019. The subsidy is applied for monthly for March, April and May 2020. The 30% test applies for each month. It may be that you qualify in one month but not in another.
Application for this subsidy will be through the My Business Account portal through CRA as well as another on-line portal still to be determined.
(2) The Temporary Wage Subsidy for Employers
This is the original 10% payroll remittance reduction plan that was first introduced by the federal government a few weeks back. Details on this subsidy can be found here:
If your company does not qualify for the Canada Emergency Wage Subsidy, it might qualify for the temporary wage subsidy. Each program comes with it’s own set of qualifying factors.
(3) The Canada Emergency Business Account (CEBA)
Potentially, this program may provide the greatest short-term relief for many small businesses with an immediate injection of cash flow. This program is a $40,000 government guaranteed loan. The CEBA will be made available not through the Canada Revenue Agency of Service Canada, but rather directly through your own financial institution.
Please check with your own bank as soon as you can as each bank may be handling the administration of this account slightly differently. What you will need, at a minimum, to apply for this loan is your payroll account number (BN) and your T4 summary for 2019. To qualify, your business must have had between $50,000 and $1,000,000 in gross payroll in 2019.
It is my understanding, that this loan can only be applied for ONLINE. You will not be able to apply for this loan in-person at your bank. You will likely need to already have an online business banking relationship with your bank. If you do not, I would suggest getting this setup as soon as you’re able.
There is a lot of information and news reports coming out daily on various government programs. My advice is to go to government websites directly when looking for information related to a program. They are updated regularly, and this information is subject to change.
All of these programs are brand new and have been created and implemented within the last month. There will be challenges both in the application for and receiving benefit from these programs. Where we can, we will do our best to assist with your questions on these various programs. However, please understand that, as these are all new, the information that we will be accessing quite likely is the same as the information available to you.
We will do our best to provide you with information related to your business or personal tax situation if you do not already have it available (for instance, all businesses who filed T4’s for 2019 should have a copy of their T4 summary already available; or for individuals, if you need information from your 2018 tax return you should have a copy of your return in the white folder we provided to you last year as well as a copy of the Notice of Assessment CRA would have mailed you last year). As we are working for the most part remotely, we will make all reasonable attempts to get information to you promptly.
If you do have questions, please e-mail me at email@example.com
Blake Mercer and the Mercer and Mercer Team
firstname.lastname@example.org | 905-876-1144