We’ve been receiving a lot of questions about COVID-19 and what the shut down will mean for business owners. I’m sure you’re tired of hearing about the pandemic but we wanted to share some information you may find useful.
The Federal Government has announced an economic response plan to provide support for Canadians and Businesses. This post will share the highlights with you as of March 19, 2020.
Temporary Income Support
This applies to individuals who are sick, quarantined, forced to stay home for care for children, who do not receive sick pay:
- The 1 week waiting period to open an EI claim for individuals in quarantine has been waived as of March 15, 2020
- No requirement for medical certificate to access EI sickness benefits
- Emergency Care Benefit of up to $900 bi-weekly for up to 15 weeks. Accessible to workers and self-employed who are:
- Quarantined or sick but do not qualify for EI sickness benefit;
- People taking care of family members sick with COVID-19 but does not qualify for EI sickness benefit;
- Parents with children who require care or supervision due to school closures and unable to earn employment income, regardless of qualification for EI sickness
- Application for benefits will open in April 2020. Three ways to apply:
- CRA My Account
- My Service Canada Account
- Toll free number (not yet released)
Long-Term Income Support
For Canadians who lose their job or face reduced hours. Emergency support benefit of up to $5.0 billion to support workers and work share programs. More details to follow.
Targeted Income Support
- $305 million for indigenous communities
- Six-month interest-free moratorium on Canada student loans (CONTACT YOUR LENDER)
- Reduced minimum RRIF withdrawals by 25% for 2020
- $157.5 million to help homeless
- $50 million to womens shelters
- Individual tax filing deadline extended to June 1, 2020
Mortgage Default Tools
- CMHC (insured) mortgages are eligible for deferral beginning immediately (CONTACT YOUR LENDER).
The government has made a proposal to provide wage subsidies for eligible small employers. Legislation still pending.
- Businesses eligible for small business deduction qualify
- Still needs to be passed through legislation
- Will be equal to 10% of remuneration
- Maximum subsidy of $1,375 per employee and $25,000 per employer
- Will be paid by reducing remittances of income tax withheld on employees’ remuneration
More details will follow once enacted into legislation
CRA is permitting deferral of income taxes until after August 31, 2020, the payment of any income tax amounts become owing on March 18, 2020 to September 2020.
Business Credit Availability Program (BCAP)
- The Government is providing guarantees to the BDC to provide more than $10 billion in additional funding. Targeted towards small and medium sized businesses
- Domestic Stability Buffer is being reduced by 1.25% of risk weighted assets. Large banks will be able to inject $300 billion of additional lending (talk to your commercial banker)
If you have any questions or need help accessing any of these programs, please feel free to get in touch with us and we’ll do everything we can to help. There are still some areas of this that are somewhat ambiguous while the Government figures out how they are going to mechanically achieve this. I’ll keep you updated.
Thank you and stay safe!