COVID-19: Round-up of Relief Measures

On Tuesday November 3, 2020, Prime Minister Justin Trudeau announced changes to the CanExport small and medium-sized business (“SME”) program. Announced during the 2018 Fall Economic update, the CanExport program is a five-year, $50-million program that provides direct financial assistance to SMEs looking to build new export opportunities, especially in high-growth emerging markets. This program is offered by Canada’s Trade Commissioner Service, Global Affairs Canada, in partnership with the National Research Council of Canada Industrial Research Program.

Changes to the adapted CanExport program now support business owners navigating COVID-19 trade barriers by helping them pay for international market certifications and requirements. The program is also pivoting to assist SMEs with developing and expanding their e-commerce presence by covering partial costs for online sales platforms, digital strategy advice, virtual tradeshows, advertising, and search engine optimization. Additional resources will also be made available specifically for women and Indigenous entrepreneurs.

Who can apply for the CanExport SMEs program?

Eligible Canadian small and medium-sized enterprises must:

• be for-profit;
• be an incorporated legal entity or a limited liability partnership (LLP);
• have a Canada Revenue Agency business number (unless registered on First Nations lands);
• employ 500 or fewer full-time equivalent employees; and
• have $100,000 to $100 million in declared revenue in Canada during its past fiscal year (or 12 months for quarterly filers).

Learn more about the CanExport SMEs program application here.

The Canada United Small Business Relief Fund (CUSBRF), which is managed by the Ontario Chamber of Commerce, will provide grants of up to $5,000 to offset the cost of expenses required to reopen safely or adopt digital technologies to move more of their business online. 

The details are the following:

• One application per ownership group
• For-Profit and Not-for-Profit organizations are eligible to apply
• Incorporated or sole proprietorship/partnership businesses are eligible to apply so long as they were operating as of March 1, 2020
• Eligible businesses cannot have more than 75 employees
• Eligible businesses must have at least $150,000 of sales but not more than $3,000,000
• Eligible businesses must have at least $1,000,000 of commercial general liability insurance
• Eligible businesses must continue to be in business on September 1, 2020
• Applicants must attach receipts and invoices, with proof of payment, to support the expenses/costs being claimed
• Applicants must submit the business’ GST/HST application or a recent GST/HST tax return and proof of business registration, business license, or Articles of Incorporation

There are three categories of purchases that are eligible for reimbursement under the program:

• Purchase of Personal Protective Equipment (PPE)
• Renovation of space to adhere to re-opening guidelines
• Enhancement of website/ developing e-commerce capability

Eligible expenses directly related to the above categories are permitted provided that purchases were made no earlier than March 15, 2020. All eligible expenses must be incremental and a direct result of adjusting operations for COVID-19 safety guidelines. Normal or usual ongoing business costs are not eligible.

More details can be found through the Ontario Chamber of Commerce.

The government previously announced that the Canadian Emergency Wage Subsidy (CEWS) would be extended through to June 2021. They just recently announced how the program would change for periods up to December 19, 2020 (nothing is known for subsequent periods yet).

The Canada Emergency Business Account (CEBA) has expanded, allowing businesses to access an additional $20,000 interest-free loan, for a total CEBA loan of $60,000. $10,000 of the additional $20,000 loan is forgivable if repaid by December 31, 2022.  The total forgiven loan amount is therefore $20,000 on the $60,000 CEBA. An attestation of the impact of COVID-19 on the business will be required to access the additional financing.

The application deadline for CEBA is being extended to December 31, 2020.

Further details, including the launch date and application process will be announced in the coming days.

In conjunction with financial institutions, the Business Development Bank of Canada (BDC) or the Export Development Canada (EDC), will offer credit to those businesses that need it. More information can be found here: BCAP.

On May 11, 2020, The federal government announced they will expand the BCAP to include mid-sized companies with larger financing needs with loans of up to $60 million per company, and guarantees of up to $80 million.

The Large Employer Emergency Financing Facility (LEEFF) was announced on May 11, 2020 with the goal of supporting employers with annual revenues of more than $300 million whose credit needs aren't being met through conventional financing, helping them protect jobs and weather the economic downturn caused by COVID-19.

The program is open to large commercial businesses that have a "significant footprint" in all sectors except those in the financial sector, as well as certain not-for-profit businesses like airports.

To qualify for LEEFF, an organization must:

• Be looking for financing of $60 million or more
• Have significant operations or workforce in Canada
• Not be involved in ongoing insolvency proceedings
• Impose limits on dividends and executive pay
• Commit to Canada’s climate change goals
• Not have a history of tax evasion

It is not intended to be a low-cost loan program for companies that don't need it or to bail out companies that were already in financial trouble before the pandemic.

The application process for LEEFF opens May 20, 2020. For more information visit the Canada Development Investment Corporation website: www.cdev.gc.ca

Insert ContentThe government has announced a series of measures such as the Canada Emergency Response Benefit which can provide a taxable benefit of $2,000 per month for up to the next four months for Canadians impacted by COVID-19. The support available will depend on the circumstances of each individual. The details of the benefits can be found here: Canada’s New Emergency Response Benefit.

Click here to visit the Department of Finance CERB FAQ page.

Effective February 9, 2021, self-employed Canadians who applied for CERB assessing the $5,000 income threshold on their 2019 gross income, rather than net income, will no longer be required to repay the benefit as long as they are otherwise eligible. This policy applies regardless of whether applicants accessed CERB through the Canada Revenue Agency or through Service Canada. Those who meet the qualifications and have already repaid their CERB will see the money returned to them.

Effective September 26, 2020, the Canadian Recovery Benefit (“CRB”) replaced the Canada Emergency Response Benefit (“CERB”) as a means to support Canadians who are self-employed, have lost their jobs or had their income reduced by at least 50 per cent due to COVID-19 and who do not otherwise qualify for Employment Insurance (EI).

To be eligible, applicants for the CRB must meet several conditions, including having earned a minimum of $5,000 in 2019, in 2020, or in the 12 months preceding their first application for this benefit — either from employment, self employment. EI, maternity or parental benefits or from Quebec Parental Insurance Plan (QPIP) benefits - and be actively looking for work. Refer to the link below for more details. 

The CRB is $1,000 per week before taxes for a two-week period. The Canada Revenue Agency withholds 10 per cent tax at source, translating to an after-tax payment of $900 per two-week period. If eligible, the CRB is available for up to 26 weeks or 13 eligibility periods between September 27, 2020 and September 25, 2021.

Is the CRB Taxable?

The CRB is considered taxable income. The 10 per cent tax withheld at source may not be the only tax paid. This amount is dependent on how much income from all sources was earned in the calendar year.

You may collect CRB payments while earning employment of self-employment income; however, you will have to reimburse $0.50 of the CRB for every dollar of net income you earn above $38,000 (excluding CRB benefits) in the calendar year. This reimbursement is payable when your tax return for the particular year is due.

More information can be found here: Canadian Recovery Benefit (CRB)

The Canada Recovery Caregiver Benefit (“CRCB”) provides income support for people who do not qualify for Employment Insurance (EI) and who are unable to work because they must care for their child who is under the age of 12 years, or a family member who needs supervised care.

To qualify for the CRCB, individuals must meet the following criteria:

• You live in Canada, are at least 15 years old, and have a Social Insurance Number (SIN);
• You are employed or self-employed on the day before you would get a CRCB payment;
• You are unable to work at least 50% of your scheduled work week because you are caring for a family member.
• You earned at least $5,000 in 2019 or in the 12 months before you apply; and
• You are not eligible for EI (usually those who are self-employed, independent contractors, or “gig workers”).
• You did not apply for or receive benefits for the same period under the CRB, CRSB, short-term disability, workers’ compensation, EI or QPIP.
• You are the only person in the household who is applying for the CRCB.

If you are eligible for the CRCB, your household can receive $500 ($450 after taxes withheld) for each one-week period.

If your situation continues past one week, you will need to apply again. You may apply up to a total of 26 weeks between September 27, 2020 and September 25, 2021.

You apply for the CRCB for two weeks at a time through your online CRA MyAccount. You must wait until after you have missed work to apply, and you must apply within 60 days of missing work.

More information can be found here: Canada Recovery Caregiving Benefit (CRCB).

The Canada Recovery Sickness Benefit (“CRSB”) gives income support to employed and self-employed individuals who are unable to work at least 50 per cent of their work week because they are sick or need to self-isolate due to COVID-19, or have an underlying health condition that puts them at greater risk of getting COVID-19.

To be eligible for the CRSB, applicants must:

• Live in Canada, be at least 15 years old, and have a Social Insurance Number (SIN);
• Are employed or self-employed on the day before you would get a CRSB payment;
• Have earned at least $5,000 in 2019 or in the 12 months before you apply;
• Not be receiving sick leave or disability benefits during the weeks that you apply for; and
• Not receiving benefits under EI, short-term disability, workers’ compensation,  CRB or CRCB.

If you are eligible for the CRSB, you can receive $500 ($450 after taxes withheld) for a one-week period.

If your situation continues past one week, you will need to apply again. You may apply up to a total of 2 weeks between September 27, 2020 and September 25, 2021.

More information can be found here: Canada Recovery Sickness Benefit (CRSB).

Effective September 27, 2020, the Federal Government introduced a new simplified Employment Insurance (“EI”) program to better support Canadians looking for work.

If you were receiving the CERB through Service Canada on September 27, 2020, then you should be automatically switched to EI. If you were receiving the CERB through the Canada Revenue Agency, then you will need to apply for EI. After October 3, 2020, you will also need to apply for EI if you cannot work because of COVID-19.

Individuals may be eligible for EI if they:

• were employed for at least 120 insurable hours in the past 52 weeks;
• received the CERB (the 52-week period to accumulate insured hours will be extended);
• stopped working through no fault of their own;
• did not quit their job voluntarily;
• are ready, willing, and capable of working each day (EI regular benefits); or
• are temporarily unable to work while they care for someone else or themselves (EI maternity, parental, sickness, compassionate care, and family caregiver benefits).

If you are eligible for EI benefits, you will receive a minimum taxable benefit at a rate of $500 per week, or $300 per week for extended parental benefits.

More information can be found here: Increased Access to Employment Insurance (EI)

On April 24, Prime Minister Justin Trudeau announced a much-anticipated commercial rent relief initiative for small businesses affected by COVID-19. In partnership with the provinces and territories (which have jurisdiction over the rental market), commercial rent will be lowered by 75 per cent for impacted small businesses.

The Canada Emergency Commercial Rent Assistance (CECRA) will provide forgivable loans to qualifying commercial property owners, covering 50 per cent of monthly rent for April, May and June. Effectively, commercial property owners will receive 75 per cent of their pre-coronavirus rental revenues for April, May and June – 50 per cent funded by the government in the way of these forgivable loans and 25 per cent received directly from the tenant. The federal Canada Mortgage and Housing Corporation (CMHC) will administer and deliver the CECRA. 

Learn more about the requirements in our CECRA for Small Businesses Infographic here. 

As of May 25, 2020 the registration portal is now open but to manage volume they are staggering the registration dates by region: 

• Monday - Property owners in Atlantic Canada, BC, Alberta and Quebec, with up to 10 eligible tenants
• Tuesday - Property owners in Manitoba, Saskatchewan, Ontario and the Territories, with up to 10 eligible tenants
• Wednesday - All other property owners in Manitoba, Saskatchewan, Ontario and the Territories
• Thursday - All other property owners in Atlantic Canada, BC, Alberta and Quebec
• Friday - All

For more information visit the Canadian Mortgage and Housing Corporation (CMHC) site here.

The government has announced a series of measures such as the Canada Emergency Response Benefit which can provide a taxable benefit of $2,000 per month for up to the next four months for Canadians impacted by COVID-19. The support available will depend on the circumstances of each individual. The details of the benefits can be found here: Canada’s New Emergency Response Benefit. 

Click here to visit the Department of Finance CERB FAQ page. 

On April 22, Prime Minister Justin Trudeau, announced that post-secondary students will be eligible for a new Canada Emergency Student Benefit (“CESB”) as part of a $9 billion package of new measures geared at helping students.

Post-secondary students will be eligible to receive $1,250 per month from May to August 2020.  If the student is taking care of someone else or has a disability him/herself, the monthly amount will be increased to $2,000.  In addition, students who are earning less than $1,000 per month can also apply for the CESB.

College and university students currently attending school, planning to attend post-secondary school in September, or who graduated in December of 2019 are eligible for the CESB. Canadian students studying abroad and who meet one of the above criteria are also eligible.

The application process is opening May 15, 2020 via the CRA MyAccount.

The Canada Revenue Agency has introduced a 75% wage subsidy to eligible employers. Initial details were released April 1, 2020, with further updates to the subsidy and eligibility criteria announced on April 8 and 11, 2020. More information about the wage subsidy can be found here: Canada Emergency Wage Subsidy.

Details regarding the application options and process can be found here: How to Apply for the Canada Emergency Wage Subsidy, A Step by Step Guide.

On May 15, 2020, the government announced that the emergency wage-subsidy program would be extended by an additional 12 weeks to August 29, 2020. Over the next few weeks, the government will be consulting with business and labour representatives on potential adjustments to the program including the 30 per cent revenue decline threshold.

Regulatory changes have also been made to extend CEWS eligibility to the following groups:

• Registered journalism organizations
• Registered amateur athletic associations
• Tax-exempt indigenous government-owned organizations
• Non-public schools and colleges, such as driving schools, language schools and arts schools
• Partnerships with non-eligible members as long as the non-eligible members are not majority-interest owners

On July 17, 2020, the government announced that the CEWS will be extended until December 19, 2020 and has released draft legislation to support the extension until November 21, 2020. Read more about CEWS 2.0 here.

You are generally eligible for the GST/HST credit if you are considered a Canadian resident for income tax purposes the month before and at the beginning of the month in which the Canada Revenue Agency makes a payment. You also need to meet one of the following criteria:

• You are at least 19 years old;
• You have (or had) a spouse or common-law partner; or
• You are (or were) a parent and live (or lived) with your child.

Parents in a shared custody situation may be eligible for half of the GST/HST credit for that child. This also applies to any related provincial and territorial credit.

If, however, a child welfare agency is legally, physically, or financially responsible for a child, you are not generally eligible for the GST/HST credit for that child.

Starting May 2020, GSTC will be doubled for the 2019- 2020 benefits year, providing an additional benefit of up to $400 for singles and up to $600 for couples. No application is required but the individual must file a tax return for the year to receive it.

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 must remit amounts collected for the February, March and April 2020 reporting periods;
• Quarterly filers must 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, must remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year. 

Please note that the announcement does not extend the deadline to file the GST/HST return; however the CRA has also announced that they will waive the late-filing penalties if the GST/HST returns are filed by June 30, 2020. The CRA provides the following guidance:

"The deadline for businesses to file their returns is unchanged. Those who are able to should continue to file their GST/HST returns on time reporting their net tax for the reporting period to help facilitate tax compliance and administration. However, recognizing the difficult circumstances faced by businesses, the CRA won’t impose penalties where a return is filed late provided that it is filed by June 30th."

In addition, we do not know for certain if this relief applies to businesses not owned by Canadians as there is no legislation. Please refer to the resource hub for additional comments regarding provincial sales tax matters.

Read our full summary here.

On July 27, 2020, the CRA announced it will also be waiving interest on existing tax debts from April 1, 2020, to June 30, 2020, for goods and services tax/harmonized sales tax (GST/HST) returns. Read more here.

The deadline for paying corporate tax balances or installments that become payable on or after March 18, 2020, is extended to September 1, 2020 with no accrual of interest or penalties. No action is required to take advantage of this measure. Read our full post for details: Support for Canadians and Businesses.
Note: Only applies to tax under Part I of the Income Tax Act.

On May 25, 2020, it was announced that the CRA will allow all businesses to defer the filing of their T2 Corporation Income Tax Returns otherwise due in June, July or August, to September 1, 2020.

Then on July 27, 2020, the CRA announced a further extension of the payment due date for current year individual, corporate, and trust income tax returns, including instalment payments, from September 1, 2020, to September 30, 2020. Penalties and interest will not be charged if payments are made by the extended deadline of September 30, 2020. This includes the late-filing penalty as long as the return is filed by September 30, 2020. Read our full summary of this announcement here. 

On May 25, 2020, it was announced that the deadlines for filing T3 Trust Income Tax Returns that would otherwise be due in June, July or August, has been extended to September 1, 2020.

Then on July 27, 2020, the CRA announced a further extension of the payment due date for current year individual, corporate, and trust income tax returns, including instalment payments, from September 1, 2020, to September 30, 2020. Penalties and interest will not be charged if payments are made by the extended deadline of September 30, 2020. This includes the late-filing penalty as long as the return is filed by September 30, 2020. Read our full summary of this announcement here.

On May 12, 2020, the federal government announced a one-time, tax free payment to help seniors struggling because of COVID-19. Canadians who currently receive Old Age Security (OAS) will be given $300 and those who are eligible for the Guaranteed Income Supplement (GIS) will receive an additional $200. 

Businesses can enter into a Work Sharing Program with employees that would see employees temporarily share responsibilities under reduced hours of employment. In these circumstances, employees may still be eligible for EI benefits under this program. More information can be found here: Work Sharing.