COVID-19 Business Support Programs

The unprecedented impact that COVID-19 is having on our society and economy prompted the federal government to implement significant programs to help support small- and medium-sized businesses. Here is a brief synopsis of the main support programs available to business owners:

Canada Emergency Wage Subsidy (CEWS)

This program covers 75% of an employee’s wages up to $847 per week for employers who have suffered a drop in gross revenues of at least 15% in March, and 30% in April and May.  CEWS eligible employers are entitled to receive a 100% refund for certain employer contributions to Employment Insurance and the Canada Pension Plan.

Business Wage Subsidy

The 10% wage subsidy will allow eligible employers to reduce the amount of payroll deduction remitted to CRA for a period of 3 months, up to a maximum of $1,375 per employee and $25,000 per employer.  For employers who are eligible for both the 10% wage subsidy and the CEWS for a period, any benefit from the 10% wage subsidy would reduce the amount available under the CEWS.

Canada Emergency Business Account (CEBA)

This program is meant to help cover operating costs for small businesses and not-for-profit organizations by providing up to $40,000 interest-free loans.  Repayment of the balance of the loan before December 31, 2022 will result in loan forgiveness of 25% (up to $10,000). To qualify, organizations must demonstrate they paid between $50,000 to $1,000,000 in total payroll for 2019.

Corporate Income Tax Return & Payment Deferral

The corporate tax return due date has been extended to June 1, 2020. Corporations that owe Part I income tax balances or income tax installments have until September 1, 2020 to remit these amounts.  No penalties or interest will apply to any tax returns filed or payments made until the extended due dates.

Business Credit Availability Program (BCAP)

This program provides $40 billion of additional financing support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). This will provide loan guarantees for small and medium-sized businesses to help them meet operational cash flow requirements. Interested businesses should work with their current financial institution to access this program.

Canada Emergency Response Benefit Act (CERB)

Self-employed individuals qualify for a $2,000 per month taxable benefit for up to four months. This is applicable to sole-proprietors who lose income for reasons related to COVID-19 including illness, quarantine, caring for family members and work disruption.

Your Financial Advisor can discuss these and other government support programs with you to determine which might be beneficial in your situation.

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