Canadian Government Help to Business during COVID-19
Helping Businesses Keep their Workers
To support businesses that are facing revenue losses and to help prevent layoffs,
- Federal government will cover 75% of salaries for workers of qualifying small businesses affected by COVID-19.
- Eligible employers (non-profit organizations, charities, and certain Canadian Controlled Private Corporations) that pay remuneration to an employee, such as salary, wages, or taxable benefits, on or after March 18th and before June 20th, are permitted to reduce remittances of federal, provincial, or territorial income tax by the amount of the subsidy. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
Flexibility for Businesses Filing and Paying taxes
- The Canada Revenue Agency will allow all businesses to defer, until September 1, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
- The Minister of National Revenue will extend until June 30, 2020 the GST/HST remittances:
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 installment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and installments of GST/HST in respect of the filer’s current fiscal year.
The Canada Revenue Agency will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For most businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.
Ensuring Businesses Have Access to Credit
Canada Emergency Business Account, which will be implemented by eligible financial institutions in cooperation with Export Development Canada (EDC) interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus.
Small businesses and not-for-profits should contact their financial institution to apply for these loans.
To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).