CEWS Update July 20, 2020
On July 17th the federal government proposed extending the Canada Emergency Wage Subsidy (CEWS) until December 19, 2020
Also the subsidy would be accessible to a broader range of employers by eliminating the requirement for a minimum 30 percent revenue decline.
Effective July 5, 2020, the CEWS is set to consist of two parts:
- A base subsidy available to all eligible employers who are experiencing a decline in revenues, with the subsidy amount varying depending on the scale of revenue decline; and
- A top-up subsidy of up to an additional 25 percent for those employers who have been most adversely affected by the COVID-19 crisis.
The proposed CEWS changes will be debated in the House of Commons this week.
COVID-19 Update-May 2020
CRA has announced economic measures to assist businesses through these difficult times. We are working to keep you informed of any updates from federal and provincial governments.
Accountants have been deemed an essential service from the Ontario government and we will do our part to ensure businesses meet obligations. We are still able to meet the needs of Canadian businesses as we are opened virtually. Most of our business clients have continued to enjoy our services virtually.
We want to provide some information on what businesses are doing these days and also provide and update on information that has been released to date.
Businesses are faced with tough decisions these days and find themselves having to pivot and reinvent themselves quickly. Preservation of cash is necessary. CRA tax measures will assist during this stressful time bit its also important to review historical financials statements.. For instance reviewing expenses the other day with a client we discussed having employees stop the use of the 407 ETR, for a while any way, as roads are not congested. A 5 year review of your financials is recommended. We can provide you with a 5 year summary if necessary. Another exercise would be to do a 6 month cash flow to highlight short term cash needs.
Businesses and individuals should be connected to government through the CRA portals. This allows you to update direct deposit information so receipt of funds is faster.
The following is a list of measures provided by all levels of government. These may or may not be applicable to your specific situation.
Temporary Wage Subsidy.
- The subsidy will be a 10% deduction when submitting payroll deductions
- Most payroll providers have updated and are putting this into effect
- For further information on the wage subsidy follow this link.
Canada Emergency Wage Subsidy.
- The subsidy will cover 75% of salary up to the first $58,700 earned by an employee up to $847 a week.
- Businesses who have seen at least a 30% decrease in gross revenue
- For further information on the wage subsidy follow this link.
Business Credit Availability Program
Canada Emergency Business Account
- The new Canada Emergency Business Account will provide interest-free loans of up to $40,000 to small businesses and not-for-profits,
- To qualify, these organizations need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.
Loan Guarantee for Small and Medium-Sized Enterprises
- EDC is working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to SMEs.
Co-Lending Program for Small and Medium-Sized Enterprises
- BDC is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements.
- Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.
These programs will be available three weeks after March 27 and interested businesses should work with their current financial institutions. Some will be ready the week of April 6th.
The Business Development Bank (BDC) can assist you if you are either an entrepreneur or a small business with these three options. To contact the BDC, either reach them at their financing request page or through their toll-free contact number at 1-877-232-2269 (Monday to Friday, from 7:30 a.m. to 8:00 p.m. Saturday and Sunday from 9:00 a.m. to 5:00 p.m.).
The Export Development Canada is designed to assist exporting companies with relief options. You can reach them by emailing tradeadvisor-conseiller@edc.ca, calling 1-800-229-0575 between 9 a.m. and 5 p.m. ET, or submitting an inquiry online.
Employment Insurance
The Government of Canada has announced a monthly Canada Emergency Benefit. The Canada Emergency Response Benefit (CERB) is a taxable benefit that will provide:
- CERB provides $2,000 a month, for up to four months, for workers who lose their income as a result of the COVID-19 pandemic.
- This program is specifically aimed at workers who would not normally be eligible for EI.
- Visit the government website to learn more about dates etc CERB.
Tax Assistance
Deferral of Sales Tax Remittance
Businesses, including self-employed individuals, can now to defer the following until June 30, 2020
- Payments of the Goods and Services Tax/Harmonized Sales Tax (GST/HST)
- Customs duties owing on their imports.
- The deferral will apply to GST/HST remittances for the February, March and April 2020 reporting periods for monthly filers;
- The January 1, 2020 through March 31, 2020 reporting period for quarterly filers;
- For annual filers, the amounts collected and owing for their previous fiscal year and installments of GST/HST in respect of the filer's current fiscal year.
- For GST and customs duty payments for imported goods, the deferral will include amounts owing for March, April, and May.
Deadline Extensions
- The 2020 tax deadline has been extended to June 1st, 2020.
- Payment deadline for those who owe taxes has been deferred until after September 1, 2020.
The Government of Canada has launched a dedicated page for Canadian businesses to provide them with the information and resources to navigate the challenges of COVID19 which can be accessed here.
Additional resources:
- The Government has changed rules on the Work-Sharing Program. Details here
- Cutting taxes for employers through a temporary increase to the Employer Health Tax (EHT) exemption.
- WSIB deferral of payments here
- Most all municipalities have deferred personal and commercial property taxes so check their websites.
There is a lot of information out there and so recommend to attend online information sessions and continue to ask questions. This is the time we all look for guidance and will continue to support each other. If you are interested in online sessions please let us know and we will add you as they come up.
Please reach to anyone on our team and we will get you the answers you need and provide more information on how we can assist.
To learn more you can visit these pages on the Government of Canada's website:
