Canwest Accounting has received several calls from business owners with questions about some of the federal government subsidies and aid programs available during the unprecedented COVID-19 crisis.
“We know this is a tough time for businesses and individuals who are wondering how they’ll come up with their next rent or mortgage payment, and how to support their staff,” said Sharlane Bailey, Owner of Canwest Accounting. “We’re here to advise our clients on what programs may be the best fit for them.”
The main COVID-19 programs we’ve received questions about.
Canada Emergency Response Benefit (CERB)
Applications for this $2,000/month benefit for up to four months opened on April 6. This is available to those who are not working due to COVID-19 closures, and who have not already applied for Employment Insurance benefits. Here is a link to information and an application for CERB.
Canada Emergency Wage Subsidy (CEWS) program
CEWS subsidizes 75% of wages up to the first $58,700 earned by employees and will be in place to cover the period from March 15 to June 6. This applies to a variety of companies and non-profit organizations that can demonstrate a revenue drop of 30% over the same period last year due to the COVID-19 pandemic. Sharlane cautions that employers will still need to pay their employees at the usual intervals and wait up to 6 weeks to be reimbursed by the government. “Can a business with limited or no income afford to continue to pay their staff’s wages? Employers need to consider this very carefully,” Sharlane said. Here is a link to more information about CEWS.
10% Wage Subsidy for Employers
For those businesses that don’t qualify for the 75% wage subsidy, there is a subsidy equal to 10% of the remuneration you pay from March 18 to June 19 of up to $1,375 for each eligible employee to a maximum of $25,000 total per employer. Click here for more information.
Canada Emergency Business Account
This new program launched right before Easter, will provide interest-free loans through banks of up to $40,000 to small businesses and non-profits to help them pay their operating costs during the crisis. To qualify, an organization needs to demonstrate they paid between $20,000 and $1.5 million in total payroll in 2019. Up to $10,000 of the loan will be eligible for complete forgiveness if $30,000 is fully repaid on or before Dec. 31, 2022. Sharlane cautions businesses to consider how they will use the funds and whether they can pay it back by Dec. 31, 2022. “It could make sense if you are using it to open an online store to continue sales of your merchandise, for example, but remember you still need to pay the money back,” Sharlane said. Here is a Q&A to help answer business owners’ questions.
Tax Deadline Extensions
The federal government has extended the deadline for personal tax returns to June 1, while those who are self-employed still need to file by June 15. However, if you owe tax, you don’t need to pay until Sept. 1, which includes the June 15 installment payment for those who have to pay by installments. Additionally, for those businesses that collect GST, you don’t need to pay until the end of June, and for PST, you don’t need to file or pay until the end of June. Despite these deadline extensions, Sharlane strongly recommends planning to have your tax return ready for April 30, so that if you are getting a refund you’ll receive that money sooner. See Revenue Canada’s updated list of tax deadlines.
To have the exceptional team at Canwest Accounting save you time and money by answering your questions about what government emergency programs you may qualify for or by preparing your tax return, call or email us. We are set up to do most things electronically and can facilitate non-contact drop-off and pick up of documents.
The suggestions and advice provided by Canwest Accounting should not be relied upon in place of professional advice. You are responsible for checking the accuracy of relevant facts and opinions provided.