The federal government has enacted measures valued at more than $250 billion to mitigate the financial impacts of COVID-19. The highlights below cover business loans, rent relief, wage subsidies and workplace guidelines.
The Canada Emergency Wage Subsidy is a federal benefit designed to help businesses cover up to 75% of wages and keep their employees on payroll.The benefit will pay 75% of the first $58,700 normally earned by employees, up to $847 per week. The subsidy is expected to last for three months — retroactive from March 15 to June 6. The government said the funds will start to flow around early May.
Employers who can show that their revenues have fallen by at least 15% for the month of March — compared to either an average of January and February 2020 revenue, or compared to March 2019 revenue — will be eligible for the benefit. In April and May, employers who can show their revenues have fallen by at least 30% (against either Jan./Feb. 2020, or the same month last year) will be eligible.
The Canada Revenue Agency has launched an online tool that helps business owners calculate the amount they’ll be eligible for and preview their subsidy claims. Employers will receive a 100% refund for EI and CPP/QPP contributions for furloughed employees. Employees receiving the benefit cannot apply for other unemployment benefits.
Organizations that don’t qualify for the Canada Emergency Wage Subsidy may still qualify for the previously announced wage subsidy of 10%. Employers can apply for the wage benefit through the Canada Revenue Agency’s My Business Account portal.
The work-sharing program — whereby employees whose hours get reduced by an average of 10% to 60% can claim employment insurance for lost wages — has been extended to 76 weeks from 38.
Canada Emergency Commercial Rent Assistance provides forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments payable by eligible small business tenants experiencing financial hardship during April, May and June.
The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75% for the three corresponding months under a rent forgiveness agreement, which will include a pledge not to evict the tenant while the agreement is in place.
The small business tenant would cover the remainder, up to 25% of the rent. Affected small business tenants are those paying less than $50,000 per month in rent and who have temporarily ceased operations, or have experienced at least a 70% drop in pre-COVID-19 revenues.
Loans for businesses are being offered through the Business Credit Availability Program (BCAP), which is providing $65 billion of support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Those agencies are providing credit through banks.
The Canada Emergency Business Account mandates government-guaranteed bank loans of up to $40,000 for small businesses. The loans will be interest-free until Dec. 31, 2022, and up to $10,000 can be waived for repayment. Businesses must demonstrate they paid between $20,000 and $1.5 million in total payroll in 2019.
These programs will be available in mid-April through businesses’ current financial institutions. Read advice from tax experts on accessing loans and other measures businesses can take.
In addition, here are a couple of government links to help companies in operating their workplaces and businesses during COVID-19
Source: Investment Executive