Small and medium-sized businesses are the backbone of the Canadian economy. During this extraordinary time, the Government of Canada is taking strong action to help Canadian businesses as COVID-19 is affecting them, their employees and their families.
The Government and public health officials are urging all Canadians to:
- stay home unless it is absolutely essential to go out
- practice social distancing and good hygiene
For businesses, this means:
- facilitating flexible and remote work arrangements
- preparing your workplace for COVID-19
- understanding how to keep your employees safe
Four key considerations for businesses
1. Support for employees
No Canadian should have to worry about losing their job, paying their rent or putting food on the table because of COVID-19. That's why the Government is:
- waiving the one-week waiting period and the requirement for a medical certificate for employment insurance (EI) sickness benefits to provide immediate support for workers in quarantine
- temporarily boosting Canada Child Benefit payments to ensure working families have enough money to support their kids
- introducing an Emergency Support Benefit to provide support to workers facing unemployment who are not eligible for EI
- extending the tax filing deadline to June 1, 2020
- and much more
2. Support for businesses
Canada's strong fiscal position means we are well positioned to respond to challenges such as COVID-19.
Canada's coordinated approach to supporting the economy and the financial sector includes the Governor of the Bank of Canada cutting the interest rate to 0.75% and the Superintendent of Financial Institutions announcing an additional $300 billion in lending capacity by the major banks.
No employer should feel like they have to lay off a worker in the face of COVID-19. To further support businesses and their employees, the Government has announced:
- enhancing the Work-Sharing program to support employers and their workers who are experiencing a downturn in business
- a new Business Credit Availability Program to make more than $10 billion available to Canadian businesses in financing and credit insurance solutions through:
- the Canada Revenue Agency will defer tax payments until August 31, 2020, to help businesses with cash flow
- immediate relief for small businesses with a 10% wage subsidy for the next 90 days, up to a maximum of $1,375 per employee and $25,000 per employer
- a new Emergency Care Benefit of up to $900 biweekly for up to 15 weeks for self-employed people and others who are not eligible for EI sickness benefits
- increased credit available to farmers and the agri-food sector through Farm Credit Canada
- NOW AVAILABLE – an additional $5 billion to increase Farm Credit Canada's lending capacity to producers, agribusinesses, and food processors.
Assistance for tourism operators, small businesses or organizations
If you are a tourism operator, a small business or an organization affected by COVID-19 and need pressing assistance, the regional development agencies (RDAs) could assist you with access to federal funding and services.
It is also vital for Canadian businesses to have contingency plans in place to manage potential financial risk. The Canadian Chamber of Commerce has developed a comprehensive preparedness guide for businesses in the face of COVID-19.
The Canadian Federation of Independent Business is also providing information to help businesses through these difficult times.
3. Business travel and events
The Government is advising Canadians to:
- avoid non-essential travel outside of Canada until further notice
- if outside of Canada, return home and self-isolate for 14 days
To help bring Canadians home, the Government has created the COVID-19 Emergency Loan Program for Canadians Abroad.
When it comes to business conferences and events, the Government is advising against large gatherings of people.
4. Business in international markets
Canada and the United States are temporarily restricting all non-essential travel across our border. Essential travel will continue unimpeded to preserve supply chains between both countries and ensure that food, fuel and life-saving medicines reach people on both sides of the border.
The Trade Commissioner Service has experts in 160 cities worldwide who can provide small businesses with market-specific insights and guidance to help you mitigate the impacts of COVID-19, as well as access to funding to help you in global markets.
Government Resources Website Link: https://www.canada.ca/en/services/business/maintaingrowimprovebusiness/resources-for-canadian-businesses.html
5. Canadian Emergency Response Benefit (CERB)
- Canadians who have suffered job loss are eligible to receive $2,000 monthly for four months.
- This money will be deposited directly into bank accounts by the CRA.
- This benefit covers Canadians who are sick with COVID-19, have lost their job, are quarantined, taking care of someone who is sick and working parents who have to stay home with their children.
- An application website will be launched by the beginning of April.
- It will take about 10 days for approved applicants to see the first deposit into their account.
6. Additional Support for Canadian Businesses from the Economic Impact of COVID-19
The Government of Canada is making additional investments to support Canadian businesses from the economic impacts of COVID-19. These new investments provide support to financial institutions and allow them to quickly provide credit and liquidity options for a range of businesses.
These measures are a part of the Government of Canada’s COVID-19 Economic Response Plan, which provides direct support and tax deferrals to Canadian workers and businesses to help them in these difficult times.
Deferral of Sales Tax Remittance and Customs Duty Payments
In order to provide support for Canadian businesses during these unprecedented economic times, the Government is deferring Goods and Services Tax/Harmonized Sales Tax (GST/HST) remittances and customs duty payments to June 30, 2020.
This measure could provide up to $30 billion in cash flow or liquidity assistance for Canadian businesses and self-employed individuals over the next three months
GST/HST Remittance Deferral
The GST/HST applies to sales of most goods and services in Canada and at each stage of the supply chain. Vendors must collect the GST/HST and remit it (net of input tax credits) with their GST/HST return for each reporting period.
Vendors with annual sales of more than $6 million remit and report monthly, and those with annual sales of $1.5 million to $6 million are able to remit and report on a quarterly basis (or monthly if they choose to). Small vendors can report annually.
The GST/HST amounts collected are generally due by the end of the month following the vendor’s reporting period: e.g., for a monthly filer, the GST/HST amounts collected on its February sales are due by the end of March.
To support Canadian businesses in the current extraordinary circumstances, the Minister of National Revenue will extend until June 30, 2020 the time that:
- 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 instalment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.
Businesses in need of information about their particular obligations may contact the Canada Revenue Agency or refer to its website.
Deferral of Customs Duty and Sales Tax for Importers
Imported goods by businesses are generally subject to the GST, at a rate of 5 per cent, as well as applicable customs duties, which vary by product and country of origin. While the vast majority of imports enter Canada duty-free, some tariffs remain, especially on consumer goods.
The Customs Act, for which the Minister of Public Safety and Emergency Preparedness is responsible and which is administered by the Canada Border Services Agency (CBSA), governs the levying and payment of customs duties in Canada.
Typically, payments owing for customs duties and the GST on imports are due before the first day of the month following the month in which the Statements of Accounts are issued.
Section 33.7(1) of the Customs Act allows the Minister of Public Safety and Emergency Preparedness or an officer designated by the President of the CBSA to extend, in writing, the timeline for accounting or payment of amounts owing.
Under this authority, payment deadlines for statements of accounts for March, April, and May are being deferred to June 30, 2020.
Businesses in need of information about their particular accounting and payment obligations on imported goods may contact the Canada Border Services Agency for more details.
New Loan Programs for Businesses
Canada Emergency Business Account
To ensure that small businesses have access to the capital they need to see them through the current challenges, the Government of Canada is announcing the launch of the new Canada Emergency Business Account, which will be implemented by eligible financial institutions in cooperation with Export Development Canada (EDC).
This $25 billion program will provide 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.
This will better position them to quickly return to providing services to their communities and creating employment.
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).
A New Loan Guarantee for Small and Medium Enterprises
Small and medium-sized enterprises (SMEs) may be particularly vulnerable to the impacts of COVID-19. To support their operations, EDC will guarantee new operating credit and cash flow term loans that financial institutions extend to SMEs, up to $6.25 million.
The program cap for this new loan program will be a total of $20 billion for export sector and domestic companies.
A New Co-Lending Program for Small and Medium Enterprises
To provide additional liquidity support for Canadian businesses, the Co-Lending Program will bring the Business Development Bank of Canada (BDC) together with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements.
Eligible businesses may obtain incremental credit amounts up to $6.25 million BDC’s portion of this program is up to $5 million maximum per loan. Eligible financial institutions will conduct the underwriting and manage the interface with their customers. The potential for lending for this program will be $20 billion.
|Canada Emergency Business Account||$25B|
|SME Loan and Guarantee program|
|BDC Co-Lending Program||$20B|
Canada Revenue Agency’s Additional Measures for Individuals and Businesses
The Canada Revenue Agency (CRA) understands that individuals and businesses might be dealing with difficulties filing their income and benefit returns, and could experience cash-flow challenges in the coming months. In response, the CRA will be applying these additional measures:
Administrative tax measures
In addition to the income tax filing and payment deadline extensions, unless otherwise noted, administrative income tax actions required of taxpayers by the CRA that are due after March 18, 2020, can be deferred to June 1, 2020. These administrative income tax actions include returns, elections, designations and information requests. Payroll deductions payments and all related activities are excluded.
Trusts, Partnerships and NR4 Information Returns
The deadlines for trusts, partnership and NR4 information returns are all extended to May 1, 2020. This is due to administrative requirements in advance of the June 1, 2020 deadline for filing individual income tax and benefit returns.
Any objections related to Canadians' entitlement to benefits and credits have been identified as a critical service and will continue to be processed during the COVID-19 crisis. As a result, there should not be any delays associated with the processing of these objections.
With respect to objections related to other tax matters filed by individuals and businesses, the CRA is currently holding these accounts in abeyance. No collection action will be taken with respect to these accounts during this period of time.
Extending the deadline for filing an objection
For any objection request due March 18 or later, the deadline is effectively extended until June 30, 2020.
Canada Pension Plan/Employment Insurance (CPP/EI) appeals to the Minister
In cases where taxpayers wish to file an appeal in relation to CPP/EI rulings decision, they are encouraged to do so through MyAccount to avoid potential delays.
The CPP/EI appeals program is currently only actioning appeals that are related to cases where EI benefits are pending. These cases will be treated on a priority basis. All other appeals will be actioned when normal services resume.
In addition, the CPP/EI Appeals to the Minister program will exercise discretion on a case by case basis when additional time is required to respond to a request.
Deadlines for charities
CRA is extending the filing deadline to December 31, 2020, for all charities with a Form T3010, Registered Charity Information Return due between March 18, 2020 and December 31, 2020. This will allow charities more time to complete and submit their T3010.
Suspending audit activities
CRA will not initiate contact with taxpayers for audits, with certain exceptions, This includes:
- no new audits being launched, and
- no requests for information related to existing audits.
No audits should be finalized and no reassessments should be issued.
Suspending collections on new debt
Collections activities on new debts will be suspended until further notice, and flexible payment arrangements will be available.
Payment arrangements are also available on a case-by-case basis if you can’t pay your taxes, child and family benefit overpayments, Canada Student Loans, or other government program overpayments in full.
If you have concerns and require contact with a Collections Officer, please contact our toll free number 1-800-675-6184 between 8:00 a.m. and 4:00 p.m. your local time.
Requirement to pay (RTP)
Banks and employers do not need to comply or remit on existing RTPs during this time.
Taxpayer relief requests
Taxpayers who are unable to file a return or make a payment by the tax-filing and payment deadlines because of COVID-19 can request the cancellation of penalty and interest charged to their account. Penalties and interest will not be charged if the new deadlines that the government has announced to tax-filing and payments are met. For more information about deadlines, see Helping Canadians with the economic impact of the COVID-19 Pandemic.
For more information about taxpayer relief and how to make a request to the CRA to have interest and/or penalties cancelled, please go to Canada.ca/taxpayer-relief.
For more information, visit Helping Canadians with the economic impact of the COVID-19 Pandemic.