COVID-19: Financial and Tax Relief Measures for Small Business and Individuals (UPDATED)

Update as of april 27, 2020:

Below is a summary of COVID 19 related assistance to individuals and businesses along with relevant links. Please note that due to ongoing changes to individual programs and additions of new programs, it is important to visit the Canada.ca or other relevant website for complete details:

COVID 19 Assistance	Recipients	Summary (Please click on link in first column for details regarding each program)
CRA Extension of Tax Filing Dates	Individuals and Business	Almost all income and sales tax filing dates and payment due dates have been extended for both taxpayers and corporations. Note that deductions at source relating to payroll have not been deferred and are still payable on the regular due dates.
GST Rebate	Individuals	A one time payment will be made on April 9th to all individuals who qualified based on their 2018 return for the full annual amount of the 2018 benefit.  To verify if you are eligible and the amount please go to CRA My Account
Canada Child Benefit (CCB)	Individuals	An one time benefit of $300 per child will be paid out in May. Those who already receive the child benefit are automatically enrolled
Canada Emergency Response Benefit (CERB)	Individuals	Canada Emergency Response benefits will be available on April 6th to all employees who haven't yet applied for EI as well as to small business owners and those not eligible for EI.  To qualify you must have earned at least $5k in employment/self employment income over the past 12 months. Also, business owners of corporations who received ineligible dividends (box 10 of the T5) of at least $5k over the past twelve months from their corporations are also eligible. Eligible recipients will receive $2k per month
EI Regular Benefits	Individuals	Employees eligible for EI laid off as a result of COVID 19 are eligible to claim regular EI benefits
EI Sickness Benefits	Individuals	Employees eligible for EI who have to take sick leave as a result of quarantine, caring for a sick person , being sick themselves due to COVID 19 are eligible for EI sickness benefits
Federal 10% Wage Subsidy	Small Business	Small Business Employers that pay a salary to their employees are eligible for a 10% wage subsidy up to $1,375 per employee up to a max of $25k total. This can be offset against payroll deductions made to CRA. This is separate from CEWS (see below) however any amounts received will be offset against CEWS
Federal 75% Wage Subsidy (CEWS)	Businesses	Businesses who have experienced a drop of 15% in March or 30% in April of year over year revenues due to COVID 19 might be eligible for a 75% wage subsidy for employees that remain on the payroll. This is separate from the 10% wage subsidy mentioned above although businesses are only eligible for one or the other. Note that only businesses that paid their employees salaries are eligible for this benefit. Self employed individuals who do not pay employees will not qualify.
Canada Emergency Commercial Rent Assistance(CECRA)	Businesses	Small Businesses who have experienced a drop of 70% may be eligible for commercial rent relief of up to 75% for the months of April, May and June while commercial property owners can receive a forgivable loan for up to 50% of rent charged.See details below
Federal Loans to Small Businesses (CEBA)	Businesses	Interest free loans up to $40k per employer with payroll costs between $20k (this was initially $50k) and $1 million in 2019. Applications can made through your business bank eg. TD, RBC, CIBC etc. Possible loan forgiveness of 25% up to $10k if the loan is repaid by December 2022. T4 Summary is required to demonstrate payroll for 2019 and is available at CRA My Business Account in the "return details" of the payroll section. Similar to CEWS, self employed workers who do not pay employees will not qualify.
City of Montreal Property Tax	Owners	The 2nd instalment of property taxes has been extended to July 2nd, 2020
RQ Extension of Tax Filing Dates	Individuals and Business	Almost all income and sales tax filing dates and payment due dates have been extended for both taxpayers and corporations which generally lines up with the CRA extensions
Hydro Quebec	All Customers	Administrative charges for unpaid bills are suspended . Payment arrangements can also be made for customers unable to pay their Hydro Bills
CNESST	Businesses	Quebec Employers have until June 1st to file their 2019 year end returns and until August 31st to make payments without interest and penalties
Temporary aid for workers program	Individuals	Quebec Financial assistance for workers who do not qualify for another program
		Prepared by: Montreal Financial

Updated as of April 27, 2020:

RELIEF MEASURES FOR SMALL BUSINESS

Wage subsidy for Small Businesses - 75% (CEWS):

The CEWS is wage subsidy for individuals, taxable corporations, and partnerships as well as non‑profit organizations and registered charities, which will essentially reimburse 75% of employee salaries up to a maximum of $847. This means that if you decide to keep your employees instead of laying them off, the government will subsidize 75% of salaries for each employee up to a maximum of $847 per week. Note that employees do not have to be working. to collect the subsidy Businesses will have to demonstrate a loss of 15% of revenues for March 2020 and a decline of 30% for April revenues. Companies may either use the cash or accrual basis but must be consistent from month to month once a method is chose.

Canada Emergency Response Benefit (CERB) for Self Employed and Small Business Owners and Employees who have not yet applied for EI

The government is offering an “Emergency Response Benefit” (CERB) of up to $2,000 per worker, per month. The CERB program applies to self employed individuals and small business owners as well as employees who have not yet applied for EI and who are not receiving any income. They must have earned employment, self employment or EI/Parental benefits of at least $5k in 2019 or over the last year. Additionally, business owners of corporations who received ineligible dividends (box 10 of the T5) of at least $5k over the past twelve months from their corporations are also eligible. The qualifications were amended so that workers who have earned up to $1k over 14 consecutive days within a 4 week period immediately preceding the application are eligible (previously applicants were required to have NO income for the period) . For subsequent applications workers must not expect any income. The portal to apply for these benefits is available on April 6th and will be paid within 10 days after the applications on a monthly basis (although some applicants received their benefits even sooner after application)

All taxpayers should sign up for My Account with CRA to facilitate the processing of CERB. Note that authorized representatives cannot apply on the taxpayer’s behalf. The taxpayer must have their own access to CRA my account and apply themselves as there are attestations required that cannot be made by the representative.

Canada Emergency Business Account FOR small businesses and not-for-profits (CEBA)

This program will provide interest-free loans of up to $40,000 to small businesses and not-for-profits where revenues have been temporarily reduced, due to the economic impacts of the COVID-19. To qualify, the organizations will have to demonstrate that they paid between $20,000 (this was reduced from $50k) 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 of the loan, up to $10,000. To apply, the small businesses and not-for-profits should contact their financial institution many of whom now have online applications including TD, RBC, BMO and CIBC.. To apply, businesses will require a copy of the T4 summary , which is available on the CRA My Business Account website under the “view return details: of the Payroll Section

Temporary Wage Subsidy for Small Businesses:

Small businesses, including non-profits and charities, that have lost sales/revenues and are considering laying off workers will be eligible for a wage subsidy up to 75% (formerly 10%) of their employee wages for a maximum amount of potentially $5k - to be confirmed(formerly $1,375) per employee.  The maximum wage subsidy available to small businesses is to be determined (formerly $25k). 

The eligibility requirements have not yet been clarified.  Businesses will be able to benefit directly by reducing their deductions at source (DAS) remittances to CRA by the amount of the subsidy.

Canada Emergency Commercial Rent Assistance (CECRA)

Small businesses that are having trouble paying their rent may be eligible for a 75% rent reduction:

• Commercial property owners would be eligible for a forgivable loan that covers up to 50% of the commercial rent payable by the small business for three months including April, May and June

• The loan would be forgivable if the property owner agrees to reduce the small business tenant’s rent by 75% for April, May and June and ensure that the tenants are not evicted during this time.

• The small business would then pay the remaining 25% of the rent.

• Qualifying small businesses would pay less than $50k per month in rent and have experienced a drop of 70% or more in revenues

Access to Financing:

• The Canadian Government is establishing a Business Credit Availability Program (BCAP) that works in conjunction with the Business Development Bank of Canada (BDC)  to provide financing to small and medium businesses in conjunction with private financial institutions.  To determine eligibility visit BDC’s website

• Each of the biggest Canadian banks including RBC, TD, CIBC, BMO, Scotiabank and National Bank have agreed to work with small business to provide liquidity and address other short term needs on a case by case basis.  Other banks including Desjardins in Quebec and other financial institutions are also offering similar relief. If you are a small business in this situation, you should contact your bank as soon as possible to see if you are able to create or extend credit facilities or access to loans. 

• In addition to helping small businesses, banks are also offering to allow customers to defer mortgage, loan and credit card payments.  It is not clear whether this will be accompanied by interest relief.

• It might also be a good time to renegotiate your mortgage given a very low prime rate of 2.95%.  

Most details on eligibility, how to apply etc. on the measures announced by the federal government today have now been revealed. CERB can be applied for by using CRA My Account , CEWS applications are available starting April 27th through the CRA my business account portal and CEBA applications can be made directly through your business bank account.

In response to the financial pressure  being felt by small businesses, employees and individuals as a result of COVID-19, a number of measures have been announced by governments and banks to alleviate this difficulty.

RELIEF MEASURES FOR INDIVIDUALS

EI Sickness and EI Regular Benefits:

For those employees who are covered by Employment Insurance (EI) , Service Canada is waiving the need for a medical certificate as well as the one week waiting period before application.  For additional details please refer to my EI Sickness and EI Regular Benefits Post.

Emergency Care Benefit for those who do not qualify for EI

This benefit applies to employees and self employed/small business owners who regularly earn income and do not qualify for EI and are in the following circumstances:

• Those that are quarantined or sick with COVID-19.

• Those that are taking care of a family member who is sick with COVID-19.

• Parents who have to supervise their children due to daycare and school closures and are therefore not able to work.

The amount of the benefit will be up to $900 bi-weekly for up to 15 weeks

Employees and self employed business owners not covered under EI will be able to apply for the benefit in April 2020 using the CRA My Account portal, Service Canada or through a toll free number.

All taxpayers should sign up for CRA My Account and if you live in Quebec for Revenue Quebec My Account as this will likely be the easiest way to apply for benefits once they become available. It is also very useful to have access to when consulting tax and benefit files.

Canada Emergency Response Benefit (cerb)

Discussed above. Workers who have earned employment, self employment or EI/Parental benefits of at least $5k in 2019 or over the last year. Additionally, business owners of corporations who received ineligible dividends (box 10 of the T5) of at least $5k over the past twelve months from their corporations are also eligible. The qualifications were amended so that workers who have earned up to $1k over 14 consecutive days within a 4 week period immediately preceding the application are eligible (previously applicants were required to have NO income for the period) .

Temporary Aid for Quebec Workers not covered by EI

• Quebec is offering financial assistance to workers/employees not covered by EI, private insurance and who are not being paid by their employers. 

• Those covered include anyone who has symptoms of COVID-19, has come into contact with someone who has COVID-19, or returned from abroad.  The order to isolate themselves must have been received from the Government or another credible authority.

• Qualified workers will be eligible for up to $573 per week for up to two weeks, which may be further extended to a maximum period of 28 days.

• Applications are available (at the end of the page) starting March 19th.  You will need your personal details, a copy of your T4 for 2019, last day worked and starting date of the isolation/quarantine period.

Income Tax measures for CRA and RQ :

Revenue Canada (CRA) Tax Measures:

• The CRA tax deadline to file income taxes for individuals has been extended from April 30th, 2020 to June 1st, 2020. 

• The CRA tax deadline to file income taxes for self employed small business owners remains the same at June 15th, 2020.

• The CRA tax deadline for trusts (with a December 31st year end) has been extended from March 31st, 2020 to May 1st, 2020.

• Any income tax payments or instalments owing from March 18th to August 31st, 2020 are deferred to after August 31st.  That means no penalties or interest will be applicable to balances owing on your tax return or on instalments that come due during this period for individuals and self employed business owners.

• All income tax audits will cease for at least 4 weeks and no new ones will be initiated in the short term.

• CRA is allowing digital signatures on the E-file authorization forms for both individuals and businesses thereby reducing the need for taxpayers to leave their homes and meet with accountants.

• Despite the extension of the deadline, if you expect a refund, you should file as soon as possible.  Also, if you received Canada Child Benefits or the GST Credit, you should file your tax return sooner rather than later to ensure that the benefits for the current year are properly calculated.

Revenue Quebec (RQ) Tax Measures:

• The RQ tax deadline to file income taxes for individuals has also been extended from April 30th to June 1st. 

• The RQ deadline to pay any income tax balances due has been extended from April 30th to July 31st.

• Tax instalment payments due by June 15th, 2020 is extended to July 31st, 2020.

• All tax instalment payments due as of March 17th onwards has been extended to July 31st, 2020.

• RQ is also allowing digital signatures on the E-file authorization forms for both individuals and businesses.

• Income tax audits and tax collection initiatives are also being suspended in the near term

• GST/HST and QST payment deadlines have been extended to June 30th

• No extension for deductions at Source remittances due on payroll has been announced. As such, these should continue to be remitted within applicable due dates.

Other Tax Measures for Individuals:

• There will be a one time special GST credit tax payment of between $400 and $600 for individuals and families respectively, for those who are eligible,

• The GST credit is based on an income threshold of between approximately $44k and $54k depending on whether you are single or a family,   The GST credit is expected to be paid in May 2020.

• There will be an increase of approximately $300 per child, for those who receive the Canada Child Benefit.  This is expected to be paid out in May 2020.

• Taxpayers with student loans will be allowed to defer their payments for 6 months without incurring any interest. 

• There will be 25% reduction in the minimum withdrawal amounts for RRIFs for 2020 thereby not compelling those taxpayers who are over 71 with RRIFs to have to liquidate their portfolios given current market conditions.

Ronika Khanna is a Montreal accountant who helps small businesses achieve their financial goals.  To receive regular updates of articles pertaining to small business, accounting, tax and other topics of interest to business owners you can sign up here.  You can also follow her on Facebook or Twitter.